JFE Holdings, Inc.
Q3 Financial Results Briefing for the Fiscal Year Ending March 2021
February 9, 2021

Presentation

Moderator: Ladies and gentlemen, thank you for waiting. We will now begin the Investor Meeting of JFE
Holdings, Inc.
First, Representative Director and Executive Vice President, Terahata will give his greetings.
Terahata: This is Terahata, Executive Vice President of JFE Holdings.
Thank you for joining us in our Investor Meeting despite the ongoing spread of COVID-19 and your busy
schedules. We would like to take this opportunity to thank you for your continued interest in our company.
In the past, we held these Investor Meetings over the phone. But, starting from this time, we will be holding
them by web conference.
Senior Vice President Tanaka will present the Q3 results and financial forecast announced today. We will
accept your questions later.
Tanaka: This is Tanaka.
We posted the presentation material for today’s Investor Meeting on our website. I’ll be explaining the detailsof the material.
I will skip the table of contents and start from page four. I will start with the Q3 results of JFE Group.

1Please see page four. Here are the financial highlights for Q3 of FY2020.
Since the latter half of the first half, there has been a recovery of steel demand and steel prices. We also
implemented efforts to improve profitability. As a result, business profit for Q3 alone from October toDecember was JPY53.1 billion.
The figure for the cumulative period from April to December is shown on the right. Revenue was JPY2,318.4
billion, down 17% YoY.
As I stated, business profit was in the black in Q3, but the loss in the first half was sizable. We posted a businessloss of JPY61.1 billion over the cumulative period.
The segment loss was JPY70.6 billion and the loss attributable to owners of parent was JPY69.6 billion for the
cumulative period up to Q3. Compared to the same period last year, the profit/loss items have deteriorated
by around JPY100 billion.

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Next, on page five, we’ll look at the breakdown by segment.
Total revenue decreased by JPY470.0 billion, mainly due to the decline in sales volume stemming from a sharp
reduction in activities by demand industries and the drop in prices in the first half in the Steel Business andTrading Business.
On the other hand, the segment loss was JPY70.6 billion over the cumulative period from April to December.
In the Steel Business, we posted a profit of JPY34.3 billion in Q3, but the cumulative loss was JPY101.9 billion.
On the other hand, in the Engineering Business segment profit was JPY19.6 billion, which is roughly on parwith the year-earlier level.
In the Trading Business, segment profit was JPY13.7 billion, down JPY7.5 billion compared to the same period
last year. However, if you look at Q3 alone from October to December, profit has recovered to a level almost
on par with the previous year.

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Next, I will go over the financial forecast for the full year.
Please see page seven.
Demand has recovered even more in the Steel Business in addition to a sharp improvement in market prices.
Profitability is improving in all segments, including the Engineering Business and Trading Business. As a result,
we upwardly revise our business profit or loss forecast to a business loss of JPY32 billion, which is an
improvement of JPY58 billion from the previously announced forecast.
We forecast revenue of JPY3,240 billion, an increase of JPY70 billion from the previous announcement. We
forecast a segment loss of JPY45 billion, an improvement of JPY60 billion from the previous announcement.
We forecast a loss attributable to owners of parent of JPY38 billion, an improvement of JPY62 billion from theprevious announcement. We have included JPY22 billion in gains on exceptional items in the line between
segment profit and profit attributable to owners of parent.
We forecast JPY22 billion on roughly JPY28 billion from gains on sale of land at JFE Engineering, offset byroughly JPY6 billion in impairment losses on bringing old equipment offline due to the renewal at JFE Steeletc. and other equipment, both of which are schedule to be recorded in Q4.

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Please see the next page for the breakdown of our forecast by segment.
I mentioned that we upwardly revised our revenue forecast by JPY70 billion. As you can see here, that breaks
down as JPY60 billion in Steel and JPY10 billion in Trading.
We upwardly revised segment profit by JPY60 billion, which breaks down as JPY55 billion in Steel, JPY1 billion
in Engineering, and JPY4 billion in Trading.

