Securities Code︓5411.T

JFE Group

Financial Results for First Half of
Fiscal Year 2023 ending March 31, 2024

JFE Holdings, Inc.
November 6, 2023
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

1

A table of contents
 Financial Highlights
 JFE Holdings’ Financial Results for First Half of Fiscal Year2023 (April 1 to September 30, 2023) and Financial
Forecast for Fiscal Year 2023 (April 1, 2023, to March 31,2024)
 Dividends
 Financial Forecast for Fiscal Year 2023 by Segment
 Topics
Appendix 1: Profit/Loss Analysis
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 half of FY2023.
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 © 2023 JFE Holdings, Inc. All Rights Reserved.

2

JFE-HD

Financial Highlights
Business Profit ¥164.3bn.

Results(Increased by ¥39.3bn. from previous forecast,decreased by ¥23.6bn. year-on-year）
for 1H of[Excluding Inventory
FY2023 Valuation etc.]¥165.3bn.

(Increased by ¥24.3bn. from previous forecast,increased by ¥93.4bn. year-on-year）• From previous forecast: Profit increasedby 39.3bn. due to initiatives such as sales
price improvement.
• Year-on-year: Profit decreased by¥23.6bn. due to the loss of inventory
valuation gains, but profit excluding
inventory valuation increased sharply
by ¥93.4bn.

290.0bn.

Business Profit ¥Forecastof
FY2023• Business profit is unchanged from theprevious forecast.
(As previous announced）[Excluding Inventory• Excluding inventory valuation
Valuation etc.]¥bn.
(Decreased by ¥25.0bn. from previous forecast） differences, profit is expected to fall by

290.0

Steel business profit per ton*︓10,000yen/t (As previous announced)

Crude Steel Production(Standalone)︓

approx. 23.80Mt¥25.0bn. from the previous forecast
due to a delay in the recovery of overseas
steel markets, soaring coking coal prices
and a decline in crude steel production.

• The Board of Directors resolved to pay an(Decreased by 0.80Mt from previous forecast） interim dividend of 50 yen (As previously
announced). Annual dividend as previously
announced.

Dividend 100yen (Interim dividend 50yen)

Topics・Shutdown of upstream and hot rolling facilities in Keihin district and its land utilization
・JGreeXTM adoption expansion
・Issuance of new shares and convertible bonds* Steel business profit per ton :(consolidated segment profit excluding Inventory Valuation etc.) / non-consolidated sales volume)

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

3

Consolidated Results for First Half of
Fiscal Year 2023
(April 1 to September 30, 2023)

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

4

JFE-HD

Financial Results for 1H of Fiscal Year 2023
 Business profit for the first half of the year was ¥164.3bn.

(increased by ¥39.3bn. from the previous forecast, decreased by ¥23.6bn. year-on-year.) Excluding inventory valuation differences, business profit increased by ¥24.3bn.
from the previous forecast and by ¥93.4bn. from the same period last year.
（billion yen）

Revenue
Business Profit[Excluding Inventory
Valuation etc.]

FY2023
1H Forecast(Previous)

FY2023
1H Actual

2,564.3

2,610.0

2,576.5

12.2(33.5)

187.9

125.0

164.3

(23.6)[93.4]

39.3[24.3]FY2022
1H Actual(Apr-Sep)(Apr-Sep)(Apr-Sep)

Change(FY2022→FY2023)

Change(Previous→Actual)[71.9][141.0][165.3]Finance Income/Costs(6.6)(10.0)

(8.9)

(2.3)

1.1

Segment Profit

181.2

115.0

155.3

(25.9)

40.3

ー

ー

ー

0.0

0.0

181.2

115.0

155.3

(25.9)

40.3(57.9)(30.0)(45.2)

12.7(15.2)

123.2

85.0

110.0

(13.2)

25.0

Exceptional Items

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

Profit Attributable to
Owners of Parent

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.
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.
Segment profit is profit including financial income in business profit.

5

Financial Results for 1H of Fiscal Year 2023
(by Segment)（billion yen）

FY2022
1H Actual(Apr-Sep)

FY2023
1H Forecast(Previous)

FY2023
1H Actual(Apr-Sep)

Change(FY2022(Apr-Sep)

JFE-HD

Change→FY2023)(Previous→Actual)Steel Business

1,918.9

1,880.0

1,865.8(53.1)(14.2)Engineering
Business

219.0

230.0

248.4

29.4

18.4

Trading Business

750.2

780.0

742.0

(8.2)

(38.0)

Adjustments(323.9)(280.0)(279.7)44.2

0.3

2,564.3

2,610.0

2,576.5

12.2(33.5)

187.9

125.0

164.3

(23.6)

39.3

(6.6)

(10.0)

(8.9)

(2.3)

1.1

Steel Business

148.2

87.0

122.8

(25.4)

35.8

Engineering
Business

(3.9)

5.0

8.7

12.6

3.7

Trading Business

40.6

26.0

26.8

(13.8)

0.8

Adjustments

(3.6)

(3.0)

(3.1)

0.5

(0.１)

181.2

115.0

155.3

(25.9)

40.3

Revenue
Business Profit (A）Finance Income/Costs（B）

Segment Profit(A+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.

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

6

JFE Steel¥35.8bn. Increase in JFE Steel’s Segment Profit(FY2023.1H (Forecast) vs. FY2023.1H(Actual))Unit

FY2023
1H(forecast)

FY2023
1H(Actual)（billion yen）
FY2023
1H(Actual)

87.0

122.8

35.8

103.0

123.8

20.8

Crude Steel(Standalone)

Mt

Approx. 12.30

12.16

Shipment(Standalone)

Mt

-

10.65

Segment
ProfitAverage
Sales Price(Standalone)

000
yen/t

Approx. 128

129.3

ExcludingInventory
Valuation etc.

Exchange
Rate

Yen/$

Approx. 139

139.9

1. Cost＋5.0• Operational improvement

2. Volumeand Mix(3.0)• Crude Steel Production approx.12.30Mt⇒12.16Mt

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

ChangeJFE Steel

FY2023
1H(forecast)＋12.0• Improved spreads due continued sales price improvement
efforts+15.0• Inventory valuation +4.0 (-3.0→+1.0)• Carry over +2.0 (-19.0→-17.0)• Foreign exchange valuation+9.0 (+6.0→+15.0)+6.8• Group companies +6.0 etc.
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

7

JFE Steel¥25.4bn. Decrease in JFE Steel’s Segment Profit(FY2022.1H (Actual) vs. FY2023.1H (Actual))Unit

FY2022
1H

FY2023
1H

Crude Steel(Standalone)

Mt

12.64

12.16

Shipment(Standalone)

Mt

10.86

10.65

Average
Sales Price(Standalone)

000yen/
t

131.6

129.3

Exchange
Rate

Yen/$

131.6

139.9

（ billion yen ）JFE SteelSegment
ProfitExcludingInventory
Valuation etc.

