Securities Code：5411.T

JFE Group

Financial Results for First Quarter of
Fiscal Year 2024 ending March 31, 2025

JFE Holdings, Inc.
August 5, 2024
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

1

A table of contents
 Financial Highlights
 JFE Holdings’ Financial Results for First Quarter of Fiscal
Year 2024 (April 1 to June 30, 2024) and Financial Forecast
for Fiscal Year 2024 (April 1, 2024, to March 31, 2025)
 Dividends
 Financial Forecast for Fiscal Year 2024 by Segment
 Topics
Appendix 1: Profit/Loss Analysis, etc.
Appendix 2: Business Environmental Indicators, etc.
Appendix 3: The 7th Medium-Term Business Plan
Appendix 4: JFE Steel Carbon Neutrality Strategy Briefing (Excerpted)
This presentation material is for the purpose of publicizing the status of our company's financial results for the first quarter of
FY2024. It is not a disclosure material under the Financial Instruments and Exchange Act and does not guarantee the accuracy orcompleteness of the information. It does not constitute a solicitation to invest in securities in Japan, the United States or any othercountries. The forecasts presented are based on information received at the time of the briefing and include uncertainties.
Therefore, please refrain from making investment decisions based solely on this document. Our company shall not be liable forany damages arising as a result of the use of this document.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

2

JFE-HD

Financial Highlights


Mainly due to the lower sales for automobiles and lower profits at overseas group companies (JSW, etc.) in the firsthalf of the year, business profit* for FY2024 is expected to be ¥308.0bn., down ¥27.0bn. from the previous forecast.

Profit per ton of steel business* of ¥10,000 is expected to be achieved, although business profit is expected to fall below
the targets of the 7th mid-term plan.

Profit attributable to owners of parent is expected to be ¥205.0bn. (increased by ¥7.6bn. year-on-year, decreased by ¥15.0bn.
from the previous forecast).



JFE Holdings agreed to pay an interim dividend of 50 yen. Annual dividend is 110 yen (as previously announced, increasedby 10 yen year-on-year).
*Excluding Inventory Valuation etc.

Resultsfor 1Q of
FY2024

Business Profit in Apr-Jun of FY2024¥56.9bn. (decreased by ¥27.9bn. year-on-year）[Excluding Inventory¥
Valuation etc.]

61.9bn. (decreased by ¥13.9bn. year-on-year）

Business Profit ¥260.0bn.

(decreased by ¥38.2bn. year-on-year,
decreased by ¥40.0bn. from previous forecast）

308.0bn.

(increased by ¥11.8bn. year-on-year,
decreased by ¥27.0bn. from previous forecast）[Excluding Inventory¥
Valuation etc.]

Forecastof
FY2024

Profit attributable to owners of parent ¥205.0bn.

(increased by ¥7.6bn. year-on-year, decreased by ¥15.0bn. from previous forecast)

Steel business profit per ton : 10,000yen/t
Crude Steel Production(Standalone) : approx. 23.00Mt(decreased by ¥1,000/t fromprevious forecast)
7th Mid-term plan
・Business profit: ¥320.0bn.
(decreased by 0.45Mt year・Steel business profit per ton:on-year, decreased by 0.40Mt
10,000yen/tfrom previous forecast)

Dividend 110yen (As previously announced, increased by 10 yen yere-on-year),Interim dividend 50yen
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

3

Consolidated Results for First Quarter of
Fiscal Year 2024
(April 1 to June 30, 2024)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

4

JFE-HD

Financial Results for 1Q of Fiscal Year 2024
 Business profit in 1Q of FY2024 was ¥56.9bn.
(decreased by ¥27.9bn. year-on-year)（billion yen）

FY2023
Actual1Q

FY2024
Actual
1Q(Apr-Jun)

Revenue
Business Profit[Excluding Inventory Valuation
etc.]

Change(Apr-Jun)

1,262.0

1211.1(50.9)

84.8

56.9(27.9)[75.8][61.9][(13.9)]Finance Income/Costs

(4.9)

(5.1)

(0.2)

Segment Profit

79.8

51.7

(28.1)

ー(12.2)*(12.2)

Profit before Tax

79.8

39.5

(40.3)Tax Expense and Profit (Loss) Attributableto Non-Controlling Interests(20.2)(12.0)

8.2

Profit Attributable to Owners of
Parent59.6

27.5(32.1)

Exceptional Items＊A loss regarding the share transfer of GECOSS Corporation.
Business profit is profit before tax excluding financial income and one-time items of a materially significant value.
Inventory Valuation etc. is inventory valuation, carry over and foreign exchange valuation in steel business.
Segment profit is profit including financial income in business profit.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

5

Financial Results for 1Q of Fiscal Year 2024
(by Segment)(billion yen)

FY2023
Actual
1Q(Apr-Jun)

FY2024
Actual1Q

Change

917.2

860.6

(56.6)Engineering Business

111.1

123.8

12.7

Trading Business

370.3

358.3

(12.0)

Adjustments(136.7)(131.6)

5.1

1,262.0

1,211.1(50.9)

Business Profit (A)

84.8

56.9

(27.9)

Finance Income/Costs (B)

(4.9)

(5.1)

(0.2)

Steel Business

68.1

31.5

(36.6)Engineering Business

(0.1)

4.0

4.1

Trading Business

14.7

11.5

(3.2)

Adjustments

(2.9)

4.7

7.6

Segment Profit

79.8

51.7

(28.1)(A+B)

Contents(Apr-Jun)

Steel Business

Revenue

JFE-HDBusiness 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.

Explanation on the next
page
Increase in sales revenue
and profit margin
difference by project
Profit decline in North
America and domestic
construction materials

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

6¥36.6bn. Decrease in JFE Steel’s Segment Profit JFE Steel(FY2023 1Q(Actual) vs. FY2024 1Q(Actual))Unit

FY2023
1Q

FY2024
1Q

Crude Steel(Standalone)

Mt

6.05

5.48

Shipment(Standalone)

Mt

5.23

4.70

Average Sales Price(Standalone)

000yen
/t

128.5

139.2

Exchange Rate

yen/$

135.8

155.0

（billion yen）
FY2024
1Q

ChangeJFE Steel

FY2023
1Q

Segment
Profit68.1

31.5(36.6)

ExcludingInventory
Valuation
etc.

59.1

36.5

(22.6)

1. Cost+18.0

2. Volume and
Mix

(8.0)

• Crude steel Production 6.05Mt→5.48Mt

3. Spreads＊(8.0)• Deterioration due to the slowdown inoverseas market conditions• Structural reforms effect＋11.0• Operational improvement＋7.0

4. Inventory
Valuation(14.0)• Inventory valuation ＋5.0 (-5.0→±0)• Carry over -18.0 (+5.0→-13.0)• Foreign exchange valuation-1.0 (+9.0→＋8.0)

5. Others(24.6)• Group companies -15.0*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

7

Financial Forecasts for Fiscal Year 2024
(April 1, 2024, to March 31, 2025)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

8

JFE-HD

Financial Forecast for Fiscal Year 2024

 Full-year business profit is expected to be ¥260.0bn.
(decrease by ¥40.0bn. from the previous forecast, decreased by ¥38.2bn. year-on-year)
 Full-year profit attributable to owners of parent is expected to be ¥205.0bn.
(decrease by ¥15.0bn. from the previous forecast, increased by ¥7.6bn. year-on-year)(billion yen)
1H

Revenue
Business Profit[Excluding Inventory
Valuation etc.]

FY2024
Forecast（Previous)

FY2023
ActualFull year

Full year

FY2024
Forecast(Updated)
1H

Full year

ChangeChangeFY2023→FY2024

Previous→Updated

Full year

Full year

2,576.5

5,174.6

5,390.0

2,460.0

5,240.0

65.4(150.0)

164.3

298,2

300.0

85.0

260.0

(38.2)[11.8](40.0)[(27.0)][165.3][296.2][335.0][113.0]Finance Income/Costs(8.9)(18.6)(20.0)(10.0)(20.0)(1.4)

０

Segment Profit

155.3

279.6

280.0

75.0

240.0

(39.6)(40.0)-(11.2)

30.0(10.0)*

35.0*

46.2

5.0

155.3

268.3

310.0

65.0

275.0

6.7

(35.0)(45.2)(70.9)(90.0)(20.0)(70.0)

0.9

20.0

110.0

197.4

220.0

45.0

205.0

7.6

(15.0)

Exceptional Items

Profit before Tax
Tax Expense and Profit (Loss)
Attributable to Non-Controlling
Interests

Profit Attributable to
Owners of Parent[308.0]*A loss from the share transfer of GECOSS Corporation and a profit from sales of lands, etc.
Business profit is profit before tax excluding financial income and one-time items of a materially significant value.
Inventory valuation etc. is inventory valuation, carry over and foreign exchange valuation in steel business.
9
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.
Segment profit is profit including financial income in business profit.

JFE-HD

Financial Forecast for Fiscal Year 2024
(by Segment)
FY2024FY2024
Forecast（Previous) Forecast(Updated)

FY2023
Actual(billion yen)

ChangeChangeFY2023→FY2024

Previous→Updated

Full year

Full year

Full year

1,780.0 3,660.0(56.0)(10.0)

580.0

40.1

０

700.0 1,550.0

73.6(100.0)(550.0)

7.8(40.0)

2,460.0 5,240.0

65.4(150.0)

1H

Full year

Full year

1,865.8

3,716.0

3,670.0

Engineering Business

248.4

539.9

580.0

Trading Business

742.0

1,476.4

1,650.0

Adjustments(279.7)(557.8)(510.0)2,576.5

5,174.6

5,390.0

Business Profit (A）

164.3

298.2

300.0

85.0

260.0

(38.2)(40.0)

Finance Income/Costs (B)(8.9)(18.6)(20.0)(10.0)(20.0)(1.4)

0

Steel Business

122.8

202.7

205.0

40.0

165.0

(37.7)(40.0)

8.7

24.3

20.0

8.0

20.0

(4.3)

0

Trading Business

26.8

48.9

50.0

22.0

50.0

1.1

0

Adjustments

(3.1)

3.5

5.0

5.0

5.0

1.5

0

155.3

279.6

280.0

75.0

240.0

(39.6)(40.0)

Steel Business

Revenue

Engineering Business

Segment Profit
(A+B)

1H

260.0
(280.0)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.

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

10JFE-HD

Dividend JFE Holdings agreed to pay an interim dividend of 50 yen per shareat its Board of Directors.
 The annual dividend for FY2024 is expected to be 110 yen per share, based on
our payout ratio policy of approximately 30%.
(as previously announced, increased by 10 yen year-on-year.)(yen/share) Pay-out Ratio

160
140
120

31.9%

33.5%

N/A

N/A

34.1%

Annual110yen
80

50

30

50

40

0

30.9%

Year-end dividend

80

20

28.5%

Interim dividend

100

60

28.0%

30
FY20176045
20FY2018FY2019

50

(60)

50

50

50

FY2022

FY2023

FY2024
Forecast

10
FY2020

FY2021

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

11

JFE Steel

Financial Forecast for Fiscal Year 2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

12

JFE SteelBusiness environment（Domestic）
 Demand in the automotive sector is steady, but production has declined due to newly
emerged certification issues. In the civil engineering and construction field, demand
continues to be postponed due to labor shortages and a surge in materials.
 Steel demand is expected to improve in 2H, mainly driven by the automotive sector.
【Trend by Sector】

50

199

188

203

217

Avg.