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Next, here is a comparison of the forecast with the previous year’s results. This is on page nine.
The forecast shown here is the same as what I showed earlier. Compared to the previous year, we expect
business profit to deteriorate by roughly JPY70 billion, despite the significant upward revision this time.
Even though we forecast a loss attributable to owners of parent of JPY38 billion, this is an improvement of
JPY160 billion YoY, due to the recording of major impairment losses in the previous fiscal year.

6This is a table that breaks down the previous page by segment, but I will omit an explanation for this page.

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Next, please see page 11. These are the measures we are taking to maintain financial strength and improve
profit.
We plan to compress Group-wide assets by a cumulative total of JPY200 billion from FY2019 through measures
including the sales of cross-holding shares and land.
Last time, we announced a target of JPY170 billion, meaning that we added an additional JPY30 billion thistime. The addition comes primarily from the sales of land at JFE Engineering, which I mentioned earlier.
We already completed the compression of JPY155 billion, or roughly JPY160 billion as of the end of December
last year, as shown on the right side. We expect this figure to go up to JPY200 billion over the cumulative
period up to Q4.
Furthermore, if you look at the bottom half of the page, it says that we aim to compress JPY130 billion on adecision-making basis in domestic CapEx and an additional JPY100 billion in cost reductions including thevariable cost increase amid production cuts in the Steel Business.
Additionally, we are working to improve the selling price by continuously reflecting raw material costs andvarious commodity prices into the selling price. Moreover, we are working to rebuild our pricing framework
based on the appropriate product value and added value.

8On page 12, we summarize the status of cash flows based on the asset compression I just explained.
We expect our cash flows to improve considerably, given the significant improvement in profit and the
additional asset compression.
We expect the balance of interest-bearing liabilities to come to around JPY1,800 billion as of the end of March
2021. As of the end of March 2020, the balance was JPY1,814.3 billion, as shown on the right side, so we
expect to be able to compress the interest-bearing liabilities compared to last year. We also expect our debtto-equity ratio to come to 95.4%, which is lower than the figure at the end of last year.
Previously, in November, we announced that we expect the debt balance to be JPY1,900 billion at the end of
the fiscal year, meaning that our new forecast is a JPY100 billion improvement from that figure.
On the left side, we included a simple chart of cash flows. The reason why our forecast improved by JPY100
billion is that we expect the loss attributable to shareholders of the parent to improve by JPY60 billion
compared to the loss of JPY100 billion last time and an additional asset compression of JPY30 billion.
Furthermore, we expect an improvement of an additional JPY10 billion from the reduction of spending related
to CapEx & investments.
Based on these factors, we expect an improvement in cash flows of JPY100 billion, resulting in a significant
upturn in our forecast from negative free cash flow to positive free cash flow for this year.

9Next, I’ll go over the dividends. This is on page 14.
In light of the significant improvement in profit in the second half led by the Steel Business and our outlookon earnings in the next fiscal year, we have decided to propose a dividend per share of JPY10 at the Annual
General Meeting.

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Next, I will go over the performance at each operating company. First, I will go over the Q3 results and financial
forecast at JFE Steel.
Please see page 16.
This chart shows the key data for Q3. I’d like you to first look at the row for segment profit, which shows that
there were considerable segment losses in the April to June and July to September quarters. This was reversedin the October to December period to a profit of JPY34.3 billion from a significant loss in the first half.
Below that, we also show the profit excluding one-off factors such as inventory valuation. This figure has also
turned to the black, with a profit of JPY14.3 billion for the October to December quarter. When looking at thequarterly results for FY2019, segment profit excluding one-off factors such as inventory valuation, has turned
black for the first time since the October to December period last fiscal year. Also, it was the first time since
the June to September period last fiscal year for segment profit to be in the black.
Crude steel production in Q3 was 6.27 million tons, recovering to a level roughly on par with the previous year.
When you look at the quarterly figures, then you see that this October to December period last fiscal year was
in a downtrend for production due to a drop in market prices. Nonetheless, production has recovered to thesame level as the same period last fiscal year.