FY2022
1H

FY2023
1H

148.2

122.8

(25.4)

32.2

123.8

91.6

1. Cost＋15.0• Operational improvement

2. Volumeand Mix(10.0)• Crude Steel Production 12.64Mt⇒12.16Mt

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

Change＋144.0• Improved spreads due continued sales price improvement
efforts(117.0)• Inventory valuation -81.0 (+82.0→+1.0)• Carry over -22.0 (+5.0→-17.0)• Foreign exchange valuation-14.0 (+29.0→+15.0)(57.4)• Group companies -8.0
• Foreign exchange effects on trade -11.0• Depreciation cost -10.0 etc.
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

8

Financial Forecasts for Fiscal Year 2023
(April 1, 2023, to March 31, 2024)

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

9JFE-HD

Financial Forecast for Fiscal Year 2023
 Full-year business profit is expected to be ¥290.0bn.
(as previous forecast, increased by ¥54.2bn. year-on-year)
 Full-year profit attributable to owners of parent is expected to be ¥190.0bn.
(as previous forecast, increased by ¥27.4bn. year-on-year)（billion yen）
1H

Revenue
Business Profit[Excluding Inventory
Valuation etc.]

FY2023
Forecast（Previous)

FY2022
ActualFull year

Full year

FY2023
Forecast(Updated)
1H

Full year

ChangeChangeFY2022→FY2023

Previous→Updated

Full year

Full year

2,564.3

5,268.7

5,380.0

2,576.5

5,360.0

91.3(20.0)

187.9

235.8

290.0

164.3

290.0

[290.0]54.2[127.2]0.0[(25.0)][71.9][162.8][315.0][165.3]Finance Income/Costs(6.6)(14.8)(20.0)(8.9)(20.0)(5.2)

０.0

Segment Profit

181.2

221.0

270.0

155.3

270.0

49.0

０.0

ー

(10.7)

ー

ー

ー

10.7

０.0

181.2

210.2

270.0

155.3

270.0

59.8

０.0

(57.9)(47.6)(80.0)(45.2)(80.0)(32.4)

０.0

123.2

162.6

190.0

110.0

190.0

27.4

０.0

Exceptional Items

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

Profit Attributable to
Owners of Parent

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

10JFE-HD

Financial Forecast for Fiscal Year 2023
(by Segment)
FY2023
Forecast（Previous)

FY2022
Actual（billion yen）

FY2023
Forecast(Updated)

ChangeChangeFY2022→FY2023

Previous→Updated

Full year

Full year

Full year

1,865.8 3,800.0(81.1)

30.0

550.0

37.5

０.0

742.0 1,580.0

65.9(40.0)(570.0)68.9(10.0)

2,576.5 5,360.0

91.3(20.0)

1H

Full year

Full year

Steel Business

1,918.9

3,881.1

3,770.0

Engineering
Business

219.0

512.5

550.0

Trading
Business

750.2

1,514.1

1,620.0

Adjustments(323.9)(638.9)(560.0)2,564.3

5,268.7

5,380.0

187.9

235.8

290.0

164.3

290.0

54.2

0.0

(6.6)

(14.8)(20.0)(8.9)(20.0)(5.2)

0.0

Steel Business

148.2

146.8

200.0

122.8

200.0

53.2

0.0

Engineering
Business

(3.9)

13.4

25.0

8.7

25.0

11.6

0.0

Trading
Business

40.6

65.1

48.0

26.8

48.0

(17.1)

0.0

Adjustments

(3.6)

(4.3)

(3.0)

(3.1)

(3.0)

1.3

0.0

181.2

221.0

270.0

155.3

270.0

49.0

0.0

Revenue
Business Profit (A）Finance Income/Costs（B）

Segment Profit
(A+B)

1H

248.4

(279.7)

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

11

JFE-HD

Dividend The Board of Directors resolved to pay an interim dividend of 50 yen per share.
(As previous announced)
 The annual dividend is expected to be 100 yen per share, based on the businessoutlook and the payout ratio policy of about 30%.(As previous announced)(yen/share)

Payout ratio

160

31.9%

140
120

33.5%

N/A

N/A

80
50

30

50

40

0

30
FY20176045
20FY2018FY201932.1%

Annual100yenYear-end dividend

80

20

28.5%

Interim devidend

100

60

28.0%

(50)

50

50

FY2022

FY202310
FY2020

FY2021

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

12

JFE Steel

Financial Forecast for Fiscal Year 2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

13

JFE SteelBusiness environment（Domestic）


Although the level of activity in the automotive sector is improving, demand continues to be postponed,
particularly in the civil engineering and construction sectors, due to labor shortages and the impact ofsoaring materials prices.
Demand for steel products is expected to be flat from the first half to the second half of the year.

More
than

150

50

Avg

Avg

FY19

FY20

FY21

1Q

223

210

2Q

3Q

4Q

1Q

FY22

230

230

2Q

2H

FY23

8

【Outlook for Domestic Ordinary
Steel Consumption】(quarter basis)
7
Manufacturing Nearly unchanged
6

Construction

5
4
3
2

1H

1H
2H
1H 下平均
2H
1H
2H
1H
2H
上平均
下平均
上平均
下平均
上平均
上平均
下平均
上平均
avg
avg

avg

avg

avg

avg

avg

avg

avg

3Q
3Q
qqq

FY19
FY20
FY21
FY22
FY23
Source: Ministry of Economy, Trade and Industry, “Outlook for SteelConsumption” 12 oct. 2023. (FY2022, 3Q and after is estimated results)• As for construction machinery, demand for mining is strong andstable due to high resource prices, but a decline in external
demand is seen in construction and civil engineering. It isnecessary to keep an eye on this trend.
• Industrial machinery should be closely watched as it isincreasingly cautious about investment due to rising interest
rates and other economic uncertainties.
• 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.
• The number of new housing starts has stagnated, and thenumber of small and medium-sized projects has continued
to be in a slump.

Civil engineering

Avg

167

215

Construction

188

205

• Each company has a backlog of orders and is highly motivated to
produce.
• Semiconductor supply risks are gradually improving, andproduction levels are expected to recover moderately.
• Despite the effects of soaring materials prices and labor
shortages, the company has secured a two-year backlog oforders, which is the standard for stable workload.
• The current level is expected to remain stable over the next
two to three years.

Other manufacturing

199

Shipbuilding

237

Automobile

Recoverytrend

10,000 units.

Domestic Ordinary Steel Consumption（million tons/Q）【Trend by Sector】【Outlook for Domestic Auto Production】

250• Although budget measures continue to be implemented at a highlevel, it is expected to be affected by soaring materials
prices and labor shortages.
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

14

JFE SteelBusiness environment（Overseas）

 In China, steel exports increased due to sluggish domestic demand caused by a slump in thereal estate sector, resulting in a loosening of overseas steel supply and demand andcontinued stagnation in the market.
 Although Chinese government stimulus measures and curbs on crude steel are expected, it willtake time for steel demand and market conditions to recover in earnest.
110【China's crude steel production
and steel exports】

100
Crude steel production(per month)（Mt）
90

Avg(2020)
88Mt/Month90

94

Avg(2022)
84Mt/Month

86

4-6

7-9

10-12

2020

1-3

4-6

7-9

10-12

1-3

4-6

2021

7-9

10-12

9

6

Steel
exports(right axis)
1-3（Arrows indicate changes from the previous forecast）
World

1-3

2022

4-6

7-9

1,000

【 China : Steel market price 】

（$/ｔ）

900

HRC Price

800

continued
stagnation

500
400

※HRC Price：Average pricein 5 cities in China
20.10

21.4

21.10

22.4

22.10

23.4

23.10

India

ASEAN-5

2.1%

3.0%

7.2%

4.5%

Jul. 2023

3.0%

1.8%

5.2%

6.1%

5.3%

Oct. 2023

3.0%

2.1%

5.0%

6.3%

5.2%

Forecast

Source：IMF World Economic Outlook Update July 25 and October 10, 2023

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

Thin
Sheet

・In China, domestic demand has slumped due to a slow recovery in the real estate
sector.
・In Southeast Asia, the steel market continued to stagnate due to an increase inimported materials from China, a decline in external demand and a decline inresource prices.