Avg.

Avg.

Avg.

Avg.

FY19

FY20

FY21

FY22

FY23

1H

2H

Consumption （million tons）/Q

Domestic Ordinary Steel

Construction
Manufacturing

6
4
2
0

1H

2H

FY19

1H

2H

FY20

1H

2H

FY21

1H

• Construction equipment: We are closely monitoring thesoftening trend in Europe and Asia, as well as the indication ofa peak in the North American market.
• Industrial machinery: It has been sluggish due to uncertainties
surrounding rising interest rates and ongoing inflation. While
there are some observations of a potential bottoming out,
there are currently no significant signs of recovery.
• In the non-housing sector, demand for large-scale projects,
which had been relatively strong, has been postponed due
to rising material prices and labor shortages.
• Demand remains sluggish, due to the impact on
construction investment and housing acquisition
sentiment against the rise in construction costs and interest
rates.
• Although budget measures continue to be implemented at ahigh level, it is expected to be affected by rising costs ofmaterials and labor shortages.
13

FY24

【Outlook for Domestic Ordinary Steel Consumption/Q】
8• Despite the effects of high materials prices and labor shortages,
each shipbuilder has secured a three-year backlog of orders.
• The current level is expected to remain stable over the
next two to three years.

Civil engineering

237

Construction

150• Despite the impact of newly emerged certification issues andother factors, production motivation is high due to a steadydemand.
• Continue to monitor development in production plans

Other
manufacturing

Expected to recover in 2H

10,000 Units.

Shipbuilding

250

Auto-mobile【Outlook for Domestic Auto Production/Q】

2H

FY22

1H

2H

FY23

1H
FY24

Source：Ministry of Economy, Trade and Industry, “Outlook for SteelConsumption” July 2024. (FY2023, 2H and after is estimated results)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

JFE SteelBusiness environment（Overseas）

 Continued high production and increased exports in China, despite the sluggish domestic demand,
are leading to a slackening in steel supply and a stagnant market situation. We expect thatthe tough business environment will last for a while.
【Real GDP Growth Forecast in 2024】【China’s crude steel production and steel
Annual crude steel
exports】
110

production(per month）
15
2021:1,033 Mt(86)2022:1,013 Mt(84)2023:1,020 Mt(85)Crude steel production
100 per month (Left axis)

（Mt）
90

93 Avg(2022)

86Mt/month

84Mt/month

80

88 91

Avg(2023)
85Mt/month

77

76

85

86

84

82

81

70

60

12
(Mt)

97 Avg(2021)
90

89

6

74

Steel
Exports

4-6

7-9 10-12 1-3

2021

4-6

7-9 10-12 1-3

4-6

2022

7-9 10-12 1-3

2023【China: Steel Market Price】

1,000

HRC Price

900

9

4-6

3

500
400

※HRC Price：Average price in 5 cities in China
20.10

21.4

21.10

22.4

22.10

23.4

China

23.10

24.4

India

ASEAN-5

3.3%

2.5%

5.2%

8.2%

4.1%

Apr. 2024

3.2%

2.7%

4.6%

6.8%

4.5%

Jul. 2024

3.2%

2.6%

5.0%

7.0%

4.5%

Forecast

Forecast【Trend by Sector】*ASEAN-5：
Thailand, Malaysia, Indonesia,
Philippine, and Singapore

Thin Sheet・Market conditions particularly in Asia are sluggish due toChina’s weak domestic demand, high production levels, andincreased exports. It is anticipated that it will take time fordemand and market conditions to recover, as we await
effective economic stimulus and production control measures fromthe Chinese government.

Automobile

・Although production in China is increasing, Japanese OEMs arelosing market share.
・In ASEAN, the impact of higher interest rates and stricter loan
screening has been prolonged, but recovery is expected in 2H.
・In India, demand is strong due to high economic growth.

Shipbuilding

・China and South Korea shipbuilders are securing stable contracts,
despite the impact of labor shortages.

Energy・Despite potential risks, such as developments in OPEC+, overall
investment is expected to remain firm as the demand for stableenergy supply remains strong amidst moderate global economic
growth and heightened geopolitical tensions.

（$/ｔ）

Secularstagnation

600

US

2023

2024

800
700

World

Source：IMF World Economic Outlook Update April 2024 and July 2024

(Right axis)
1-3（Arrows indicate changes from the previous forecast）

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

14

JFE SteelRaw materials market trends

 Key Raw materials• Iron Ore: Prices are expected to remain at current levels as demand for Chinese steel
continues to slump.
• Coking Coal: Prices are expected to remain at current levels for a while, while there aresome risks to rise such as sluggish production by suppliers and increase in demand forinfrastructures in India after the general election. The impact of the fire at the Australian coalmine on the market will be closely monitored.
 Metals• Demand has been sluggish due to the slow recovery of the Chinese economy and steel
demand, but market prices for some stocks have risen due to tightening of supply anddemand due to supply capacity cuts.
$225($/DMT)$200$700

Iron Ore（Iron Ore Fines from Australia）$175
Term-Contract FOB$150

Term-Contract FOB

$300

$100

$200

$75
22/4

$500

($/WMT)

$400

$125

$50

Coking Coal
(Hard Coking Coal from Australia)

$600

22/7

22/10

23/1

23/4

23/7

23/10

24/1

24/4

TermContract
FOB

Apr-Jun

Jul-Sep

Oct-Dec

Jan-MarApr-Jun

$/DMT

112

107

103

113

121

FY2023

24/7

$100

22/4

22/7

22/10

23/1

23/4

23/7

23/10

24/1

24/4

24/7

Jul-Sep

TermContract
FOB

Apr-Jun

Jul-Sep

Oct-Dec

Jan-MarApr-Jun

Jul-Sep

101

$/WMT

283

240

327

325

251

ー

FY2024FY2023

FY2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

15

JFE Steel

Crude Steel production

Demand is expected to improve in 2H, but standalone crude steel production is expected
to be around 23 million tons per year due to a decline in demand for automobiles both inJapan and overseas in 1H (-400Kt from the previous forecast).

Continue to aim for a shift from quantity to quality by increasing high value-added products (Inline with the target of the 7th Mid-term Plan, the ratio is expected to reach 50% in FY24.).
Capacity expansion in Kurashiki district for electrical steel sheet will be completed in
1H as scheduled.

27

Standalone crude steel
production＜Full Year＞

Standalone crude steel
production＜Half Year＞

Unit：Mt

Seven
blast
furnaces

25

23

Unit：Mt(*)FY24.2H to be almost
as expected

26.73

12

25.88
24.10

21

23.45
22.76

Approx.
23.00

Approx.
23.40

12.64
10

8

17

FY2019FY2020

FY2021

FY2022

FY2023

FY2024
Forecast(Updated)

FY2024
Forecast(Previous)

Approx.
11.30

11.45

19

22.1H

Approx.
11.70*

12.16

22.2H

Approx.
11.70

11.29

23.1H

23.2H

24.1H

24.2H

FY24
Avg. Forecast(Previous)
16

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

JFE Steel

Improving of sales price Sales prices are expected to improve due to passing on various costs to the sales price,reviewing extras, and correcting price levels.
 The spread in FY2024 including various costs* is expected to remain at the level of FY2023,
despite the influences of the slump in overseas markets, as measures are taken to copewith rising costs such as logistics and labor costs.
*Spreads including metals, energy, materials, logistics, labor costs, foreign exchange impact, etc.
1000

HRC（China’s Spot Basis）

800

Average Sales Price・Spread（$/ｔ）（’000yen/ｔ）

100.0

HRC

160

■JFE Sales
Price

131

Approx.
135

140■Spread※

80.0

600

132

120

103
100

60.0

400

2024.72024.42024.12023.102023.72023.42023.12022.102022.72022.42022.16763
462021.102021.72021.42021.10

Metal
Spread80

Approx.

40.0

2020.10

200

76

47

71

60

※JFE Sales Price-Long Term
Contract Main Raw Material Priceper product ton

40

20

20.0

FY20.2H

FY21

FY22

FY23

FY24.1H

FY24.2H

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

17

JFE Steel

Financial Forecast for Fiscal Year 2023
FY2023

FY2024

Unit
1Q

2Q

1H

2H

Full Year

1Q

2Q

1H

2H

Full Year

FY24
Previous
Forecast

Revenuebillion
yen

917.2

948.6

1,865.8

1,850.2

3,716.0

860.6

919.4

1,780.0

1,880.0

3,660.0

3,670.0

Segment
Profitbillion
yen

68.1

54.7

122.8

79.8

202.7

31.5

8.5

40.0

125.0

165.0

205.0

ExcludingInventory
Valuation*

billion
yen

59.1

64.7

123.8

76.8

200.7

36.5

31.5

68.0

145.0

213.0

240.0

Crude Steel(Standalone)

Mt

6.05

6.11

12.16

11.29

23.45

5.48

Approx.
5.80

Approx.
11.30

Approx.
11.70

Approx.
23.00

Approx.
23.40

Crude Steel(Consolidated)

Mt

6.38

6.47

12.85

11.95

24.80

5.80

Approx.
6.10

Approx.
11.90

Shipment(Standalone)

Mt

5.23

5.42

10.65

10.12

20.77

4.70

Approx.
5.20

Approx.
9.90

Export Ratio
on Value Basis（Standalone）

%

44.2

44.2

44.2

41.5

42.9

40.6

Approx.
45

Approx.
43

Average Sales
Price(Standalone)

000
yen/ｔ

128.5

130.1

129.3

133.8

131.5

139.2

Approx.
132

Approx.
135

Exchange Rate

¥/$

135.8

144.1

139.9

147.7

143.8

155.0

Approx.
157

Approx.
156

Approx.
155

Approx.
156

Approx.
150

Exchange Rate
(End of Term)

¥/$

161.1

Approx.
155

Approx.
155

Approx.
155

Approx.
155

Approx.
150

145.0

149.6

149.6

151.4

151.4

＊ Excluding inventory valuation, carry over and foreign exchange valuation from segment profit

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

18

JFE Steel¥40.0bn. Decrease in JFE Steel’s Segment Profit(FY2024 (Previous Forecast) vs. FY2024(Updated Forecast)) Decrease in sales for automobiles and in profit at overseas groupcompanies (India) is expected mainly in 1H.
（billion yen）

ChangeFY2024Previous Forecast

FY2024
Updated Forecast

Segment Profit

205.0

165.0

(40.0)

Excluding Inventory
Valuation etc.

240.0

213.0

(27.0)JFE Steel

1. Cost±０

2. Volume andMix(15.0)

3. Spreads＊(5.0)

4. Inventory
Valuation
5. Others(13.0)(7.0)• Crude Steel Production
Approx. 23.40Mt→Approx. 23.00Mt• Inventory valuation -8.0 (-12.0→-20.0)• Carry over-10.0 (-23.0→-33.0)• Foreign exchange valuation＋5.0 (±0→＋5.0)• Group Companies-7.0*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

19

JFE Steel¥37.7bn. Decrease in JFE Steel’s Segment
Profit(FY2023 (Actual) vs. FY2024 (Forecast))（billion yen）

JFE Steel

FY2023
ActualChangeFY2024
Forecast

Segment Profit

202.7

165.0

(37.7)

Excluding Inventory
Valuation etc.