11This slide explains the breakdown of differences in segment profit compared to the same nine-month period
last year. This is on page 17.
Segment profit has fallen from JPY11.3 billion in the same period last year to a segment loss of JPY101.9 billion,
indicating a deterioration of JPY113.2 billion. Below that, we show that steady progress is being made in cost
reductions at JPY76 billion compared to the annual plan of JPY100 billion.
However, as written here, sales volume of crude steel fell by around 3.6 million tons. On top of that, theproduct mix deteriorated, resulting in a negative impact of over JPY90 billion. The metal spread between costand selling price narrowed by JPY7 billion. Although both domestic and overseas selling prices fell significantly,
this was partly offset by a decrease in the price of coking coal.
On top of that, segment profit deteriorated by JPY29 billion, due to inventory valuation and was negatively
impacted by around JPY40 billion due to a decrease in profit at overseas subsidiaries, which is included in
Others. As a result, segment profit worsened by more than JPY110 billion compared to the same period last
year.

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Next, I’d like to go over our understanding of the current domestic business environment.
Activity levels are picking up at customer sectors, resulting in an overall recovery trend for domestic steel
demand. Demand in the automobile industry has already recovered to a similar level as the same period lastyear, and we expect the other manufacturing industries to recover in stages.
On the left side, we show the outlook on steel consumption. As you can see, the Q4 outlook for steel
consumption is a decrease of 1.9% YoY for manufacturing and a drop of 6.1% YoY for construction, indicatingthat consumption is on a recovery track compared to the first half of the fiscal year.
We have indicated the outlook for each sector on the right side. Domestic automobile production turned
positive YoY starting in October.
However, recovery in steel demand is likely to take time in the shipbuilding sector as orders continue to besluggish.
At other manufacturers, the activity level is recovering, particularly in construction machinery and industrial
machinery. We expect steel demand to recover gradually.
In the civil engineering sector, we expect steel demand to remain firm due to the prospect of securing a highbudget for public works projects.
In the construction sector, the environment is still severe except for large-scale redevelopment projects andlogistics warehouses. We expect steel demand to recover moderately.

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Our outlook for the overseas market depends on the region, but we think overall demand continues to be on
a recovery trend.
We show the automobile sales volume in each country on the left side. Sales have recovered starting with
China, followed by India, and now Thailand is also coming very close to the same level as the previous fiscal
year. In Indonesia, alone, recovery is slightly slow, but overall sales are recovering.
As written on the right side, the supply-demand balance of steel sheets has tightened a lot recently, resulting
in a sharp rise in market prices. On the bottom right, we show the price of hot-rolled coil in Southeast Asia,
which has been rising sharply.
The situation remains extremely challenging in the shipbuilding sector, but we expect a gradual recovery in
the future.
In the energy sector, we are on a moderate recovery trend, but we expect recovery to take some more time.

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We have indicated our assumptions underlying our forecast on page 20.
Previously, we assumed a crude steel production volume of 22.5 million tons. However, given the recovery indemand in Japan and overseas, we upwardly revised the assumption by 0.2 million tons to 22.7 million tons,
meaning that our assumption for the second half is around 12.5 million tons.
As for the metal spread, the price of the raw material iron ore has been at an elevated level. In the January to
March quarter, we expect a price that is around USD10 higher than the previous quarter. On the other hand,the price of coking coal for the January to March period isn’t finalized yet. Assuming a steady recovery indemand outside of China and seasonal factors, as well as the sharp rise in prices recently, we assume a modest
increase in price compared to the previous quarter.
In any case, we are working to reflect the higher input costs in the selling price as soon as possible.
As for the metal spread of exported hot rolled coil, we expect a significant recovery in the second half, given
the considerable rise in market prices. In total, we expect the metal spread to improve by JPY23.0 billion fromthe previous forecast.

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On page 21, we have summarized the figures for the overall business outlook.
In the Steel Business, we expect a segment profit of JPY56.2 billion in the second half. However, we expect
the full-year segment loss to be JPY80 billion.
As for the segment profit excluding inventory valuation etc., we forecast a full-year segment loss of JPY39
billion. But, for the second half, we expect around the same level of segment profit in Q3 and Q4 of around
JPY14 billion to JPY15 billion. As a result, we expect a segment profit of around JPY29 billion in the second half.