Automobile

・Demand is firm and production levels are expected to recover gradually.
・However, the recovery is expected to be moderate compared to theprevious year due to the prolonged crisis in Ukraine, rising prices and interest
rate hikes mainly in the United States, as well as a slowdown in growth in China.

Shipbuilding

・China and South Korea shipbuilders are increasing orders for new construction
and securing stable contracts.
・Despite the impact of the labor shortage, it is expected to be firm as the labor
shortage is gradually being resolved.

Energy・While oil and gas prices has fallen temporarily due to fears of a slowdown in theeconomy, investment in projects to develop oil and natural gas plants is
expected to remain strong.

700
600

China

3.5%

3

2023

US

2022 Estimate

Forecast

77

76

70

(Mt)

88 91

84

82

81

78

60

93

Avg(2021)
86Mt/Month80【Real GDP Growth Forecast in 2023】

12

97
90 90

Annual crude steel
production (per month) 15
2020: 1,053 million tons (88)2021: 1,033 million tons (86)2022: 1,013 million tons (84)

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

15

JFE SteelRaw materials market trends
 Key raw materials

Iron ore is currently hovering around $100 FOB amid a slump in the Chinese steel market.
Since September, coking coal has surged due to increased demand in India and has exceeded
FOB $300.
• Both iron ore and coking coal are expected to remain at current levels.
(The effect of weather should be carefully observed.)••

 Metals

Metals prices remain weak due to the sluggish European economy and the slower recovery in
China's economy and steel demand.

•$225($/DMT)$200$700

Iron Ore（Iron Ore Fines from Australia）$600

Term-Contract FOB

$175
$150

$500

Term-Contract FOB

$400

$125

($/WMT)

Coking Coal
（Hard Coking Coal from Australia）

$300

$100

$200

$75

$50
$100
21/4 21/7 21/10 22/1 22/4 22/7 22/10 23/1 23/4 23/7 23/10
21/4
TermContract
FOB

Apr-Jun

Jul-Sep

Oct-Dec

Jan-MarApr-Jun

Jul-Sep

$/DMT

118

133

103

85

112

107

FY2022

21/7 21/10 22/1

Oct-Dec

TermContract
FOB

Apr-Jun

Jul-Sep

103

$/WMT

526

287

FY2023

22/4

22/7 22/10 23/1

23/4

FY2022

23/7 23/10

FY2023

Oct-Dec

Jan-MarApr-Jun

Jul-Sep

Oct-Dec

279

315

283

240

ー

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

16

JFE Steel

Crude steel productionCompared with previous assumptions, the coking coal market has risen sharply, and therecovery of overseas steel demand and market conditions has been slow. Standalone crude
steel production is expected to fall to approx. 23.80 Mt per year, mainly due to a decline inexports.（down 0.80Mt from the previous forecast）
Standalone crude steel
production<Harf year>

Unit: MT
Decreased from the previous forecast(1H:-0.14Mt, 2H:-0.70Mt)

1,200

Exports
Decline

Flat

13.18
12.70

12.64

1,000

12.16

Approx.

11.60

11.45
FY23Forecast*(Updated)
Approx. 23.80Mt

800

21.1H

21.2H

22.1H

22.2H

Approx.
12.30

Approx.
12.30

FY23Forecast(Previous)
Approx. 24.60Mt

23.2H
23.1H
23.2H
(Forecast)(Forecast)(Forecast)<Previous><Previous><Updated>*The upstream and hot rolling facilities in Keihin
were closed on September 16th (As previous announced)
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.
23.1H

17

JFE Steel

Financial Forecast for Fiscal Year 2023
FY2022

FY2023(updated)

Unit
1Q

2Q

1H

2H

Full
Year

1Q

2Q

1H

2H

Full
Year

FY2023
Previous
Forecast

Revenuebillion
yen

932.6

986.3

1,918.9

1,962.2

3,881.1

917.2

948.6

1,865.8

1,934.2

3,800.0

3,770.0

Segment
Profitbillion
yen

93.0

55.2

148.2

(1.4)

146.8

68.1

54.7

122.8

77.2

200.0

200.0

ExcludingInventory
Valuationetc.*billionyen(23.0)

55.2

32.2

41.6

73.8

59.1

64.7

123.8

76.2

200.0

225.0

Crude Steel(Standalone)

Mt

6.43

6.21

12.64

11.45

24.10

6.05

6.11

12.16

Approx.
11.60

Approx.
23.80

Approx.
24.60

Crude Steel(Consolidated)

Mt

6.77

6.59

13.37

12.11

25.48

6.38

6.47

12.85

Shipment(Standalone)

Mt

5.54

5.32

10.86

10.88

21.74

5.23

5.42

10.65

Export Ratio
on Value Basis（Standalone）

%

48.5

45.0

46.7

42.2

44.5

44.2

44.2

44.2

Average Sales
Price(Standalone)

000
yen/
ｔ

126.7

136.7

131.6

129.9

130.8

128.5

130.1

129.3

Exchange Rate

¥/$

126.5

136.6

131.6

138.6

135.1

135.8

144.1

139.9

Approx.
150

Approx.
145

Approx.
139

Exchange Rate
(End of Term)

¥/$

136.7

144.8

144.8

133.5

133.5

145.0

149.6

149.6

Approx.
150

Approx.
150

Approx.
140＊Excluding inventory valuation, carry over, one-time structural reform costs and foreign exchange valuation from segment profit

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

18

JFE SteelNo change in JFE Steel’s Segment Profit(FY2023 (Previous Forecast) vs. FY2023(Updated Forecast))（billion yen）

JFE Steel

FY2023

ChangeFY2023

Previous Forecast

Updated Forecast

Segment Profit

200.0

200.0

０.0

Excluding Inventory
Valuation etc.

225.0

200.0

(25.0)

1. Cost+5.0

2. Volumeand Mix(8.0)

3. Sales and
Raw materials
4. Inventory
valuation
5. Others• Crude Steel Production approx.24.60Mt⇒approx.23.80Mt(25.0)• Deterioration due to the slowdown in overseas market
conditions+25.0• Inventory valuation +14.0 (-12.0→+2.0)• Carry over +22.0 (-19.0→+3.0)• Foreign exchange valuation +9.0 (+6.0→+15.0)• one-time structural reform costs -20.0+3.0
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

19

JFE Steel¥53.2Bn. Increase in JFE Steel’s Segment Profit(FY2022 (Actual) vs. FY2023 (Forecast))（billion yen）

FY2022
ActualJFE SteelSegment Profit
Excluding Inventory
Valuation etc.