200.7

213.0

12.3

1. Cost+42.0

2. Volume and
Mix

(5.0)

3. Spreads＊±0• Structural reforms effect＋25.0• Operational improvement＋17.0• Crude Steel Production 23.45Mt⇒Approx. 23.00Mt

4. Inventory
Valuation(50.0)• Inventory valuation -25.0 (+5.0→-20.0)• Carry over -35.0 (＋2.0→-33.0）• Foreign exchange valuation-10.0 (+15.0→+5.0)• One-time structural reform costs ＋20.0（-20.0→±0）

5. Others(24.7)• Group companies -11.0*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

20¥85.0bn. Increase in JFE Steel’s Segment Profit(FY2024.1H vs. FY2024.2H)

JFE Steel A recovery in 2H is expected in demand for automobiles, sales expansion of highvalue-added products, and an improvement in earnings for our India’s group companies,
where an overall improvement in economic activity is expected.
（billion yen）

JFE Steel

1H Forecast

Segment Profit
Excluding Inventory
Valuation etc.

1. Cost2. Volume and Mix
3. Spreads＊
4. Inventory
Valuation
5. Others

ChangeFY2024 Forecast
2H Forecast

Full Year

40.0

125.0

165.0

85.0

68.0

145.0

213.0

77.0

＋10.0
＋24.0

• Crude steel production Approx. 11.30Mt⇒Approx. 11.70Mt• Recovery in Automobile production and sales expansion of high-valueadded products (Electrical steel sheet, Wind power generation, etc.)＋11.0• Improved spreads due continued sales price improvement efforts

＋8.0
＋32.0

• Inventory valuation -20.0 (±0→-20.0)• Carry over＋33.0 (-33.0→±0)• Foreign exchange valuation -5.0 (+5.0→±0)• Group Companies＋25.0*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

21

JFE SteelProfitability in steel business Mid-term target of business profit of ¥230bn. is not expected to be achieved mainly due totemporary factors in 1H. However, the target for profit per ton will be maintained at 10,000 yen
per ton.
 Profit in 2H is expected to be in line with the forecast announced in May as a result of cost
reductions and capacity expansion of electrical steel sheets.
Profitability in steel business（Segment profit
excluding inventory valuation）
FY23.2H→FY24.1H

FY23.1H→FY23.2H①Decrease in volume(automobiles, etc.),
slowdown in overseas
markets, rise in coking
coal prices, etc.

Unit：billion yen②（Previous）Sales priceimprovement and increase involume (automobiles)③（Updated） Decrease involume (automobiles) anddecrease in profit due tooverseas group companies(India)②①

FY24.1H→FY24.2H④ (Updated) Recovery ofdomestic automobile
production, improvementof economic activity level
in India after generalelection, and recovery of
demand for steel products③

8 th Mid-termbusiness plan

■The annualized profit
for 2H(2H×2) exceeds¥230bn.

④
145.0

123.8

FY23.1H ActualLong-term vision
Double profitability

76.8

68.0

FY23.2H Actual

FY24.1H Forecast■ Aiming for further
profit growth under the
8th Medium-Term Plan
and Long-Term Vision.

FY24.2H Forecast

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

22

JFE Engineering

Financial Forecast for Fiscal Year 2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

23

JFE Engineering

Financial Forecast for Fiscal Year 2024
 Current Business Environment/Overview of Financial Status

 Expect to increase orders in the field of “Waste to Resource” and “Core
infrastructure”
 Full year segment profit is expected to be ¥20.0bn. (as previously announced).
 Financial Forecast
FY2023 Actual(billion yen)

1H

Full Year

ChangeFY2024 Forecast
1H

Full Year

1H

Full Year

Orders*

269.7

563.0

240.0

600.0

(29.7)

37.0

Revenue

248.4

539.9

260.0

580.0

11.6

40.1

8.7

24.3

8.0

20.0

(0.7)

(4.3)

Segment Profit*From FY2024, the Company changed its method of accruing orders for long-term O&M (operation and maintenance)
contracts for waste treatment facilities, etc. contracted by local governments. Based on the previous order accruing
method, we forecast annual orders for FY2024 to be ¥590 billion.

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

24

JFE Shoji

Financial Forecast for Fiscal Year 2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

25

JFE Shoji

Financial Forecast for Fiscal Year 2024
 Current Business Environment/Overview of Financial Status In the first half, demand in North America and China is expected to remain
sluggish, resulting in a year-on-year decrease of ¥4.8bn. to ¥22.0bn.
 Annual segment profit is expected to be ¥50.0bn. (as previously announced)
with the anticipation of the gradual recovery of domestic demand forautomobiles and the incorporation of profits by Studco*, etc. in the second
half. (increased by ¥1.1bn. year-on-year, increased by ¥10.0bn. over the 7th medium-term business plan)＊Manufacturer of steel framing based in the United States and Australia acquired in May 2024)

 Financial Forecast
FY2023 Actual(billion yen)
Revenue
Segment Profit

1H

Full Year

ChangeFY2024 Forecast
1H

Full Year

1H

Full Year

742.0

1,476.4700.0

1,550.0(42.0)

73.6

26.8

48.9

22.0

50.0

(4.8)

1.1

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

26

Topics

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

27

JFE-HD, JFE SteelJFE Group and Japan Suiso Energy* Sign Land-lease Agreementfor Demonstration of World’s First Liquefied Hydrogen Supply Chain

Released on Jul 25th, 2024

Ohgishima was selected as the liquefied hydrogen receiving site for a Green Innovation
Fund Project “Liquefied Hydrogen Supply Chain Commercialization Demonstration”.
Leading the way toward a hydrogen-powered society in Japan from Ohgishima.
*Kawasaki Heavy Industries, Ltd.:36.6％・Iwatani Corporation:33.4％・INPEX:30%■Agreement signing ceremony

Right: Eiichi Harada, president of Japan Suiso Energy
Left: Masayuki Hirose, president and CEO of JFE Steel■Our own power plant（Ohgishima thermal power plant, new#1）

Liquefied hydrogen
carriers are planned
to dock at the berth(FY2029年~)■Liquefiedhydrogen carrier••

Large-scale land use conversion in Ohgishima started in preparation for thestart of land use in FY2028. In cooperation with Kawasaki City, we are working to
improve road and traffic access and the reception environment for liquefied hydrogen
carriers in preparation for the start of the demonstration.
After the commercialization demonstration, we will consider the introduction ofhydrogen to our own power plant, the utilization of cold heat generated by hydrogen28
supply, and joining the business of the hydrogen supply chain.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

JFE Steel

Promote overseas expansion of JFE ResolusTM solutions business First order for continuous-caster breakout detection system for FHS in Vietnam.

Released on May 22nd, 2024

 JSW & JFE begin pilot demonstration of advanced Cyber-Physical System (CPS)
technologies in blast furnace operations.

Released on Jul 1st, 2024

 Contribution of the solutions business to profits
Further contribution of the solutions business to profits
is aimed from the next mid-term onward by selling new
items using DS technology to overseas steel companies
and other industries, in addition to the conventional
operation support.

Selling new items tooverseas steel companies
and other industries.

3 times the FY2020

FY202020年度(Base)(基準年)

FY202424年度
Target目標

 CPS in blast furnace operation
・A virtual space blast furnace model using data science isused to visualize the internal state in real time and realize
high efficiency and stabilization of operation.
・ First project wherein JFE provides its proprietary CPS
capability to overseas steel company through a cloudbased environment.

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

29

Appendix(1)Profit/Loss Analysis

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

30

JFE-HD

Profitability Targets and Main Performance
The 7th
mid-termbusinessplan
FY2024

Consolidated

Business Profit[Excluding Inventory Valuation etc.]

Profit attributable to ownersof the parent

Operating companies

FY2021
ActualFY2022
ActualFY2023
ActualFY2024
Forecast¥320.0bn.

¥416.4bn.

¥235.8bn.

¥298.2bn.

¥260.0bn.

¥220.0bn.

¥288.0bn.

¥162.6bn.

¥197.4bn.

¥205.0bn.

10%

15.7%

7.9%

8.6%

8.1%

¥230.0bn.

¥323.7bn.
[¥129.7bn.]¥146.8bn.
[¥73.8bn.]¥202.7bn.
[¥200.7bn.]¥165.0bn.
[¥213.0bn.]

ROE
Segment
profitSteelBusiness[Excluding Inventory[¥222.4bn.][¥162.8bn][¥296.2bn.][¥308.0bn.]

Valuation etc.]

Profit per
ton*[Excluding Inventory
Valuation etc.]

10,000yen/t

14,000yen/t
7,000yen/t
10,000yen/t
8,000yen/t[6,000yen/t] [3,000yen/t] [10,000yen/t] [10,000yen/t]

Engineering
Business

Segment
profit¥35.0bn.

¥26.0bn.

¥13.4bn.

¥24.3bn.

¥20.0bn.

Trading
Business

Segment
profit¥40.0bn.

¥55.9bn.

¥65.1bn.

¥48.9bn.

¥50.0bn.

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

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

31

JFE-HD

Main Financial Data
JAAP【IFRS】
FY15

FY16

FY17

FY18

(bn. Yen, times)

FY18

FY19

FY20

FY21

FY22

FY23

(bn. Yen, times)

Ordinary Income

64.2

84.7

216.3

221.1

Business profit

232.0

37.8

(12.9)

416.4

235.8

298.2

EBITDA

254.4

279.9

388.8

405.9

EBITDA ＊1

428.2

269.4

223.4

668.7

505.4

572.3

ROS

1.9%

2.6%

5.9%

5.6％

ROS ＊26.0%

1.0%(0.4%)

9.5%

4.5%

5.8%

ROE

1.8%

3.7%

7.6%

8.3％

ROE ＊3

8.6％(11.1%)(1.3%)

15.7%

7.9%

8.6%

ROA

1.7%

2.3%

5.2%

5.1％

ROA ＊45.0％

0.8%(0.3%)

8.4%

4.4%

5.3%

Debt Outstanding

1,379

1,375

1,331

1,450

Interest-bearing debt
outstanding

1,524

1,814

1,806

1,849

1,863

1,830

Debt/EBITDA Ratio

x5.4

x4.9

x3.4

x3.6

Debt/EBITDA
multiple
*5

x3.6

x6.7

x8.1

x2.8

x3.7

x3.2

56.9%

51.4%

58.1%

62.0％

D/E Ratio ＊6

68.2％

96.4%

93.2%

80.8%

67.8%

58.0%

58

118

251

285

284

(343)

(38)

500

281

323

30

30

80

95

95

20

10

140

80

100

51.4%

25.5%

31.9%

33.3％

33.5％

ー

ー

28.0%

28.5%

30.9%

D/E Ratio

Profit attributable toowners of parent(yen/share)

Dividend(yen/share)
Pay-out Ratio

Notes[IFRS]

Profit attributable toowners of parent(yen/share)

Dividend(yen/share)
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.