16Based on this assumption, we upwardly revised our full-year segment profit forecast by JPY55 billion, as shownon page 22. The upward revision breaks down as follows.
As for cost, our assumption is unchanged at a reduction of JPY100 billion. Regarding volume, we expect an
improvement of JPY4 billion on a crude steel production increase of 0.2 million tons. We expect the metal
spread to improve segment profit by JPY23 billion on an upturn in market prices for exports, as explained
earlier in the section on our assumption for the metal spread. Also, we expect inventory valuation to improvesegment profit by JPY4 billion.
Further, we expect an upturn at Group companies under others, accounting for JPY17 billion out of the JPY24
billion improvement. All things included, we have upwardly revised our segment profit forecast by JPY55
billion.

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The next page shows a comparison of the segment profit forecast with the result from the previous fiscal year.
Compared to the previous fiscal year, we expect segment profit to deteriorate by JPY71.3 billion. As I have
explained, we expect an improvement of JPY100 billion from cost reductions. However, we assume that thiswill be offset by the negative impact of JPY105 billion from the production cut of 4 million tons despite having
upwardly revised our production outlook by 0.2 million tons.
In the previous announcement, we expected the metal spread to have a negative impact YoY. But, this time,
we expect the metal spread to improve segment profit by JPY23 billion, which is on par with the previous
fiscal year. In other words, the metal spread is now at a net-zero level YoY.
We expect inventory valuation to have a negative impact of JPY11 billion. Regarding others, as I have been
explaining all along this year, the scope of deterioration in profits at group companies has improveconsiderably, but profit is still around JPY43 billion worse than the previous year. Overall, we expect a
deterioration in the segment loss by over JPY70 billion.

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On page 24, we show a comparison between the first half and second half.
In the first half, we posted a segment loss of JPY136.2 billion, but we expect this to turn to a segment profitof JPY56.2 billion in the second half, indicating a difference of around JPY190 billion. The breakdown is shownin the table. In the second half compared to the first half, we expect cost to improve profit by JPY15 billion
and volume to boost profit by JPY46 billion on a production increase of over 2.3 million tons. We expect themetal spread to lift profit by around JPY18 billion on an upturn in market prices centered on exports.
Further, the part with a sizable difference between the first and second half is the inventory valuation andother factors expanding profit by JPY95 billion. In particular, we expect inventory valuation to raise profit by
JPY78 billion. In the first half of the current fiscal year, we were forced to book a significant loss on a lower ofcost or market method. However, due to the recovery in market prices in the second half, this loss will be
unwound. As a result, the improvement on a lower of cost or market method is roughly equivalent to thisboost in inventory valuation, and this is a major factor behind the increase in profit.
On top of that, we expect the profit or loss of Group companies to improve by around JPY24 billion from thefirst to second half. Based on these factors, we forecast a substantial improvement in segment profit.

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Regarding our initiatives for further profit improvement in FY2021, as I stated earlier, we expect to post asecond-half segment profit of JPY29.2 billion, excluding inventory valuation etc. We assume a crude steel
volume of 12.5 million tons and the level of profit or loss at Group companies has returned to the 70% level
YoY.
Based on this premise, we will continue to strive for optimum production, and we will implement further cost
reductions through fixed cost reductions, given that there will be new facilities coming online next year. As
for selling price, we will strive for higher prices by passing on raw material costs to prices as early as possible
and by conducting a comprehensive inspection of price extras.
We have indicated the variable factors on the bottom. We must continue to watch the steel demand,
especially the impact of COVID-19 on the recovery trend, and the sharp increase in raw material prices.
Although steel prices are highly favorable at present, we must watch how prices change. Although there aresuch variable factors, we will strive to significantly improve profit. By all means, we will work to achieve
profitability in the Steel Business on a standalone basis in FY2021.

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Next, I will go over the Engineering Business.
As shown on page 27, we expect to achieve a profit roughly on par with the previous year even under the
pandemic. We upwardly revised our segment profit forecast by JPY1 billion, mainly due to additional cost
reductions. We expect orders to reach JPY500 billion as planned.

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Next is JFE Shoji on page 29.
As with the Steel Business, there has been a recovery in the activity level since entering the second half. As
such, we revised up our full-year segment profit forecast by JPY4 billion to JPY17 billion.
The situation is the same as what I explained in the section on the Steel Business.