1. Cost2. Volumeand Mix
3. Sales andRawmaterials
4. Inventory
valuation
5. Others

FY2023
Forecast

Change

146.8

200.0

53.2

73.8

200.0

126.2

+68.0

• Structural reforms effect +20.0• Operational improvement +25.0• Disappearance of blast furnace refurbishment impact +13.0• Disappearance of production reduction impact +10.0＋2.0• Crude Steel Production 24.10Mt⇒approx. 23.80Mt+120.0• Improved spreads due continued sales priceimprovement efforts(73.0)• Inventory valuation -77.0 (+79.0→+2.0)• Carry over +26.0 (-23.0→+3.0)• Foreign exchange valuation -2.0 (+17.0→+15.0)• one-time structural reform costs -20.0(63.8)• Foreign exchange effects on trade -23.0• Depreciation cost -11.0 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 20

¥45.6Bn. Decrease in JFE Steel’s Segment Profit(FY2023.1H vs. FY2023.2H)

JFE Steel（Billion yen）

JFE Steel

FY2023 Forecast

1H Actual

2H Forecast

ChangeFull Year

Segment Profit

122.8

77.2

200.0

(45.6)

Excluding Inventory
Valuation etc.

123.8

76.2

200.0

(47.6)

1. Cost2. Volumeand Mix
3. Sales and
Raw materials
4. Inventory
valuation
5. Others

＋28.0
(3.0)

• Structural reforms effect＋20.0• Operational improvement＋8.0• Crude Steel Production 12.16Mt⇒approx. 11.60Mt(50.0)• Deterioration due to the slowdown in overseas
market conditions＋2.0• Inventory valuation ±0.0 (+1.0→+1.0)• Carry over +37.0 (-17.0→+20.0)• Foreign exchange valuation -15.0 (+15.0→±0.0)• one-time structural reform costs -20.0(22.6)• Foreign exchange effects on trade -11.0 etc.
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

21

JFE Steel

Outlook on spread for the second half of FY2023


In the second half of FY2023, the spread, especially for export is expected to deterioratesignificantly due to the rise in the coking coal market and the slump in overseas markets.

Since the first half of FY2024, spreads expect to improve by passing on unreflected coking coal
costs, pursuing sustainable price levels, and raising the ratio of high value-added products.
With the recovery of overseas market conditions, further upside can be expected.
Outlook on Spread

HR coil Spread（Chinese spot basis）

400

200

0

Metal Spread＜Previous
announcement ＞
1H→2H Diff.±0（$/ｔ）（Billion yen/6 month）＜Updatedannouncement＞+12.0＜Since the
1st half of FY
2024＞(50.0)＋72.0

Previous

UpdatedFY22 Actual(6M base)＜ Approach to overseas market conditions in the 2nd half ＞
 Previous：Improve steel supply & demand and market
conditions since the beginning of the year
 Updated： Reflected the recent market downturn. Fullscale recovery is expected to be delayed beyond next
fiscal year

FY23 forecast in
previousannouncement

1st half FY23 2nd half FY23
forecast
actualIn the 1st half actual, increased by ¥12 billion from theprevious announcement due to improvement in sales price,etc.
Expect a decrease of ¥50 billion from the 1st half to the
2nd half, taking into account the effects of weak overseas
market conditions and rising coking coal prices. (¥38
billion decrease against the previous announcement of the
2nd half).
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

22

JFE SteelPaths toward achieving the Seventh Medium-Term Plan In FY2023, segment profit excluding Inventory Valuation etc. in the steel business is expected
to be 200 billion yen.
 In FY2024, due to steadily implementing various measures, including structural reforms, sales
price improvements, and an increase in the ratio of high-value-added products, we aim toachieve 260 billion yen or more.
・Product-mix enhancements (Electrical steel sheet etc.)
・Improvements in sales prices by pursuing sustainable price levels
・Expansion of overseas solution business, etc.

Initiatives to achieve
mid-term plan targets,
starting in
FY2023(billion yen)

＋α
42.0

FY22 -> FY23
・Spread＋120.0
・Cost reduction＋68.0
etc.
(including disappearing
transient costs)

200.0

＋β
Recovery of
the steel market

260.0

Including 25 billion
yen in Structuralreform effectOr more73.8
FY2022
22年度
22年度

FY2023
23年度

Inventory(Excluding
Inventory (Excluding(評価差除き)(評価差除き)Valuation etc.)
Valuation etc.)

コスト削減
Cost

Others
その他施策

市況
MarketFY202424年度目標TargetCopyright © 2023 JFE Holdings, Inc. All Rights Reserved.

23

JFE Engineering

Financial Forecast for Fiscal Year 2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

24

Financial Forecast for Fiscal Year 2023

JFE Engineering Current Business Environment/Overview of Financial Status
Annual segment profit is expected to be ¥25 billion. (As previous forecast)＜Year-on-year＞
・ Orders: Expect to increase in the field of “Waste to Resource” and “Carbon neutral”.
・ Segment profit: Expect to increase due to increased sales by the progress of ordered
projects and price reflecting the impact of soaring prices of materials and equipment.
 Financial Forecast

1H

Full
Year

FY2023
Forecast
Full
1H
Year

1H

Orders

286.0

564.9

269.7

580.0

(16.3)

Revenue

219.0

512.5

248.4

550.0

Segment
Profit

(3.9)

13.4

8.7

25.0

（billion yen）

FY2022 Actual

ChangeFull
Year

FY2023 Forecast(Previous)

1H

Full
Year

15.1

280.0

580.0

29.4

37.5

230.0

550.0

12.6

11.6

5.0

25.0

From previous forecast＜1H segment profit +37＞ Increased revenue, etc.
＜Full year segment profit ±0＞ As previous forecast.
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

25

JFE Shoji

Financial Forecast for Fiscal Year 2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

26

JFE Shoji

Financial Forecast for Fiscal Year 2023
 Current Business Environment/Overview of Financial Status
Annual segment profit is expected to be ¥48 billion. (As previous forecast)＜Year-on-year＞
 Despite the recovery in automobile production, profit is expected to decline due tothe slow recovery of the Chinese economy and the narrowing of domestic andinternational spreads, particularly in North America.
(Down ¥17.1 bn. from the previous year and up ¥8.0 bn. from the mid-term plan.) Financial Forecast（billion yen）

FY2022 Actual
1H

Revenue
Segment
ProfitFull
Year

FY2023
Forecast
1H

Full
Year

FY2023 Forecast(Previous)

Change
1H

Full
Year

750.2 1,514.1

742.0 1,580.0

(8.2)

65.9

40.6

26.8

(13.8)(17.1)

65.1

48.0

1H

Full
Year

780.0 1,620.0
26.0

48.0

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

27

Topics

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

28

JFE Steel

Shutdown of upstream facilities in Keihin district The upstream and hot rolling facilities in Keihin were closed on September 16 th.
 By FY2024, a fixed cost reduction of ¥45 billion can be realized, which significantly
lower the break-even point.
 Utilizing slabs and coils from other districts, Keihin will be a new urban steel plant that
focuses on high-value-added products such as steel plates for building (HBLTM) andhot-dip galvanized steel sheets with excellent corrosion resistance (ECOGAL NeoTM).
FY21
Shutdown of
Tin Mills in
Chiba
Consolidationin Fukuyama

Refit of Blast
Furnace
Shutdown of
upstream andhot rolling
facilities in
KeihinDevelopment
plans for theland of Keihin

FY22

FY23

FY24～

Fukuyama

Shutdown(Aug. 2022)（No.2 Tandem Mill, No.4 CAL, TFL)

Kurashiki

Kurashiki
Chiba Refit
Refit
No.6 BF
No.4 BF(Sep.22~Jan.23)(~Dec.2021)

Shutdown(Sep. 16, 2023)
Development

Production system after structural reform
Slabs
Coils

Keihin

Coils

Chiba

Steel plates, Surface treated steel sheets,
Welded pipes, etc.