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

32

JFE Steel

Financial Results for Fiscal Year 2024
FY2022

FY2024FY2023

Unit

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

4Q

Full Year

1Q

Revenuebillion
yen

932.6

986.3

986.9

975.3

3,881.1

917.2

948.6

915.6

934.6

3,716.0860.6

Segment Profit

billion
yen

93.0

55.2

21.8

(23.2)

146.8

68.1

54.7

48.2

31.7

202.7

31.5

ExcludingInventory
Valuation etc.*

billionyen(23.0)

55.2

22.8

18.8

73.8

59.1

64.7

49.2

27.7

200.7

36.5

Crude Steel(Standalone)

Mt

6.43

6.21

5.48

5.97

24.10

6.05

6.11

5.62

5.67

23.45

5.48

Crude Steel(Consolidated)

Mt

6.77

6.59

5.81

6.29

25.48

6.38

6.47

5.95

6.01

24.80

5.80

Shipment(Standalone)

Mt

5.54

5.32

5.25

5.64

21.74

5.23

5.42

5.08

5.04

20.77

4.70

Export Ratio
on Value Basis（Standalone）

%

48.5

45.0

41.0

43.6

44.5

44.2

44.2

41.6

41.3

42.9

40.6

Average Sales Price(Standalone)

000
yen/ｔ

126.7

136.7

136.3

124.0

130.8

128.5

130.1

132.5

135.2

131.5

139.2

Exchange Rate

¥/$

126.5

136.6

144.0

133.2

135.1

135.8

144.1

148.7

146.7

143.8

155.0

Exchange Rate
(End of Term)

¥/$

136.7

144.8

132.7

133.5

133.5

145.0

149.6

141.8

151.4

151.4

161.1

＊Excluding inventory valuation, carry over and foreign exchange valuation from segment profit

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

33

¥0.2bn. Decrease in JFE Steel’s Segment Profit(FY2023.4H vs. FY2024.1H)

JFE Steel（billion yen）

JFE Steel

FY2023

FY2024

Change

1Q

2Q

3Q

4Q

Full Year

1Q

Segment
Profit

68.1

54.7

48.2

31.7

202.7

31.5

(0.2)

ExcludingInventory
Valuation
etc.

59.1

64.7

49.2

27.7

200.7

36.5

8.8

1. Cost＋1.0

2. Volume and
Mix

(5.0)

• Crude Steel Production 5.67Mt→5.48Mt

3. Spreads＊＋3.0• Improved spreads due continued sales priceimprovement efforts

4. Inventory
Valuation(9.0)• Inventory valuation -3.0 (+3.0→±0)• Carry over -18.0 (+5.0→-13.0)• Foreign exchange valuation ＋2.0 (+6.0→＋8.0)• One-time structural reform costs ＋10.0（-10.0→±0）

5. Others＋9.8• Expenses、Timing difference of regular maintenance,
etc.

*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

34

¥23.0bn. Decrease in JFE Steel’s Segment Profit(FY2024.1Q vs. FY2024.2Q)

JFE Steel（billion yen）

JFE Steel

ChangeFY2024 Forecast
1Q Actual

2Q Forecast

1H Forecast

Segment Profit

31.5

8.5

40.0

(23.0)

Excluding Inventory
Valuation etc.

36.5

31.5

68.0

(5.0)

1. Cost±0

2. Volume and
Mix

＋1.0

• Crude steel production 5.48Mt→Approx. 5.80Mt

3. Spreads＊＋5.0• Improved spreads due continued sales priceimprovement efforts

4. Inventory
Valuation(18.0)• Inventory valuation ±0 (±0→±0)• Carry over -7.0 (-13.0→-20.0)• Foreign exchange valuation -11.0 (+8.0→-3.0)

5. Others(11.0)• Timing difference of regular maintenance, etc.

*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

35

JFE Steel¥39.8bn. Decrease in JFE Steel’s Segment Profit(FY2023.2H vs. FY2024.1H)（billion yen）

JFE Steel

FY2023
2H Actual

FY2024
1H Forecast

ChangeSegment Profit

79.8

40.0

(39.8)

Excluding Inventory
Valuation etc.

76.8

68.0

(8.8)

1. Cost＋2.0

2. Volume andMix(10.0)• Difference in sales volume and product mix

3. Spreads＊＋17.0• Improved spreads due continued sales priceimprovement efforts

4. Inventory
Valuation(31.0)• Inventory valuation -4.0 (＋4.0→±0)• Carry over -52.0 (＋19.0→-33.0)• Foreign exchange valuation ＋5.0 (±0→＋5.0)• One-time structural reform costs ＋20.0（-20.0→±0）

5. Others(17.8)• Group Companies -19.0*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

36

JFE Steel¥82.8bn. Decrease in JFE Steel’s Segment Profit(FY2023.1H vs. FY2024.1H)（billion yen）

JFE Steel

FY2023
1H Actual

FY2024
1H Forecast

ChangeSegment Profit

122.8

40.0

(82.8)

Excluding Inventory
Valuation etc.

123.8

68.0

(55.8)

1. Cost＋30.0• Structural reforms effect＋22.0• Operational improvement＋8.0

2. Volume andMix(19.0)• Crude steel production 12.16Mt→Approx. 11.30Mt

3. Spreads＊(28.0)• Slowdown in overseas market conditions(27.0)• Inventory valuation -1.0 (＋1.0→±0)• Carry over -16.0 (-17.0→-33.0)• Foreign exchange valuation -10.0 (＋15.0→＋5.0)(38.8)• Group Companies -20.0

4. Inventory
Valuation
5. Others*Spreads including various prices (metals, energy, materials, logistics, labor costs, foreign exchange effects, etc.)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

37

JFE-HD

Debt/EBITDA Ratio Debt/EBITDA ratio as of the end of 1H of FY2024 is 4.2x.

16,000Debt/EBITDA Ratio(Right Axis)

14,00012,00010,0003.7

3.5

Calculated fromannualized EBITDA
forecast for 1H FY2024

8,000

EBITDA
6,000（billion
yen）
4,000

505.4

2,000
0

Debt
Net Debt

4.2

572.3

440.0

（1H×2）

1,862.9
1,743.5

1,830.2
1,587.1

1,830.0ー

FY2022

FY2023

FY2024
1H Forecast

EBITDA＝Business profit＋Depreciation and Amortization
Debt/EBITDA Ratio＝Interest-bearing debt outstanding/EBITDA(times)
9.0
7.0
5.0

Target of the 7 th
mid-termbusiness plan

Approx. 3x

3.0
1.0
(1.0)
(3.0)
(5.0)
(7.0)

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

38

Appendix(2)Business Environmental
Indicators, etc.

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

39

Domestic
Market Environment
5,000

Combined Inventories of HR,
CR and Coated Steel SheetJFE Steel（Month）（000ｔ）

Maker

Whole Saler

Coil Cente

5

Inventory Ratio(Right Axis)

4,000

4

3,000

3

2,000

2

May 2024
1,000

Inventories（000t）

Inventory Ratio
0

YoY

4,121

+4
(+0.1%)+81(+2.0%)

4,117

4,040

2.94

-0.11

+0.17

3.05

2.76

1

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
Mar
May

（Month）

April 2024 May 2023

MoM

2018

2019

2020

2021

2022

2023

2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

040

Inventories of Plate (Plate Shear)and Wide Flange Shapes

Domestic
Market Environment

Inventories of Plate (Plate Shear)（000ｔ）
500

Inventories of Wide Flange Shapes（Month） （000ｔ）
3.5

Inventories

450

3.0

400

2.5

350

4.0

200

3.5

150

3.0

100

2.5

2.0

300

1.5

2019

2020

2021

2022

2023

2024

2018

2019

+1.0

2020

2022

2.63
Sep

Jan

Sep

Jan

May

Sep

2021

3.44

2023

May

+0.2

2.0

220.8 196.4

Jan

+24.5

May

May

Jan

+0.1

(+0.0%) (+12.5%)

3.63
Sep

May

Jan

Sep

Jan

May

0.5

0

Inventory
ratio（Month）

YoY

Jan

Inventories 220.9

MoM

Sep

1.0

May June
2024 2023

May

June
2024

50

（000t）

May

Jan

Sep

Jan

May

Sep

Jan

May

2018

Sep

2.7

May

2.7
Jan

+0.0

Sep

-0.0

May

2.7

Jan

396

Sep

(-4.2%)

382

Inventory
ratio（Month）(-0.5%)

May

380

-16

Jan

Inventories

-2

Sep

YoY

Jan

MoM

April May
2024 2023

May

May
2024
（000t）

200（Month）

Inventories
Shipment
Inventory Ratio (Right Axis)

250

Inventory Ratio (Right Axis)

250

JFE Steel

2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

1.5

41

JFE Steel

Domestic
Market Environment
600

Trend of Import Steel (Ordinary Steel)（000ｔ）

S. Korea

China

TaiwanOthers

500

400

300

200

Unit: 000t

100

0

432

MoM

YoY

-27

＋32

(-5.8%)(+8.1%)

April 2024 May 2023

459

400

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
Mar
May

Import SteelMay 2024

2018

2019

2020

2021

2022

2023

2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

42

JFE Steel

Domestic
Market Environment

Price Trend of Import Steel（000yen/ｔ）

120
110
100
90
80
70
60

2016

2017

2018

2019

2020

2021

2022

2023

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

40

Jan

50

2024

Data: The Japan Iron and Steel Federation Import Steel from S. Korea
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

43

Overseas
Market Environment
Export (Left Axis)（Mt）

Crude Steel & Im/Export, China
Import (Left Axis)

JFE Steel

Crude steel (Right Axis)

（Mt）

12

120

10

100

8

80

6

60

2019

2020

2021

YoY

2022

2023

May

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

Nov

20

Sep

Jul

+16.0%

May

-1.3%

Mar

Nov

Sep

Jul

May

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

Nov

Sep

Jul

Mar

Jan

May

2018

40

Jan

27.6

Sep

-9.1%

Jul

9.6

May

Export（Mt）

Mar

-1.3%

MoM

Jan

91.6

June 2024

20

Crude Steel（Mt）

April-June
2024
270.4

Nov

4

0

2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

44

Overseas
Market Environment

Inventories in China by Product

（Mt）

30.0

Bar

Rod & Wire

Plate

HR

CR

JFE Steel100.0%

Change (YoY)

50.0%

25.0

0.0%
20.0

-50.0%-100.0%15.0-150.0%10.0-200.0%

2018

2019

2020

2022

2023

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

11.3
Apr

Jan

12.8
Oct

Jul

2021

-250.0%

May 2024 June 2023(+13.5%)Apr

Oct(-0.1%)

YoY
+1.5

Jan

MoM
-0.0

Apr

Jan

Oct

12.8
Jul

Apr

Jan

Oct

Jul

Apr

Inventory（Mt）
Jan

0.0

June 2024

Jul

5.0

-300.0%2024

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

45

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

400

300

300

200
100

200

Metal
Spread10000Metal 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

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

46

600
0

35

30

25

20

15

10

5

2024.7402024.1(US$/lb) Mo

2024.72023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.7

Trend of Sub Material’s Market Price2024.12023.72023.12022.72022.12021.72021.12020.7