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Next, I will go over our ESG initiatives. There are several individual initiatives, so I would like to go over a few
of them.
On page 31, we explain the development of Eco Products, which are environmentally-friendly products. On
the top, we wrote about an electrical steel sheet, which is a silicon-gradient steel sheet for high-speed motors.
We have developed a product that addresses the issue of large iron loss in high-speed motors andminiaturized motors used in electric vehicles and home appliances. We developed this product to prevent thelarge iron loss from occurring. Through this product, we intend to contribute to energy-saving and accordingly
to the realization of an environmentally-friendly society.
On the bottom, we write about our 1,470 MPa-grade high-tensile strength cold-rolled steel sheets, which havebeen adopted for the first time in vehicle body structural parts. These high-tensile strength steel sheets used
to be made through the hot press forming process. But this process required heating at high temperaturesand many steps, resulting in cost issues. By realizing a cold-press forming process, we can contribute to lower
costs and energy-saving in the pressing process.

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On the next page, we give a few examples of our eco-solutions.
First, in the Engineering Business, we started a demonstration project for oil sludge treatment in China. We
have partnered with Beijing Heron to treat oil sludge discharged from places like oil refineries. In China, thetreatment process used to be by landfill and incineration. However, due to the rising need to beenvironmentally conscious in China, the process described here in the middle is being adopted. This is aprocess in which the sludge is separated and detoxified to contribute to the reduction of CO2 emissions. The
cost also comes down. The demonstration project is aimed at such results.
We are participating in this project by leveraging the expertise of our Engineering business in the treatment
of industrial waste. We are conducting this project, while keeping the expansion of our overseas operational
businesses in China in mind.

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The next page also describes a demonstration testing to capture CO2 from exhaust gas emitted from waste
treatment plants.
In the EPC operations of our Engineering Business, we had already established technology to reducegreenhouse gas emissions through a significantly efficient power generation system and full automation. In
addition to this, we have started demonstration testing of the so-called CCU process, in which CO2 is captured
from exhaust gas and utilized.
Through the practical use of this technology, we will be able to contribute to the reduction of environment
burden by making all treatment plants constructed by Engineering a CCU-Ready Plant, encompassing
everything from EPC business to the subsequent operating business.

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Next, we are also conduction the demonstration testing of converting used disposable diapers into fuel.
We are doing this in Niigata. About 4% of general waste is accounted for by disposable diapers, and this is
expected to increase more in the future as the aging society progresses. Currently, used disposable diapers
are all incinerated. However, by using them as pellet raw materials instead of incinerating them, we can, forinstance, use them as fuel for boilers in nursing homes. By doing so, we can help reduce fuel used inincinerating disposable diapers and fuel used inside nursing homes.
In that respect, this would help reduce CO2 emissions on both sides and also reduce waste. For such reasons,
we are conducting this development.
This time, I explained a few individual examples.

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Next, I will explain the capital and business alliance between Japan Marine United and Imabari Shipbuilding.
This is on page 36.
As already announced, on January 1, Japan Marine United and Imabari Shipbuilding formed a joint venture
called Nihon Shipyard Co., Ltd., although it was three months behind schedule.
I will omit an explanation of the content or overview of the business alliance, because it is exactly the sameas the last time I explained it.

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Finally, we have added a page on page 38 on our seventh Medium-Term Business Plan.
We plan to announce our seventh Medium-Term Business Plan along with the disclosure of our full-year
financial results in May of this year.
The medium-term period starts from the next fiscal year, FY2021. Previously, our medium-term plans havebeen for three-year periods. However, the benefits of the structural reform in the Steel Business, which wehave said will be completed in September 2023, will only take shape fully from the following fiscal year in
FY2024. As a result, we intend to announce a plan with an extended medium-term period of four years,
targeting FY2024, instead of the typical three years.
That’s all from me.

This document does not purport to address the requirements of the Financial Instruments and Exchange Act. It is the
responsibility of the user of this document to determine the correctness and integrity of the information in regard to its
use. The forecasts presented are prepared on the basis of information available at the time of the briefing session andinclude uncertain factors. It is strongly recommended NOT to rely only on the forecasts in this document when making
investment decisions. In no respect will JFE Holdings, Inc. incur any liability for any damage arising out of, resulting
from, or in any way connected to the use of the information contained herein.

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