Promote automation of logistics of materials
received from other districts by new DX technology.
Remote and automatedAutonomous trailercoastal cranes

To Sell

Selection of a Businessplans
Ohgimachi
Partner for the northin
Ohgishima
landside of the north(Sep. 7,
（Dec.
district in the MinamiWatarida Area
2023)
2024）

（Mar. 2023）

Under research and development

Under demonstration

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

29

JFE-HDLand reuse project in Keihin district（”OHGISHIMA2050” released on 7 th Sep. 2023 ） Comprehensive land management will be engaged that appropriately combines "sale”,"lease" and "business use". Proactive introduction of public funds will be discussed with
the national and city governments, and continuous development will be promoted.
 About 1/4 of the 400ha area subject to land use conversion, including the lead area, isunder consideration for publication of an income and expenditure plan in FY2024.
【Zoning of Ohgishima (about 222ha)】【Major events】
Lead Area

FY2023・”OHGISHIMA2050” release (7thSep.)
・Shutdown of upstream facilities
in Keihin (16th Sep.)

FY2024・Delivery of Ohgimachi (about
21ha)(Capital gain: about ¥45 billion)

FY2027

・Opening of Minamiwatarida
area.

FY2028・A portion of the land in the
Lead Area is slated to become
available.

Leveraging deep
water berths to formhydrogen supply
bases and lead theway in carbon
neutrality and land
use conversion for
the entire area.

Roadside・Co-Creation Area
A "share-type urban space," a lush green common space, is arranged as the・Roadside and Co-Creation
Area will be steadily developed.
FY2050・Completion

central axis, and a "next-generation industrial and complex development zone"
is arranged on both sides to integrate next-generation industries and facilities.

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

30

JFE Steel

Adoption status of green steel ““

JGreeXTM has been first adopted for buildings andtransformers as well as for ships.
• With eight domestic shipping companies, we are
the first in the world to build a model that willbear CO2 reduction cost throughout the entire
supply chain.
• Sales volume: about 14,000t

• First adopted for the new construction of“(tentative name) Suidobashi PREX”.
• Contributing to CO2 reduction in manufacturing
materials for new buildings.
• Sales volume: about 200t
(tentative) Suidobashi PREX
Owner

SUMITOMOCORPORATION

Construction

Kumagai Gumi
Co.,Ltd. (planed)

Steel-framed
10-story building
Release on 2nd Oct. 2023

Building size
Release on 6th Jun. 2023



Release on 26th Oct. 2023

• Grain-oriented electrical steel sheets are adopted for the first time for transformers manufactured in Europe.
Contributing to the reduction of CO2 emissions by supplying high-grade grain-oriented electrical steel sheetsthat enable the manufacture of high-efficiency transformers.
• Sales volume: about 300t
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

31

JFE-HD

Fundraising through public offering and CB issuanceIn September 2023, we raised a total of 204.5 billion yen through a public offering and
CB issuance (Issuance of new shares, disposal of treasury shares, and issuance of
convertible bonds) in order to flexibly and reliably implement the GX strategy and continue
sustainable profit growth.
With this financing, we will strengthen our financial base to support the 1 trillion yen scale
investments toward 2030 for decarbonization of our steel manufacturing process.

Type[Issuance of newshares]25 million shares[Disposal ofTreasury Stock]

Amountraised114.5
billionyen

30 million shares[Issuance ofConvertible Bonds]
Maturity of 2028
Conversion Price:¥3,041 *UP rate 39.98%

90.0
billionyen

Use of funds(Kurashiki District)Enhancement of manufacturing facilities for
non-oriented electromagnetic steel sheets*Period I: First half of FY 2024, Period II: FY 2026

AmountApprox.
95.0 billion yen(India)Investment in the establishment of a joint
venture company for the manufacture and saleof directional electrical steel sheets

Approx.
15.0 billion yen(Chiba District)
Introduction of electric furnaces for stainlesssteel

Approx.
15.0 billion yen

Capital investment, business investment, R &D expenses, etc. necessary for decarbonizing
the steel manufacturing process

Approx.
75.0 billion yen* At the time of determination of the condition (September 11, 2023). 2,973.7 yen after adjustingfor the interim dividend for fiscal 2023.

Aim
Strengthen
profitability bycapturing risingdemand for electricalsteel sheets

Establish a strong
financial foundation
to support the swift
implementation of
the GX strategy

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

32

JFE-HD

Published JFE Group Report and Sustainability Report
JFE Group Report 2023 and Sustainability report has been publishedJFE Group Report: Published on 26th Sep. 2023
Sustainability Report: Published on 28th Sep. 2023

1. Strategy to Create Value••••

Message from the CEO and CFO
Material Issues of Corporate Management and KPIs
Progress on the Seventh Medium-term Business Plan (FY2021–2024)
Special Feature (Electrical Steel Strategy・Land Utilization in Keihin)

2. Initiatives to Create Value• Business Model and Strategy of JFE Group• Helping to Resolve Issues Related to Climate Change

3. Management Foundation that Supports Growth• Dialogue with Outside Executives, Corporate Governance etc.

https://www.jfeholdings.co.jp/investor/
library/groupreport/index.html

1. JFE Group Vision• Value of Steel• Progress on 7th Mid-term Business Plan
• Material Business Issues, Achievement of KPIs

English version iscoming soon

2. Sustainability Management
3. Initiatives for ESG Issues, ESG Data

• Environment: Climate change issues, environmentally conscious processes and products,
biodiversity etc.
• Social: Occupational safety measures, diversity & inclusion, respect for human rights etc.
• Governance: Corporate governance, risk management etc.

Carbon Neutrality Strategy Briefing is held on 8 th Nov. 2023
regarding climate change issues

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

33

Appendix(1)Profit/Loss Analysis

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

34

JFE-HD

Main Financial Data
JAAP

IFRS
FY15

FY16

FY17

FY18

FY18

FY19

FY20

FY21

FY22

FY23

Forcast(bn. Yen, times)(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

290.0

EBITDA

254.4

279.9

388.8

405.9

EBITDA ＊1

428.2

269.4

223.4

668.7

505.4

570.0

ROS

1.9%

2.6%

5.9%

5.6％

ROS ＊2

6.0%

1.0%

-0.4%

9.5%

4.5%

5.4%

ROE

1.8%

3.7%

7.6%

8.3％

ROE ＊3

8.6％-11.1%

-1.3%

15.7%

7.9%

8.3%

ROA

1.7%

2.3%

5.2%

5.1％

ROA ＊4

5.0％

0.8%

-0.3%

8.4%

4.4%

5.2%

Debt Outstanding

1,379

1,375

1,331

1,450

Interest-bearing debt
outstanding

1,524

1,814

1,806

1,849

1,863

1,900

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

x3.3

56.9%

51.4%

58.1%

62.0％

D/E Ratio ＊6

68.2％

96.4%

93.2%

80.8%

67.8%

60.9%

58

118

251

285

284

-343

-38

500

281

311

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%

32.1%

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

35

JFE-HD

Main Performance & Profitability Targets and Results
The 7th
mid-termbusinessplan
FY2024FY2021
ActualFY2022
ActualFY2023
Forecast

Consolidated
Operating companies

Business Profit[Excluding Inventory Valuation etc.]¥320.0bn.