1,000

2020.1

1,400

2019.7

1,800

2019.1

2,200

2018.72,600

2018.1(US$/t) FeMn
1,000
2017.11102017.7160

2016.7210

2017.1260

2016.1(US$/t)2016.72024.72024.12023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.7FeCr

2016.12024.72024.12023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.760
2016.1(￠/lb)

2016.1

Raw
Materials
JFE Steel

Zn

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

47

Raw
Materials

Trend of Sub Material’s Market Price

Scrap

($/B)

（yen/ｔ）

Spot Bulker

100,000
90,00060,00080,00050,00070,00040,00050,00060,00040,00030,00030,00020,00020,000（yen/ｔ）
180,000

140,000

2024.72024.12023.71200

WTI crude oil（Left Axis）
Bunker (Japan VLSFO (Right Axis)
Bunker (Japan 380CST) (Right Axis)

110

120,000

2023.1(Bunker Oil: $/t)

(Crude Oil: $/bbl)

1302022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.7

Crude Oil, Bunker Oil

LNG

160,000

1000
800

90

2024.72024.12023.72023.12022.72022.12021.72021.102020.7102020.1200
2019.730
2019.1400

2018.750

2018.12024.72024.12023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.72016.140,000600

2017.760,00070

2017.180,0002016.7100,000

20,0002016.12024.72024.12023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.70
2016.1

10,00010,0002016.170,000JFE Steel

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

48

JFE Steel

Orders of JGreeXTM Green Steel Fields of orders have expanded for electric power, consumer goods, andoverseas as well as for domestic shipbuilding and construction.
 In FY2024, we aim to expand sales of JGreeXTM to all varieties and all fields.
Domestic/
Overseas

Products

Domestic

PlatesHigaki Shipbuilding, Onomichi
Dockyard, Imabari Shipbuilding

Domestic

PlatesTsuneishi Shipbuilding

Domestic

Plates,Shapes,
Pipes

Hydrogen-fueled
Tugboats

Kumagai Gumi, Sumitomo
Corporation

Office Building

Domestic

Pipes

YASHIMANADA

Roll column

Domestic

ShapesTomakomai Kuribayashi
Transportation

Warehouse

Overseas

PlatesHock Seng Hoe

Wholesale ofplatesOverseas

European transformer manufacturer Transformer

Overseas

Officeequipment

Electrical
sheetsElectrical
sheetsDomesticCan

Domestic

Field
Ship building

Construction

Ship building,Construction,
Offshore structure

Electric power

CustomerUse
Dry bulk carriers

Eaton Corporation

Transformer

Bars

Suzutoyo Seiko

Resource-recycling
Containers

Tin

MoNo Factory

Pinback Buttons 49

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

JFE Steel

Efforts to Create a Green Steel Market
 Appropriate environmental value is required for "actual reduction" of GHG
emissions using low-carbon technologies in the transition period.
 With appealing the necessity of a mass balance system/CoC* based on theactual amount of reduction, promote demand of green steel products byvisualizing economic value, and promote activities for international
standardization in cooperation with the Japan Iron and Steel Federation (JISF) .
 We propose the popularization of green steel products and energy policy
issues for realization of decarbonized society.
（Jun 6 th, 2 0 2 4 , 5 6 th Adviso ry Com m ittee for N atural R esour ce s and Energy, 5 6 th Strategi c Policy Com m ittee）

 International standardization and rulemaking*CoC：Chain of Custody• Formulation of mass balance system/CoC guidelines (JISF-Three blast furnace companies, worldsteel）
 Establishment of JISF Guidelines (Oct. 2023), worldsteel basic principle agreement (Apr. 2024)• Activities to revise the GHG Protocol• Efforts to establish ISO standards for mass balance systems / CoC

 Efforts to create demand• Start of supply JGreeXTM (Jun. 2023)
 Adopted in 6 fields including Ship building, Construction, Transformer, etc.
• Efforts to establish rules for emission reduction measurement methods in private-sector procurementin the GX League, etc.
 GX League proposal (Dec. 2023), METI-GX Product Market Study Group Interim Report(Mar. 2024)
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

50

JFE Engineering

Orders by Business Field（billion yen）

FY2023

FY2024

ActualOutlook

Waste
toResource

243.7

257.0

13.3 Renewal works of domestic waste treatment facility [Kanagawa]

CarbonNeutral

54.3

60.0

5.7

Combined
Utility
Service

15.6

9.0

(6.6)

Business
Field

ChangeMain orders received in FY2024 First-Quarter

Construction works of bridge（KEINAWA EXPWY [Nara],

Core
Infrastructure

249.4

274.0

24.6 Harbor road [Kanagawa], MAIZURU-WAKASA EXPWY [Kyoto])

Total

563.0

600.0

37.0

Order
Backlog

613.8

970.0 356.2

Water pipeline renewal project [Hyogo]*The outlook for FY2024 is based on the revised method of accruing orders for long-term O&M contracts.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

51

JFE-HD

Links to the Reports Published during FY2023
ReportURL

QR codeJFE Group REPORT
2023

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

Sustainability REPORT
2023

https://www.jfeholdings.co.jp/en/sustainability/index.
html

Sustainability REPORT
2023
Environmental Data

https://www.jfeholdings.co.jp/en/sustainability/pdf/2
023/2023_08_01.pdf

DX REPORT 2023

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

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

52

Appendix(3)The 7th Medium-TermBusiness Plan

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

53

JFE-HD

Mid/long-term directions

Biggest transformation in company’s history aimed at achieving global success

JFE’s corporate vision
Contributing to society with the world’s most innovative technology
JFE’s mission

To be essential to society’s sustainable development
and to create safe, comfortable lives for people everywhere

Environmental & Social
sustainability（helping to solve critical issues）

Economic sustainability（stable earnings power）

Ensuring environmental & social sustainability and establishingeconomic sustainability will enable to ensure the resiliency of JFE’s operationalfoundations and allow the company to achieve sustainable growthand increased value over the mid/long-term.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

54

Initiatives to achieve environmental and social sustainability

JFE-HD(helping to solve critical issues)E

JFE Group Environmental Vision for 2050

• Aim to realize carbon neutral by 2050, taking climate change as anextremely important business concern for JFE• Accelerate R&D in new technologies and strive to create superinnovative technologies• Contribute to the reduction of CO₂ emissions in society and use this as abusiness opportunity to increase corporate value• Work systematically to combat climate change under TCFD philosophy

S

Solve issues impacting society

1. Safety/health management
2. Facilitate employee participation（Diversity & Inclusion, Personnel development, Workstyle reforms）

3. Contribute to regional societies through engineering
4. Respect human rights throughout supply chain（Conduct human-rights due diligence from FY2021）

G

Enhance corporate governanceConsider how to apply non-financial metrics
in terms of director compensation andinvestment decisions etc.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

55

JFE-HDJFE Group Environmental Vision for 2050
Toward Carbon Neutrality by 2050

JFE Group Environmental Vision for 2050
（GX Investment during 7th mid-term business plan：340 billion yen)

GX：Green transformation

1. Key environmental initiative under 7 th mid-term business plan
• Steel business：Reduction of CO₂ emissions by 18% by the end of
FY2024（vs. FY2013）

2. Carbon Neutrality by 2050①

Reduce CO₂ emissions at JFE Steel• Pursue super-innovative technology for carbon-recycling blast furnaces and
CCU• Develop hydrogen-based ironmaking（direct reduction）technology etc.

②

Expand contributions to CO₂ emissions reduction in society• Engineering business：Expand & develop renewable-energy
power generation and carbon-recycling technologies.

Targets to contributions to
CO₂ emissions reduction
FY2024 12 Mt
FY2030 25 Mt• Steel business：Develop & market eco-products and eco-solutions.
• Trading business：Increase trading in biomass fuels, steel scrap, etc.
and strengthen business in SCM for eco products.
SCM：Supply Chain Management③

Groupwide commercialization of offshore wind-power business
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

56

JFE-HDJFE Group’s activities for Carbon neutrality
Steel Business: CO₂ emission reduction by 18% at the end of FY2024 (vs. FY2013)
Through decarbonization in steel manufacturing processes etc., JFE Group aims to becarbon neutral.
Engineering Business: Contribute to carbon neutrality in society on the whole by expanding
JFE Engineering’s contributions to CO₂ emissions reduction resulting from its businesssuch as development of renewable-energy generation and carbon recycling technologies.
（Mt/year）

CO₂ emissions reduction

58.1

-10.5

Steel
business
CO₂
emissions

18%

30%

(End of FY2024)

47.6

or more

-17.4
40.7

Engineering business：
Expand contributions to
CO2 emissions reduction
in society

Engineering business
CO₂ emissions reduction(CO₂ reduction base year)

Carbon neutrality
by 205025.0
12.0

FY2013

Steel business：

FY2024(last year of 7th Medium-term
Business Plan)

FY2030
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

57

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

Technology
Carbonrecycling
blast
furnace

Blast
Furnace

18% reduction comparedto FY2013（Steel Business）

2021 ～

24(Direct reduction)

Development ofother technologies
Electric Arc
FurnaceTechnologies to beinstalled to theexisting facilities
R&D expenses

26

27

28

（2025-2026）
Element development<GI Fund><GI Fund>Carbon neutrality
by 205029

2041～2050

Released in Feb, 2022

Small-scale demo

CCU

Hydrogen-based
ironmaking

25

30% or more reduction comparedto FY2013 （Steel Business）

Small-scale demo

30

2031～2040

Large-scale
development

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
（2024～2025）

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.）

Implementation（～2040）●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

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

58

JFE SteelCarbon-recycle Blast Furnace• Technologies for reducing CO₂ emissions from blast furnaces are necessary to maximize blast furnaces’
advantages such as mass production, high-efficiency production, and high-grade steel production• Combining carbon-recycling blast furnace with CCU enables to reuse CO₂ inside a steelworks by using raw
materials of the same grade as those used in conventional blast furnaces. By doing so, JFE aims to achieve net
zero carbon emissions.

Sintered Ore(Fe2O3)

Coke (C)N2 H2O
CO2 CO H2

Coke (C)

Sintered Ore(Fe2O3)

Byproduct gas(Fully used for

Hot air

O2

Blast
Furnace

CO2

Blast
FurnaceFe
1500℃
Molteniron

Conventional

Blast Furnace

Pellets made ofhigh-purity iron ore

In-house use
CCU

Carbonrecyclingheating andelectric power
generation insidea steelworks)

Molteniron

Hydrogen-based ironmaking(direct reduction)

Carbon-recycling Blast Furnace

Conventional Blast Furnace

Methane converted
from CO₂ is reusedin blast furnace.

（Reused insidea steelworks, circulated
in shaft furnace）

Hydrogen (H₂)

Shaft
Furnace

Methanation
Facility
ReducedPellets

Methane (CH4)
Oxygen (O₂)

Byproduct gas（As carbon-neutral
reduction agent）

Carbon-recycling Blast Furnace

Electric Arc
FurnaceHydrogen(H₂)

Carbon-free Power（hydrogen/ nuclear）

Melting

Hydrogen-based ironmaking(direct reduction)

Capacity

4M t / BF-year

4M t / BF-year（on par with Conventional BF）

2M t/ Shaft Furnace-year

Reducing Agent

Coke＋Pulverized Coal

Coke＋Recycled methane（CH4）

Hydrogen （H2）Raw Materials

Low-grade raw materials
possible.

