JFE Holdings, Inc.
Q2 Financial Results Briefing for the Fiscal Year Ending March 2023
November 4, 2022

Presentation
Moderator: We would now like to begin the financial results briefing of JFE Holdings, Inc.
Today’s speakers are Mr. Masashi Terahata, Representative Director, Executive Vice President, and Mr.
Toshihiro Tanaka, Senior Vice President.
The duration of the briefing will be 60 minutes, consisting of a 30-minute presentation, a 30-minute question
and answer session. Questions will be received in a lump after the presentation.
First, Mr. Terahata, Representative Director and Executive Vice President, will give an overview of the financial
results and business outlook announced today.

Terahata: I am Terahata. Thank you for listening.
Due mainly to an increase in profit in the steel business, mainly due to improved spreads, business profit for
H1 of FY2022 was JPY187.9 billion, JPY22.9 billion higher than the previous forecast.
Business profit for FY2022 is expected to be JPY255 billion, an increase of JPY20 billion from the previous
forecast.

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Currently, we see the economy and demand for steel as being on a recovery track. On the other hand, due tothe delay in the recovery of automobile production in Japan, the impact of real estate market in China, andrecession in the US and Europe overseas, we expect it will take some time for the market for steel to recover.
In light of this situation, we have revised our crude steel production forecast for the current fiscal year
downward to approx. 25 million tons from the previously announced forecast of just less than 26 million tons.
On the other hand, however, we see steady results in the improvement of domestic sales prices. Despite thedecline in crude steel production, we expect the performance of the steel business to be up from the previous
forecast.
In the engineering and trading businesses, we expect to maintain stable earnings for the full year.
The exchange rate is expected to be JPY145 per US dollar in 2H of the FY2022. In the steel business, rawmaterials prices have settled down, so the excess of foreign currency payments is becoming smaller, and theimpact of the yen depreciation is also expected to be smaller.
Regarding dividends, the Board of Directors today resolved to pay an interim dividend of JPY50, taking into
account the 1H of the FY2022 performance.
In addition, we plan to explain the progress of the land use study for the Keihin area.
That’s all from me.
Tanaka: I would like to explain the contents of the material we have posted on our website today.
The table of contents is as shown.

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First, I would like to present the 1H of the FY2022 results for the Group as a whole, as well as the outlook forthe full year.
Please see the financial results for 1H of FY2022 in the blue box. 1H of the FY2022 showed revenue of
JPY2,564.3 billion, business profit of JPY187.9 billion, segment profit of JPY181.2 billion, and profit attributableto owners of parent of JPY123.2 billion.
On the far right is a comparison with the forecast announced in August. In terms of profit items, we haverevised upward our business profit forecast by JPY22.9 billion and our net profit forecast by JPY23.2 billion
compared to the previously announced figures.
Please see the projected annual values in the blue box. The new forecast figures announced this time arerevenue of JPY5,260 billion, business profit of JPY255 billion, segment profit of JPY240 billion, and net profitof JPY155 billion. A comparison with the previous announcement is shown on the far-right side. The businessprofit forecast was revised upward by JPY20 billion and the net profit forecast was revised upward by JPY15
billion.

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Figures by segment are shown on the next page.
Please see the profit items for each segment below the middle row. First, regarding 1H of the FY2022, pleaserefer to the right-hand side, which shows the change from the previously announced forecast. Segment profit
for 1H exceeded the forecast by JPY26.2 billion. As you can see, profit exceeded the forecast by JPY28.2 billion
in the steel business and JPY5.6 billion in the trading business. On the other hand, in the engineering business,
profit was JPY7.9 billion below the previous forecast.
The engineering business posted a loss of JPY3.9 billion for 1H, the first 1H loss since 2005. Factors such as therising cost of materials and equipment, changing schedule of progress, and the loss of overseas construction
projects are among them. I will explain later in the slide of the engineering business.
Despite these negative factors in the engineering business, segment profit for 1H exceeded the previously
announced forecast by JPY26.2 billion. As for annual profit, we expect to exceed our forecast by JPY15 billion
in the steel business and JPY5 billion in the trading business.
For the engineering business, profit in 1H was significantly below the forecast, but for the full year, we expect
to maintain the previous forecast of JPY20 billion.