¥ 416.4Bn.

¥ 235.8bn.

¥290.0bn.

Profit attributable to owners of
the parent¥ 220.0bn.

¥ 288.0bn.

¥162.6bn.

¥190.0bn.

10%

15.7%

7.9%

8.3%

10,000yen/t

14,000yen/t[6,000yen/t]

7,000yen/t[3,000yen/t]

10,000yen/t¥ 230.0bn.

¥323.7bn.

¥146.8bn.

¥200.0bn.

ROE
Profit per ton*
SteelBusiness[Excluding Inventory Valuation etc.]<

Segment profit[Excluding Inventory Valuation etc.][¥2,224bn.][¥129.7bn.][¥162.8bn.][¥73.8bn.][¥290.0bn.][10,000yen/t][¥200.0bn.]

Engineering
Business

Segment profit¥35.0bn.

¥26.0bn.

¥13.4bn.

¥25.0bn.

Trading
Business

Segment profit¥40.0bn.

¥55.9bn.

¥65.1bn.

¥48.0bn.

* Steel business profit per ton(consolidated segment profit / non-consolidated sales volume)
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

36

JFE-HDCash Flow Improvements, Debt/EBITDA Ratio
 At the end of FY2023, the Debt/EBITDA ratio is expected to be x3.3.
FY2023（billion yen）

Consolidated Cash Flow Forecast

Cash-in
Net Profit

190.0
Depreciation andAmortization

Cash-out
CAPEX &
Investments

440.0

CapitalIncrease
Debt1)2)

1,600

Debt/EBITDA Ratio(Right Axis)

1,400
1,200
1,000

600
400
Dividend Payment

49.0

32.0
Working Capital
114.5 etc.
141.6
37.1

（billion yen）

Target of 7th mid-termbusiness plan
Approx. 3x

3.7

800

280.0

Asset Compression

Progress of Debt/EBITDA Ratio

23.0

Cash and Deposits Increase1) Debt includes CB ¥90 billion.
2) Debt is expected to increase by ¥37.1 billion. from FY2022 to FY2023.
It includes about ¥30 billion. increase by foreign currency translation
impact due to the yen depreciation.

505.4

3.3
570.0

EBITDA (Left Axis)

200

9.0
7.0
5.0
3.0
1.0
(1.0)
(3.0)
(5.0)

Debt
0

1,862.9

1,900.0

Net Debt

1,743.5

1,757.6

FY2022(7.0)

FY2023(forecast) EBITDA＝Business profit＋Depreciation and Amortization
 Debt/EBITDA Ratio＝Interest-bearing debt outstanding/EBITDA
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

37

JFE Steel

Financial Results for 1H of Fiscal Year 2023
FY2022

FY2021Unit

FY2023

1Q

2Q

3Q

4Q

Full
Year

1Q

2Q

3Q

4Q

Full
Year

1Q

2Q

Revenuebillion
yen

638.5

771.9

832.8

930.2

3,173.4

932.6

986.3

986.9

975.3

3,881.1

917.2

948.6

Segment
Profitbillion
yen

69.7

88.8

93.5

71.7

323.7

93.0

55.2

21.8

(23.2)

146.8

68.1

54.7

ExcludingInventory
Valuationetc.*billion
yen

25.7

42.8

(3.5)

64.7

129.7

(23.0)

55.2

22.8

18.8

73.8

59.1

64.7

Crude Steel(Standalone)

Mt

6.25

6.45

6.49

6.69

25.88

6.43

6.21

5.48

5.97

24.10

6.05

6.11

Crude Steel(Consolidated)

Mt

6.59

6.80

6.85

7.02

27.26

6.77

6.59

5.81

6.29

25.48

6.38

6.47

Shipment(Standalone)

Mt

5.26

5.56

5.63

5.92

22.38

5.54

5.32

5.25

5.64

21.74

5.23

5.42

Export Ratio
on Value Basis（Standalone）

%

43.2

49.3

45.9

43.6

45.5

48.5

45.0

41.0

43.6

44.5

44.2

44.2

Average
Sales Price(Standalone)

000
yen/
ｔ

87.6

101.0

107.6

116.7

103.7

126.7

136.7

136.3

124.0

130.8

128.5

130.1

Exchange
Rate

¥/$

109.8

110.0

113.1

115.3

112.1

126.5

136.6

144.0

133.2

135.1

135.8

144.1

132.7

133.5

133.5

145.0

149.6

Exchange
Rate
110.6
111.9
115.0
122.4
122.4
136.7
144.8
¥/$
(End ofTerm)＊Excluding inventory valuation, carry over and foreign exchange valuation from segment profit

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

38

JFE Steel¥13.4bn. Decrease in JFE Steel’s Segment Profit(FY2023.1Q (Actual) vs. FY2023.2Q (Actual))

JFE Steel

FY2023
1Q(Actual)

2Q(Actual)

1H(Actual)

Change(billion yen)Segment Profit

68.1

54.7

122.8

(13.4)

Excluding Inventory
Valuation etc.

59.1

64.7

123.8

＋5.6

1. Cost＋5.0

2. Volumeand Mix＋2.0

3. Sales and
Raw materials+12.0

4. Inventory
valuation
5. Others• Crude Steel Production 6.05Mt⇒6.11Mt(19.0)• Inventory valuation +11.0 (-5.0+6.0)• Carry over-27.0 (+5.0→-22.0)• Foreign exchange valuation-3.0 (+9.0→+6.0)(13.4)• Group companies -6.0
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

39

JFE Steel¥124.2bn. Increase in JFE Steel’s Segment Profit(FY2022.2H (Actual) vs. FY2023.1H (Actual))

JFE Steel

FY20222H(Actual)

FY2023
1H(Actual)

Change(billion yen)Segment Profit

(1.4)

122.8

124.2

Excluding Inventory
Valuation etc.

41.6

123.8

82.2

1. Cost＋25.0• Disappearance of blast furnace refurbishment impact
and production reduction impact

2. Volumeand Mix＋13.0• Crude Steel Production 11.45Mt⇒12.16Mt

3. Sales and
Raw materials＋27.0• Improved spreads due continued sales priceimprovement efforts＋42.0• Inventory valuation +4.0 (-3.0→+1.0)• Carry over+11.0 (-28.0→-17.0)• Foreign exchange valuation +27.0 (-12.0→+15.0)＋17.2

・Group companies +16.0

4. Inventory
valuation
5. Others

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

40

Appendix(2)Business Environmental
Indicators, etc.