Low-grade raw materials possible.

Limited（High-grade iron ore）

CO₂ Emissions

2/t-CO₂/1-ton of pig iron

Target: Zero（CO₂ reduction in BF＋CCUS） CopyrightTarget:Zero（Carbon-free method）© 2024 JFE Holdings, Inc. All Rights Reserved.

（current direct reduction ironmaking basis）

59

JFE-HDGroupwide commercialization of offshore wind-power business(Study feasibility)• Become a pioneer in offshore wind-power generation business by commercializing
manufacture of monopile and other seabed-fixed structures.
• Establish groupwide supply-chain such as monopile-structure manufacturing and O&M• Aim to expand renewable energy business by leveraging group synergy effect, taking JFE
Engineering as a main driver.
O&M: Operation and Maintenance. Apply expertise of maintenance and analysis technologies.

JFE Steel

JFE Engineering

Increase capacity for heavy, extrathick steel plate for offshore windpower applications

Manufacture and market monopileand other seabed-fixed structures
for offshore wind-power generation
Provide steel products

Utilizing NO.7 new continuous-casting equipment inKurashiki district (Start operating in FY2021)

Provide steel products
Carry out SCM
Provide steel products

JFE Shoji
Contribute to groupwide cooperation
by carrying out SCM of steel
materials and processed products foroffshore wind-power generation

Carry out SCM

Subsidiaries/ Affiliates
JMU：manufacture power-generation
floating structures and construct work
vessels. Groupwide: O&M making
maximum use of group resource

60
JMU: Japan Marine United Corporation(equitymethodaffiliate)
Copyright © 2024
JFE Holdings,
Inc. All Rights
Reserved.

JFE-HD

Facilitate employee
participation

Safetymanagement

Social sustainability：Safety management, HR issues

Further increase efforts to prevent accidents not only by using facilities but
also through safety education and obedience of rules, in order to achieve
top-priority goal of zero major accidents.
Groupwide investment for safety issues：Approx. 10 billion yen/year
Implement multifaceted health/safety management using advanced IT (monitoring,detection, etc.).

Proceed following initiatives in order to allow employees to maximize
performance and enhance groupwide competitive advantages
Diversity &Inclusion

Maximize capabilities of employees with diverse
background

Personnel
development

Improve individual abilities and develop skills for global
competenceWorkstylereforms

Create workplaces and internal structures to maximize
employees potential and enable them to work safely
and confidently
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

61

JFE EngineeringSocial sustainability：Contribution to Regional Societies
through Engineering Business• Expand bases of local production and local consumption business (Food-recycling
business and regional PPS business)• Contribute to the regional society considering to expand combined utility service business in the
future.
• Realize circular economy by developing this business（Example） Local PPS Business ：Smart Energy Kumamoto
1.

Points2.
3.

Local production of energy for local consumption (Local generation of renewable-energy power tobe consumed in the regional societies）
Return economic merits to the city fund. (Investment for renewable energy and energy savingby citizen)
Strengthen disaster prevention and energy saving（Establishing self-supporting energy supply
line**, using storage battery）

Electricity supply throughself-supporting energy
supply line

Urban Energy

Business support
Electric
power
Disaster Prevention Bases（local parks）

Western waste disposal factory（built by JFE Engineering）

Smart Energy
Kumamoto

Electric
power

PublicFacilities

EMS (Energy Management
System)Electric
power
Eastern waste disposal factory■Demand: 226 public facilities in the city
■Energy source
Western waste disposal factory：5,980kw
Eastern waste disposal factory：10,500kw

Charge/Discharge（optimized control）*Regional PPS（Power Producer and Supplier）：Power producers and suppliers engaged in local production of energy for local consumption **SelfStorage battery
supporting energy supply line: Direct energy supply line from power generation plants to the connection points
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

62

JFE-HD

Establish economic sustainability (stable earnings power)
Establish sufficient profitability and stable financial base forproactive business operation for the mid/long-term growth

1. Shift focus of domestic steel business fromquantity to quality ーPursue world-class earnings power• Achieve world-class cost and quality competitiveness• Expand margins and achieve stable profit

2. Promote growth strategies
3. Significantly enhance competitiveness throughDX
4. Balance financial soundness with effective
investment based on a “select and concentrate”
approach
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

63

JFE Steel7 th mid-term business plan <Steel Business>
Aim to achieve world-class per-ton profit and enhance strategies for global growth
Promote innovation for carbon neutrality

Main initiatives
1. Transition to a lean, robust business structure by shifting focus
from quantity to quality
2. Expand and accelerate overseas business via solutions based on
knowledge, skills, and data
3. Use digital technology to strengthen production base andstrategies for new growth
4. Pursue innovation aimed at achieving carbon neutrality

Targets
FY2024Per-ton profit 10,000yen/ton*（Segment profit ¥230.0bn.）

Cf. 2H of FY2020（actual）• Per-ton profit 6,000 yen/ton• Segment profit ¥70.8bn.

*Segment profit / unconsolidated sales volume in tons

Equipment & Business Investment：
1,080bn. over 4 years• 40% for GX, DX, equipment modernization andprofitability improvements (6th mid-term actual:20%)• 30% for maintenance investments(6th mid-term actual:50%)64
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

JFE SteelTransition to a lean, robust business structureby shifting focus from quantity to quality

Improve per-ton profit by both fixed cost reduction and increase of high valueadded products ratio, and enhance earning base.
Achieve world-class costand quality competitiveness• Cost reductions: ¥120bn. over 4
years

Expand margins
and achieve stable profit• Increase mix of highly value-added
products* to an unprecedented 50%*Products that offer technological advantages, are• Labor productivity: ＋20％

（13% via structural reform +1,670→2,000t/person/year via DX etc.
Number of employees: 16,000→13,000）

Establish profit base that is resilient tochanges in economic conditions bycompleting structural reforms• Greatly reducing fixed costs• Lowering breakeven points• Introduce new technologies through DX• Improve production efficiency andyields• Greatly improve labor productivity• Ensure quality competitiveness byimproving product quality, production
efficiency and our delivery

recognized by customers for their value added andhave greater earnings power than commodity products.

••

Product-mix enhancements by focusing on
selective concentration in priority fields• Increase non-oriented electrical steel sheet
production capacity• Increase capacity for heavy, extra-thick steel platefor offshore wind-power applications• Production of high-tensile steel sheet for
automotive•

Fully overhaul our sales pricing
Ensure that products offering the type of highvalue that customers seek are suitably recognizedin the market, based on which we aim to fully
overhaul our sales pricing
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

65

JFE Steel

Expand and Accelerate Overseas Business• Expand returns from 1. vertical specialization business such as steel production applied forautomobiles• Further deepen integrated production in high-demand market (2. “Insider” business)• Expand 3. solution business, in which we provide cutting-edge technologies, operations andresearch knowhow （aim to triple earnings in FY2024 compared to FY2020）
India

1. Vertical specialization business

JSW•

Investment in 2009 (current equity ratio 15%)•

Further deepen direct participation such as
beginning FS of establishing a grain-oriented
electrical steel sheet manufacturing company

2. “Insider” business
3. Solution business

china

GJSS started renewal construction [FY2020]
Started JV of production of iron powder（BJCMX）[FY2018]
Started JV of production and sales of specialty bar
steel（BJSS)[FY2019]

Vietnam•MexicoStarted commercial production of largediameter welded pipe （AGPC）[FY2019]

FHS

Investment in 2015 (current equity ratio 4%)

ASEAN

UAE

JFE Chemical Established JV of anode materials[FY2019]
NUCOR-JFE STEEL MEXICO Began Operating Hot-dip
Galvanized Steel Sheet Production Facility for
Automotive Applications[FY2019]

JSGI（Indonesia）・JSGT（Thailand）
production and sales of galvanized steel sheet
and cold-rolled steel sheet for automotive

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

66

JFE Steel

Examples of Steel Business’s Critical Initiatives:
Strategy to Capture Growing Demand for Electrical Steel Sheet
Domestic

To expand non-oriented
electrical steel sheet (N/O)
production capacity Released April 1, 2021

JFE Steel decided that it would expand theelectrical steel sheet production capacity of its
West Japan Works (Kurashiki District) amid
increasing demand for high-grade N/O appliedfor EV and HEV motors.

＜Demand forecast of high-grade N/O＞
The global movement to tighten and accelerateenvironmental regulations will rapidly increasedemand for high-grade N/O, which are essential for
production of motors that drive electric vehicles.
CAPEX

Approx. 49.0bn.

Expected time tostart production

1H of FY2024

Expected capacity

Doubling the facility’s existing
capacity for producing highgrade non-oriented electricalsteel sheet

CO₂ reductions

Approx. 1.5Mt-CO₂/Year**CO₂ reductions effect resulting from expanding EV/HEV

Overseas

To conduct FS of grain-oriented
electrical-steel-sheet JV with JSW
in India
Released May 7, 2021

JFE Steel signed a memorandum of understanding toconduct a feasibility study with JSW, JFE’s strategic
alliance-partner in India, regarding establishing a
G/O manufacturing and sales joint-venturecompany in India.

＜Demand forecast of G/O＞
Demand for G/O, which are used for the iron coresof power transform, is expected to grow globallyamid continuous increase in demand for electric
power and expansion of reusable energy.
(Economic growth in India is estimated to boost its
local demand for electric power.)
2009 Signed comprehensive
strategic alliance agreement
2012 Started providing
N/O manufacturing technology
JSW became an India’s largest
N/O supplier2021 FS regarding establishinga G/O manufacturing and sales JV
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

67

JFE-HDJFE Group-wide Strategy to Capture Growing Demand forElectrical Steel Sheet（Steel Business and Trading Business）

JFE Steel
Production ofelectrical steel
sheetsJFE Shoji

Expand production and supply
function of high value-added
electrical steel sheets

Processing anddistribution ofelectric coresWorld’s No.1 global distribution
and processing system

Domestic

Increase electricalsteel sheet
production capacity

Overseas

Production & sales JV
with India’s JSW forelectrical steel sheets

Sharing
Strategies

Synergy

Expand collaboration
with alliance partners

Establish SCM in
new regions

Expand processing
functions in coil centers

Groupwide Strategy: Capture increasing demand for high value-added
electrical steel sheets both in domestic and overseas market

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

68JFE Engineering

7 th mid-term business plan <Engineering Business>
Expand sales revenue to 1-trillion-yen level in FY2030
Targets
FY2024（billion yen）
1,000

500

• Revenue• Segment Profit【Revenue】

650.0 billion yen
35.0 billion yen（billion yen）

1-trillion-yen level

650.0

40

【Segment profit】

30

485.7

20

20.1

23.1

24.0
Equipment & Business
Investment：
Approx. ¥220 billion
over 4 years

100

2020年度FY2020

FY20242024年度(Final Year of 7th
mid-term plan)

2030年
FY20300FY201835.0

FY2019 FY2020

FY2024(Final Year of 7th
mid-term plan)

1. Enhance mid/long-term priority areas（See next page）

Main
initiatives

Waste to Resources, Carbon-neutral business,
Combined utility service, Core infrastructure

2. Expand overseas business enhance EPC competitiveness, engage in
ODA, pursue M&A synergies in chemical plant field, participation in local
business in environmental, water and recycling fields

3. Promote DX initiatives

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69

JFE Engineering

Engineering Business’s Main initiatives

ーEnhancing mid/long-term priority areasー• Expand engineering business as a growth sector by helping to solve pressing issues in
global society, in view of increasing importance of the environmental, recycling and renewableenergy fields.
• Expand revenue and profit by setting the following four priority areas:

Waste to Resource

FY2024 revenue target¥290 billion

Carbon Neutral

FY2024 revenue target¥80 billion• Put priority in renewable energy(offshore wind-power generation,
biomass power plant, solar power
plant, geothermal power plant etc.)• Establish stable profit basein domestic environment
business• Priority investment and expansionof domestic market in recycling
business* *Food, Plastic, Incineration and Power generation• Develop carbon neutral
technologies.