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

41

Domestic
Market Environment
5,000

JFE Steel

Combined Inventories of HR,
CR and Coated Steel Sheet（month）

（kt）

Maker

Whole Saler

Coil Center

5

Inventory Ratio(Right axis)

4,000

4

3,000

3

2,000

2
Change

2018

2019

2020

2021

2022

Sep

Jul

May

Mar

Jan

Nov

Sep

Jul

1

May

Mar

3.18
Jan

2.73

Nov

4,466

Sep

3,932

Jul

Aug,2022

May

Jul,2023

Mar

Jan

Nov

Sep

Sep

-0.42
Jul

+0.03

2.76
Jul

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

0

（month）

May

Inventory Ratio

May

4,001

（kt）

Mar

Inventories

Nov

1,000

From
previousyear-465(-10.4%)Jan

Aug,2023

Frompreviousmonth+69(+1.8%)

2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

042

Domestic
Market Environment
Inventories of Plate (Plate Shear)（kt）

Inventories

500

Inventories of Plate (Plate Shear)and Wide Flange Shapes

3.5

Inventories

250（month）
3.5

Shipment
Inventory Ratio(Right axis)

450

3.0

400

2.5

350

200

3.0

150

2.5

100

2.0

2.0

300

1.5

Inventory ratio

2.7

（kt）

(-20.4%)

+0.1

-0.5

2.6

3.2

Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul

（Month）(-1.3%)

2018

2019

2020

2021

2022

2023

Inventories

ChangeAug, Sep,
Sep,
From
From
2023 previous previous 2023 2022
month
year
+8.7
+2.7
193.8
191.1 185.1

Inventory ratio

2.79

50
1.0
（kt）

0.5

0

（Month）

2018

1.5(+1.4%) (+4.7%)

-0.13

+0.10

2.92

2.69

Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul

Inventories

ChangeJul, Aug,
Aug,
From
From
2023 previous previous 2023 2022
month
year
-97
-5
378
383
475

250

200

Inventories of Wide Flange Shapes（month） （kt）

Inventory Ratio(Right axis)

JFE Steel

2019

2020

2021

2022

2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

1.0

43

JFE Steel

Domestic
Trend of Import Steel (Ordinary Steel)Market Environment
（kt）
600

S.Korea

China

TaiwanOthers

500

400

300

200

Aug,2023

100

0Import Steel
（kt）

416

From
previous
month

From
previousyear(+6.3%)(+7.1%)＋25＋27

Jul,2023

Aug,2022

392

389

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
2018

2019

2020

2021

2022

2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

44

Domestic
Market Environment

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

120
110
100
90
80
70
60

2016

2017

2018

2019

2020

2021

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

2022

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

2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

45

Overseas
Market Environment
Export（Left axis）（Mt）

JFE Steel

Crude Steel & Im/Export, China

Import（Left axis）

Crude steel（Right axis）

（Mt）

120

9
8

100
7
80

6
5

60
4

2018

2019

2020

From
Apr,-Sep,
2022

20

+0.2%

2021

2022

Sep

Jul

May

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

+24.5%
Nov

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

Nov

Sep

Jul

47.5

May

-2.7%

Mar

8.1

Jan

Export（Mt）
Nov

533.2

Sep

-5.0%

Jul

82.1

May

Crude Steel（Mt）

Mar

0

Jan

1

Apr,-Sep,
2023

Sep

2

From
Previous
month

May

Sep,2023

40

Jul

3

0

2023

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

46

JFE Steel

Overseas
Market Environment

Crude Steel & Im/Export, China

（Mt）

30.0

Bar

Rod & Wire

Plate

HR

CR

Change by Previous year(%)

100.0%
50.0%

25.0

0.0%
20.0

-50.0%-100.0%15.0-150.0%

10.0
Sep,
2023

5.0

10.8

From
PreviousMonth-1.2(-9.8%)

From
PreviousYear+0.4(+3.5%)

Jul,
2023

Sep,
2022

12.0

10.4

-200.0%-250.0%

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
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep

0.0

Inventories（Mt）

Change

2018

2019

2020

2021

2022

2023

-300.0%

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

47

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

200

Metal Spread

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

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

48

600
2023.102023.04

2022.102022.04

2021.102021.42020.102020.42019.102019.42018.102018.42017.102017.42016.1002021.102021.42020.102020.42019.102019.42018.102018.42017.102023.1052023.10102023.0420

2023.0430

2022.1035

2022.1040

2022.04(US$/lb) Mo

2022.04

2021.101,000

2021.415

2020.101,400

2020.425

2019.10

1,800

2019.42,200

2018.102,600

2018.4(US$/t)FeMn
1,000
2017.41102017.10160

2016.10210

2017.4260

2016.4(US$/t)2016.102023.102023.04

2022.102022.04

2021.102021.42020.102020.42019.102019.42018.102018.42017.102017.42016.10FeCr

2016.460
2016.4(￠/lb)

2016.4

JFE Steel

Raw Materials Trend of Sub Material’s Market Price
Zn

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

49

JFE SteelRaw 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（円/ｔ）
180,000(crude oil : $/bbl)

130

140,000

110

120,000

2023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.7

Crude oil, Bunker oil

LNG

160,000((bunker oil: $/t))

1200

WTI crude oil（left axis）
bunker(Japan VLSFO (Right axis)
bunker(Japan 380CST) (Right axis)

1000
800

90

2023.72023.12022.72022.12021.72021.102020.7102020.1200
2019.730
2019.1400

2018.750

2018.12023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.72016.140,000600

2017.760,00070

2017.180,0002016.7100,000

20,0002016.12023.72023.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.70
2016.1

10,00010,0002016.170,000

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

50

JFE Engineering

Orders by Business Field（billion yen）

Business FY2022 FY2023
ChangeActual Outlook
Field
Waste
to
Resource

216.9 238.0

21.1

CarbonNeutral57.6 80.0

22.4

Combined
Utility
Service21.1 17.0 (4.1)

Main orders received in 1H of FY2023★・・・New projects received in 2Q of FY2023

Construction works of domestic waste treatment facility [★Mie]
Renewal works of domestic waste treatment facility [Saitama]

Reinforcement work of cable tunnel for domestic
telecommunications facilities [Osaka]
Construction works of bridge [★TOKAI-KANJO Expressway [Gifu],
Core★RINKO Expressway [Kagoshima]]
Infra269.3 245.0 (24.3)
structure
Reconstruction works of bridge[★Metropolitan Expressway [Tokyo]]Container crane [★Oi Pier [Tokyo]]
Total

564.9 580.0

15.1
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

51

Appendix(3)The 7th Medium-TermBusiness Plan

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

52

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

53

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

54

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

55

JFE-HDJFE Group’s activities for Carbon neautrality
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 © 2023 JFE Holdings, Inc. All Rights Reserved.

56

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

57

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）© 2023 JFE Holdings, Inc. All Rights Reserved.

（current direct reduction ironmaking basis）

58

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

59
JMU: Japan Marine United Corporation(equitymethodaffiliate)
Copyright © 2023
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 © 2023 JFE Holdings, Inc. All Rights Reserved.

60

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 **Self-supporting energy supply line: Direct energy supply line from power generation plants to the connection
points © 2023 JFE Holdings,
Storagebattery
Copyright
Inc. All
Rights Reserved.

61

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

62

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%)63
Copyright © 2023 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 © 2023 JFE Holdings, Inc. All Rights Reserved.

64

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

65

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

66

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

67

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

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

68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/
69
4. Core infrastructure：infrastructure business to establish social foundation such as bridge andCopyrightpipeline.
© 2023 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 © 2023 JFE Holdings, Inc. All Rights Reserved.

70

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
71© 2023 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 © 2023 JFE Holdings, Inc. All Rights Reserved.

72

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 © 2023 JFE Holdings, Inc. All Rights Reserved.

73

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 /Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.
non-consolidated sales volume)74

Appendix(4)JFE Steel Carbon Neutral
Strategy Briefing

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

75

JFE Steel’s Transition to Low-carbon Processes

2024

Develop ultra-innovativetechnologies for carbon
neutrality

Transition Period

18% less
CO2

Use EAFs
Expand use of DRI

Small-scale
tests

Mid-scaledemonstration tests

Carbonrecycling
blast
furnace

Directreduction

2030(GI Use of funds)+CCU

30% or more
CO2

High-grade
HBI

Innovation Period

EAF ironsourceCarbonneutrality

Adopt optimal processes
based on external conditions

Develop large-scale furnaces

Use inexisting
blast
furnaces

2050

Establish & implement ultrainnovative technologies

Roll out based on hydrogen supply volume● LNG injection● HBI● Oxygen blast
furnaces● Low-grade ore● Carbon recycling
technology

×Transition to carbon-free hydrogenα×

Direct-reduced iron made withβblast furnace-grade ore (Fe<65%)

EAF
Use ofscrap
External
conditions• Carbon-freeelectricity• Carbon-freehydrogen• CCUS

Upgrade Sendai
EAF
DRP
technology
Double-slag
reﬁning process

Large, high-efficiency
EAF (possibly inKurashiki District)
Expand use of scrap

Transition to carbon-free electricity

×

BurnerlesstechnologyγStore CO2 inslag/concrete
CO2

Green steel

Sustainable market based on
actual environmental value

CO2

Carbon-free electricity Carbon-free hydrogen

CO2

CCS

Pursue multilayered technology development, via GI Fund projects, etc., to discover the mostproven technologies and then achieve carbon neutrality by deploying the most optimized
configuration of green steelmaking processes.
Copyright © 2022 JFE Steel Corporation. 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
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

77

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
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

78

Transition to Low-carbon Processes▶ Continue to develop ultra-innovative technologies for decarbonized steel processes by 2030
▶ Increasingly use low-carbon technologies to cut CO2 by 30% or more by FY2030
Energy savings andhigh efficiency

Low-carbon feedstock &fuel

Low-carbon processes

Upgrade to high-efficiency cokeovens

Expand use of scrap in converters
Use direct-reduced iron (HBI)

Upgrade existing EAFs

Fukuyama District (2025)

All districts (under way)

Sendai Works (2024)

Securing Scrap and HBI
Reinforcing storage depots

Introduce large, high-efficiency
EAFs

All districts (under way)

Kurashiki District (2027-2030)

Bolster LNG supply network

Use ferro-coke for commercial
production

Improve efficiency of powerdemand facilities(Electrify blast-furnace blowers, raise
efficiency of oxygen plants, etc.)

All districts (under way)

Leverage AI & DS (companywide
CPS, etc.) for energy savings
All districts (under way)

Fukuyama District (TBD)

 To reduce CO2 emissions by 30% or more by 2030, 1 trillion yen in capital investment will
be needed for low-carbon initiatives (large electric furnaces, ferro coke, scrap andreduced iron, LNG, etc.).
 A market that reflects the actual environmental value of green steel must be created tosupport capital investment in decarbonization technologies.
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

79Development Project Supported by Green Innovation Fund
▶ This project, targeted at using hydrogen in ironmaking and commissioned and subsidized by NEDO*,
was selected in December 2021 to receive support from the Green Innovation Fund.
▶ The fund is helping to accelerate the development of technologies for achieving carbon neutrality.
▶ Formed a consortium with three steel companies and JRCM** and held the first meeting of theHydrogen Iron and Steel Committee in June 2022.
*New Energy and Industrial Technology Development Organization

Carbon-recycling blast furnace

Low-grade iron ore

CO2CarbonrecyclingH2

By-product gas(use on-site, circulate
through reduction furnace,etc.)

Large, high-efficiency EAF
Electrode(-)

H2

Methanation facility
Methane CH4 (CNreductant)
O2

Build a small test blast furnace(150m3) in Chiba District
Prefecture to develop a process
for converting CO2 by-productinto methane for reuse as a
reductant, aiming to cut CO2
emissions by 50% or more.

BurnerPreheating of
reduced iron

Cold iron source
preheated byexhaust gas

CCUS
Generateelectricity
orCarbon-freeelectricity

Reduction
furnace

Summary

Direct-reduction steelmaking

Coke C

Blast
furnace

Development
project

Sintered ore
Fe2O3**Japan Research and Development Center for Metals

Slag

Melting

DRI

EAF

Build a small test reduction furnace in
Chiba District Prefecture to develop a
direct-reduction ironmaking process
for reduced iron that uses hydrogen to
remove oxygen from low-grade ironore, aiming to cut CO2 emissions by
50% or more vs. blast furnaces.

Molten steel
agitation coil

Moltensteel
Bottom electrode(+)

Build a small test EAF in Chiba
District Prefecture to develop a highquality steel manufacturing method
incorporating high-efficiency meltingof scrap and reduced iron, reductionof impurities, etc.

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

80

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

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

81

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.
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

82

Initiatives for Collaborating with Society••

Realizing carbon-neutral steelmaking is a top priority for JFE Steel, but generating
environmental value will involve large cost increases, so there are limits on what a single
company can do.
Mechanisms are needed so that society, as the beneficiary of green steel, helps to cover the
associated cost increases through government support, collaborative initiatives, etc.

Huge R&D and facility installation costs● Achieving CN by 2050 will be a major technological challenge requiring huge R&D outlays.
● Transitioning steelworks to carbon-neutral processes will require even greater capital investment.
● Long-term government support will be needed to shoulder the financial costs of achieving carbon neutrality.

Deliver environmental value and create markets during transition● Government support is needed for capital investment in low-carbon technologies by 2030
● A mechanism is needed to create a market where costs commensurate with green steel’s environmental value canbe shared with customers and society

Develop infrastructure for carbon-neutral steelmaking and fuel inter-company collaboration● Develop infrastructure for the low-cost, stable, large-scale supply of carbon-free hydrogen and electricity needed
for carbon-neutral steelmaking● Develop an execution platform for CCUS and green infrastructure implementation through collaboration withindustrial complexes, corporations, etc.

Economic policies targeting green-transformation investment and international competitiveness● Ensure international competitiveness of industrial electricity prices● Introduce tax system that encourages implementation of ultra-innovative technologies, such as the abolition ofdepreciable asset taxation and the avoidance of a carbon tax before the establishment of decarbonizing technologies● Carbon Border Adjustment Measure (CBAM) should be consistent with WTO rules. Ensure a level playing field incooperation with other countries
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

83

Copyright © 2023 JFE Holdings, Inc. All Rights Reserved84