Combined utility
services

FY2024 revenue target• Shift to comprehensive businessmodel, including for efficient
operation of facilities to contributeto energy savings anddecarbonization

Water
supply¥20 billion

Gas
Electricity
SupplyRecycling etc

Core infrastructure

FY2024 revenue target¥260 billion• New technologies to address newly arising needs forstrengthening and improving life of infrastructure• Strengthening of existing infrastructure →install new
product and method for construction• Improving life of existing infrastructure→install new
materials and new products

1. Waste to Resource：Recycling and waste-to-power generation etc. 2. Carbon neutral：Renewable energy, carbon recycling etc.
3. Combines utility services: contribute to the local-production and local-consumption (circular economy) by mutual combination among
various operation and maintenance business such as water, gas, electricity supply and recycling business/
70
4. Core infrastructure：infrastructure business to establish social foundation such as bridge andCopyrightpipeline.
© 2024 JFE Holdings, Inc. All Rights Reserved.

7 th mid-term business plan <Trading Business>

JFE Shoji

Establish growth foundation by enhancing SCM
TargetFY2024（bn.）

Segment profit
40

20

0

40bn.

【Segment Profit】
20.3

23.5

¥40 billion

27.6

Equipment & Business Investment ：Approx. ¥120 billion over 4 years

4th mid-term ave.

5th mid-term ave.

6th mid-term ave.

※4th and 5th mid-term used J-GAAPFY2024
7次中期(Final Year of 7th
mid-term plan)

1. Proceed key strategies for growthMain
initiatives

Establish No.1 position in global processing & distribution of electrical steel sheet,
Strengthen SCM of automotive steel composite materials, Accelerate efforts inoverseas construction materials business, Fully capture steel demand in Japan

2. Strengthen purchasing & sales capabilities（expand non-JFE Steelbusiness）
Increase sales of both JFE group products and alliance-partner products as well as actively
expand business with other suppliers’ products

3. Seize new business opportunities

Expand environmental-solutions business, DX initiatives

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

71

Trading Business’s Main initiatives

JFE ShojiーKey Strategies for growth, Strengthen purchasing and sales capabilitiesー

Strengthen SCM of Automotive steel
Enhance SCM for high-tensile steel both inoverseas and domestic market to increase
sales of JFE’s strategic products
Further collaboration with JFE Steel both indomestic and overseas market• Along with the EV and HEV promotion and increasingneeds for lighter body of automobiles, application
volume of high-tensile steel for automotive is
expected to increase because of its characteristics
and environmental-friendly advantages.

China
ASEAN

Japan

US

Strengthen SCM along withgroupwide optimum businessacross four-pillar regions

Accelerate efforts in overseas
construction materials business• In ASEAN and North American regions, expand
trading in this sector and collaborate with local
companies to strengthen business foundations.

Fully Capture steel demand in Japan
Increase earnings by enhancing JFE Group’s
presence through expansion of function(quality) and additional trading (quantity)

Strengthen processing and distribution
in domestic steel business• Strengthen SCM continue to strengthen collaboration
beyond group boundaries and establish optimum
processing and distribution system• Widen processing functions to expand businessexpand capabilities including secondary and tertiary
processing to build strong foundation to meet various
types of clients’ needs

Pursue the best sales structure by sharing
strategies with JFE Steel in the domestic
market, which is the most critical

Expand non-JFE Steel business• Aim to expand business to meet clients’ needs.
Increase sales of both JFE group products and alliancepartner products as well as actively expand businesswith other suppliers’Copyrightproducts
72© 2024 JFE Holdings, Inc. All Rights Reserved.

JFE-HDJFE Group’s DX strategies• Promote DX in every business area such as advancing productivity throughinnovation, transforming exiting businesses and creating new businesses.
• Proactively invest money and human resource necessary for DX：
DX investment approx. 120 billion yen over 4 years

JFE SteelUse digital technology to streamline production
operations and implement new growthstrategies
TargetInvestment

Labor productivity: 20% improve**FY2024 structural reform 13%+ DX effects etc.

115 billion yen
over 4 years

JFE Engineering
Digitalize entire business and provide
new digital services to customers.
TargetDesign efficiency: 20% increase
in FY2024

JFE Shoji
Improve customer service, pursue new
businesses by leveraging DX＜JFE Steel’s initiatives＞• Enhance competitiveness by introducing cyber-physical systems on all
production lines••• Improve production efficiency, labor productivity and yield ratio etc.

Utilize digital technologies to raise customer satisfaction through quality
enhancements and better delivery services.
Actively expand solutions businesses

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

73

JFE-HD

Balance Financial Soundness with Effective Investment based ona “select and concentrate” approach
Selective maintenance investment, focusing on investments for enhancing
competitiveness and establishing stable profit base
Ensure earning source by asset compression••

1. Equipment & Business Investment about 1,450 billion yen over 4 years• Equipment investment：Approx. 1,200 billion yen over 4 years
GX：About ¥340 billion over 4 years*, DX：About ¥120 billion 4 years

Execute maintenance investment carefully selected from the perspectives of effectiveness and necessity
Shift focus on investment for improving profitability and cutting-edge facilities• Business investment：About 250 billion yen over 4 years

Steel business：expand overseas insider businesses, Engineering business：expand operation &maintenance business and overseas business*Steel Business：¥160 billion
Trading business：business investment including M&A for increasing
Engineering Business：¥130 billion
earnings from processing and distribution businessTrading Business： ¥50 billion

2.
•

3.

•

Ensuring earning source

Generate cash by asset compression：Approx. 200 billion yen over 4 years
Assets that contribute little to earnings or are tied to unprofitable businesses**

Returns to shareholders

Dividend payout ratio: Around 30% on par with the target during 6 th mid-termbusiness plan**Regarding development plans for partial area of Keihin district resulting from structural reform（Ogishima area):
We will disclose development plans in FY2023, and strive to see some properties put to new use by FY2030.
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

74

JFE-HD

Main Financial Data and Performance & Profitability Targets

Operatingcompanies

Consolidated

7 th mid-termbusiness plan
FY2024FY2020
ActualBusiness profit¥ 320.0 billion¥ -12.9 billion

Profit attributable to owners of the parent¥ 220.0 billion¥ -21.8 billion

10%

-1.3%

About 3x8.1x

About 70%

93.2%

10,000 yen/ton¥ 230.0 billion-3,000 yen/ ton¥ -65.4 billion

Engineering business Segment profit
Revenue¥ 35.0 billion¥ 650.0 billion¥ 24.0 billion¥ 485.7 billion

Trading Business Segment profit¥ 40.0 billion¥ 20.0 billion

ROE
Debt/EBITDA
D/E*1
Steel businessProfit per ton*2
Segment profit

Payout ratio*1 For liabilities with equity subject to credit ratings, theseequities reflect the evaluations of rating agencies

7 th mid-termbusiness plan
Around 30%

6 th mid-termbusiness plan
Around 30%*2 Steel business profit per ton (consolidated segment profit /non-consolidated sales volume) Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

75

Appendix(4)JFE Steel Carbon Neutral
Strategy Briefing

Copyright © 2024 JFE Holdings, Inc. All Rights Reserved.

76

JFE Steel’s Carbon Neutrality Vision 2050
Store CO2 inslag/concrete

CCS

Storage

Reduction

CCS

More energy-saving equipment

CO2

CO2

CO2

Carbon-freehydrogenIntelligent
Usage
Deploy more carbon-recycling
technologies in direct-reduction
steelmaking

Fuel/oxygen +powdermaterial

Converter
Carbon-freeelectricity

Increased use of scrap(external conditions)

CCS

Oxygengas

Introduce EAFs

Energy savings,
etc.

2050

(external conditions)

Effective use of
scrap

Electric arc
furnace (EAF)

Carbon-freeelectricity

Carbon neutrality

Breakdown of CO2 reduction

Large, highefficiency EAFs

Carbon-recycling blast
furnaces & CCU(external conditions)

Carbon-recycling direct-reduction

DRI
CO2 & H2O

Pellets

Blast furnace gas (CO2, CO & H2)

Carbonrecycling
O2*Uses circulating gas

Methanation

H2O

CH4: Carbon-neutral reductant

Hydrogen(indirect hydrogen
injection)

Reduction
furnace

Shaft gas injection(SGI)*

More use of CCU at industrial complexes

CCUS

Reduction furnace gas (CO2, CO & H2)

CO & H2

Circulates

Carbon-recycling blast furnace
Coke

Carbon-freehydrogen

CO2

Carbonrecycling

CO2+4H2=
CH4+2H2O

CH4

H2O
out ofsystemMethanation

Hydrogen(indirect hydrogen
injection)

H2O

CH4: Carbon-neutral reductant
DRI

Blast furnace, EAF & converter

Combine reduction, intelligent usage and CO2 storage
to realize a carbon-neutral steel business by 2050
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JFE Steel’s Transition: Direction and Challenges▶ Developing technologies to produce high-quality and high-functional steel in the GI Fund projectby using technologies to utilize hydrogen in the blast furnace process and direct-reduction
steelmaking as well as EAFs.
▶ Considering the transition of one blast furnace, which is to be refurbished in 2027, to alarge, high-efficiency EAF, assuming government support. Aiming for lower CO 2 emissions
and business growth.
▶ Policies on the transition after 2030 will be formulated later, taking account of issues such as
the development of plentiful, low-cost, and stable supply networks of hydrogen and power aswell as demand for green steel.
Ultrai n n o va t i ve
blast furnace(CR blast
furnace)Utilizingh yd r o g e nthroughdirectreduction
steelmaking

EAF

CCUS * 2

2024

Small-scale
tests

1:25 scaleMid-scal edemonstration tests

1:4 scale

2040

Supply a large
amount of hydrogen
Implement

S u p p l y l o w- c a r b o n ,high-grade
direct-reduced iron

Improvequality,increase
size

Implement

FY2023
Started a joints t u d y o n CCS *3
i n M a l a ys i a*2 CCUS: Carbon dioxide Capture, Utilization and Storage*3 CCS：Carbon dioxide Capture and Storage

H2
Hydrogenreduction

Implement in
2027

Develop a low- c os t,s table gr een powers upply networ k

Un d er co n sid erat io n

2050
×α

Supply a lar ge am ount ofhydr ogen<In Japan>[GI Fund]D e ve l o p h i g h quality steel
manufacturingmethods

Supply alarge
amount ofhydrogen(considering hydrogenp r o c u r e m e n t a t a p p r o x. 1 0 0 , 0 0 0
t o n s / y e a r wi t h MC H * 1 , e t c . )[G I Fund] Develop pr oc es s

<Outside Natural gas
reduction
Japan>＋CCS*32030

Deployment
optimum×β
processes basedon thedevelopment
status of green
infrastructure×γ
and process
costs

Consider expansion within andoutside Japan*1 MCH (Met h yl c yclo he xa n e ):CO2 emitted
a hydr og en c arri er c om pos ed of l i qui d m ade by addi ng hydr og e n t o t ol uene
through the blast Implement
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 78
furnace process

JFE’s Carbon Neutrality Action Plan
▶ JFE Steel is introducing low-carbon steel processes during its “transition period” to 2030.

▶ In its “innovation period” from 2030 to 2050, JFE Steel aims to develop and implement ultrainnovative technologies for carbon neutrality.

Transition period

Increasingly deploy low-carbon technologies
through capital investment to achieve targets

Innovation period
 Swiftly establish and deploy ultra-innovativetechnologies

such as cutting 2013-level CO2 emissions by
30% or more by 2030
Accelerate multitrack R&D targeting ultra-

 Collaborate with communities and industrial
complexes toward carbon neutrality

innovative technologies for innovation period Grow markets for sustainable green steel based
 Create markets for renewable green-steel

materials based on actual environmental valueon actual environmental value→Grow demand leading to virtuous cycles→ Create initial demand
Maintain the competitiveness of Japanese steel
Stimulate demand through government policy

through plentiful, low-cost, stable supplies of carbonfree hydrogen and electricity

Behavior must be shifted on both supply and demand sides to create markets for green steel
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Progress on the CO 2 Emissions Reduction Plan
▶ Moving forward according to the FY2022 plan, achieving a 13% reduction. Also expecting toachieve the FY2024 year end target.
▶ Making solid progress in investment approval and implementation to achieve the reduction targets.
Already approved for approx. 110 billion yen by FY2022.
(million tons)
▽ 13%
▽ 18%
▽ 30% or more
58.10(▽ 7.72 million tons)(▽ 10.50 million tons)(▽ 17.40 million tons)
7.72

50.38

2.78

47.60
.
6.90

FY2013Emissions
ResultFY2022Emissions
ResultAiming for 18% reduction by the end of FY2024(KPI progress up to FY2022)

 Capital investment
Completed approval for 90% of total CO 2 reduction in theinvestment plan against the CO 2 reduction target *through energy savings and technological development→ Completed approval for 88% of the total
investment plan Emissions reduction
Achieve 50% of the CO2 reduction target* through energy
savings and technological development→ Achieved 58% of the CO 2 reduction target* CO 2 reduction through energy savings and technological development: 3.00 million tons

End of
FY2024
Target40.70
FY2030TargetAiming for 30% or more reduction by FY2030
Energysavings andhighefficiency

Low-carbon
feedstock &fuel
Utilizing
EAFs

・Upgrade to high-efficiency coke ovens inFukuyama (▽ 16)
・Improve efficiency of power demandfacilities
・Leverage AI & DS
・Expand the use of scrap in converters(▽ 150)・Use reduced iron in blast f urnaces
and converters ( ▽ 200 )・Sendai: Upgrade existing EAFs ( ▽ 1 0 )・Chiba: Introduce EAFs f or SUS ( ▽ 4 5 )・Kurashiki: Large, high-ef f iciency EAFs(▽ 260)* The projects in blue bold font are already approved. Numbers inparentheses indicate the amount of reduction (10,000 tons/year).
Copyright© 2024
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Reserved.
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80

Projects Supported by the Green Innovation Fund
▶ Promoting the development of ultra-innovative technologies in the NEDO project on hydrogenutilization in iron and steelmaking processes, financed by the Green Innovation (GI) Fund.
▶ Started building a small test blast furnace (150m 3 ) in Chiba District, aiming for swift
implementation.
U l t r a - i n n o va t i ve b l a s t f u r n a c e( C a r b o n - r e c yc l i n g b l a s t f u r n a c e )Sinteredore

Direct-reduction steelmaking

Coke C

Fe2O3

CO2
CarbonCCUS

H2Methanation facility
Methane CH4 (CNreductant)
OxygenO2HydrogenH2(use on-site, circulate
through a reduction
furnace, etc.)

DRI

Melt
ing
EAF

TargetReduce CO2 emissions by 50% or more(compared to conventional blast furnaces)(compared to conventional blast furnaces)

Description• D e ve l o p i n g t e c h n o l o g y f o r s e a m l e s soperations
b e t we e n t h e b l a s t f u r n a c e a n d t h emethanation facility

PeriodTe s t s c h e d u l e d f o r F Y2 0 2 5 - 2 0 2 6

BurnerPreheating of
reduced iron
Cold iron source
preheated byexhaust gas

Slagelectricity

Reduce CO2 emissions by 50% or more
• Te c h n o l o g y t o i n j e c t a l a r g e a m o u n t o fo xyg e n a n d m e t h a n e

Electrode (-)

Generateelectricity
orCarbon-freeReduction
furnaceHydrogenBy-product gas

HydrogenH2

recycling

Blast
furnaceD e ve l o p m e n t p r o j e c t

Low-gradeiron oreL a r g e , h i g h - e f f i c i e n c y E AF

Moltensteel
Molten steel
stirring coil

Bottom electrode (+)

Establish high-quality and high-efficiency
melting technologies• Heat compensation for hydrogen
reduction(injection of high-temperature hydrogen andrecycled methane)• I m p r o vi n g s t e e l q u a l i t y b yf a c i l i t a t i n g t h e d e n i t r i f i c a t i o n wi t h
h y d r o g e n g a s a n d d e p h o s p h o r i za t i o n
wi t h s u p p r e s s r e o xi d a t i o n• Optimizing conditions
for injecting reduced gas according to
the grade of the raw material• High-efficiency melting throughburner lance, preheating of reduced
iron, and molten steel stirring

Te s t s c h e d u l e d f o r F Y2 0 2 4 - 2 0 2 6Te s t s c h e d u l e d f o r F Y2 0 2 4 - 2 0 2 5
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81

Overall Scale of GI Fund Projects▶ Development toward Stage Gate Reviews scheduled mainly in FY2025–2026▶ Studies also underway with a view to actual implementation in 2030–2040s
Medium-scale
tests

Develop technologies & conduct
small-scale tests

2021〜2025

2026〜2030

Large/full-scale
tests

2031〜2040★ Stage Gate
2041〜2050

R&D Project 1: Develop hydrogen-reduction technology for blast furnaces(1) Develop hydrogen reduction
Use test blast furnacetechnology, etc., using on-site
Modify actual furnace
Designhydrogen★

(2) Develop low-carbon technology,
etc., using external hydrogen
Designand CO2 in blast furnace& build
exhaust gas★Implement

Test in actual furnace

Develop technologies
Use small test blast furnace
DesignCarbon-recycling blast furnace

Midsize test blast furnace

actual★ Build
furnaceSuper-COURSE50

Testing

Testing(Phase 1)(Phase2)

Testing in
actual furnace★Implement

R&D Project 2: Develop direct hydrogen reduction technology for reducing low-grade iron ore using only hydrogen
Develop technologies(1) Develop direct hydrogen
reduction technology

Design & build Use small test blast furnace

Carbon-recycling direct reduction steelmaking

DesignHydrogen reduction steelmaking(2) Develop technology forremoving impurities in EAFs
using DRI

actual★ Build
furnace

Midsize direct reduction furnace
Testing

Testing(Phase 1)(Phase 2)★Implement

Develop technologies
Large test EAF

Design & build Use small test blast furnace

High efficiency and high quality in large EAF

Design★

Test in actual
furnace

Test in actual
Testing ★Implement
furnace(Phase 1)

Source: METI
（https://www.meti.go.jp/policy/energy_environment/global_warming/gifund/pdf/gif_05_randd.pdf）(Phase 2)

Note: All schedules are projections

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Stimulating Demand for Green Steel▶ In the EU, green steel is branded and sold using a mass balance approach.
▶ Achieving 30% CO2 reduction by FY2030 will enable JFE Steel to supply up to 5M tons ofgreen steel per year using the same approach.
▶ To create a carbon-neutral world, government policies need to encourage behavioral
changes in both the supply and demand sides in order to drive changes in society andspark innovation for new industrial competitiveness.

Supply side

Demand side●

Huge capital investment is needed to introduce lowcarbon & ultra-innovative technologies. (1 trillion yen
in low-carbon investments by 2030)●

Green steel products do not directly benefit
consumers in terms of better quality, performance,
convenience, etc.

●

While JFE Steel will strive to minimize R&D cost
increases, some increase will be inevitable in theeffort to create new environmental value.

●

Ethical consumption appears to be on the rise, but inJapan awareness of environmental value is low.

●

Incentives are needed to encourage the recognitionof environmental value and the purchase of productsthat significantly reduce carbon.

●

Prospects for appropriate returns on suchinvestments also will be needed.

To support investment in low-carbon technology during the transition period until 2030 and toprepare for further large-scale investment during the innovation period, a green steel market must
be created at an early stage (transition period) and government policies must raise the public’s
awareness as well as encourage steel consumers to change their behavior.
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Rights83Collaborating with Society on Carbon Neutrality▶ While achieving carbon neutrality is a top management priority for JFE Steel, generating
environmental value involves large investments and cost increases associated withtransitioning, requiring efforts beyond the private company level.
▶ Mechanisms are needed so that society, as the beneficiary of green steel, helps to cover the associatedcost increases through government support, collaborative initiatives, etc.
Initiatives as a private company

Necessary government support• Solidly execute ultra-innovativetechnologies and f ormulate plans to
implement them in society• Clarif y detailed f rameworks andschedules on long-term government
support f or large-scale R&D costs
and capital investments• Raise public awareness ofenvironmental value created throughgreen steel, applying the massbalance approach<Green steel guidelines and setting international
standards>(The Japan Iron and Steel Federation, W orld Steel
Association)• Visualize environmental value andparticipate in the implementation of
the new Global Data Collection
Framework agreed upon by the G7• Formulate a plan to develop
inf rastructure f or the low-cost, stable,
large-scale supply of carbon-f reehydrogen and electricity• Formulate a plan to develop CCUS
and green inf rastructure throughcollaboration with industrial
complexes, corporations, etc.

Achieve economic
grow ththrough decarbonization

Build a competitive
advantage
throughgovernment-private
collaboration• Ensure government support comparable tothat in Europe and the US (e.g., subsidies,tax mechanisms) and international
competitiveness of industrial electricity
prices• Provide support f or building a greenhydrogen supply chain that will
become the new inf rastructure• Take measures to stimulate demandf or green steel, which has highenvironmental value, throughprocurement support (e.g., public
procurement)• Relax the application of competition
laws in order to not hinder thepromotion of innovation and joint
ef f orts by companies
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Copyright © 2024 JFE Holdings, Inc. All Rights Reserved
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