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This section explains steel demand and crude steel production.
We expect the economy and steel demand to continue to recover, but there has been a delay in recovery
since our previous forecast release.
As for Japan, production cutbacks have been more prolonged than previously forecasted, mainly due tocontinuing restrictions on parts supply in the automotive sector.
Overseas, the recovery in demand and market conditions for steel has been delayed compared to the previous
forecast due to the slowdown in the major European and US economies caused by soaring prices andmonetary tightening, as well as the sluggish real estate market in China and weak construction demand inSoutheast Asia.
The leftmost graph on automobile production shows the outlook for production in Japan. Compared to theprevious forecast level on the far right, both current forecasts have been revised slightly downward. The graphin the center shows the forecast for steel demand. The previous forecast for global steel demand, second
from the far right, was 1.84 billion tons. The most recent forecast revised demand downward by about 40
million tons, or about 2%. The rightmost graph shows the steel market price in China. The steel market pricein China is in a steady decline and shows no signs of recovery.
In response to this, we are continuing to pursue optimal production. The standalone crude steel production
forecast has been revised downward by 1 million tons from the previous forecast to approx. 25 million tons.

5In response to this, we are continuing to pursue optimal production. The standalone crude steel production
forecast has been revised downward by 1 million tons from the previous forecast to approx. 25 million tons.

This section describes our efforts to improve sales prices.
The yen has been weakening, and we are continuing our efforts to pass on changes in the price of key raw
materials, including the impact of exchange rates, without delay.
The graph on the left side below shows the average sales price of steel. As noted in red, we were able tofurther increase prices in Q2 of the FY2022 by a little less than JPY3,000 to JPY136,700 per ton, compared toour previous forecast of JPY134,000 per ton. Compared to Q4 of the FY2021, we realized a price increase of
JPY20,000 per ton in the six months through Q2.
The chart in the middle shows a schematic representation of the progress in sales prices in 1H. The blue arrow
indicates the portion of the sales price increase that was achieved in response to increases in the price of key
raw materials and other commodities. For 2H, we are working to increase prices to exceed the cost increases
shown in red on the right side.

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This page describes dividends.
The interim dividend was resolved at JPY50 per share. The previously announced dividend was JPY40, but wehave decided to increase the dividend by JPY10 in light of the positive 1H results of FY2022.
The dividend payout ratio relative to the 1H results is about 24%. Our policy of maintaining a dividend payout
ratio of around 30% remains unchanged, of course. The year-end dividend will be considered in light of future
performance trends and is undecided at this time.

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Next, I will explain the details of the steel business.
Revenue is projected at this time to be JPY3,960 billion in FY2022. Segment profit forecast is expected to be
JPY165 billion. As you can see, there is a large difference between 1H and 2H of FY2022. Compared to JPY148.2
billion in the 1H of FY2022, segment profit in the 2H of FY2022 is expected to be JPY16.8 billion.
Just look at the figure one line that excludes the inventory valuation difference. 2H forecast is JPY50.8 billion
compared to JPY32.2 billion in 1H, and the annual forecast is JPY83 billion. The figure in 2H is expected to behigher than that in 1H. Furthermore, see the previous outlook on the far right. The previous forecast was
JPY28 billion for the year. The annual forecast announced this time is JPY83 billion, which is a further
improvement of JPY55 billion.
Crude steel production is expected to be approx. 25 million tons in FY2022, and the exchange rate is expected
to be JPY145 in 2H.

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Comparing the forecast and the actual result for 1H of the FY2022, segment profit improved by JPY28.2 billion.
In terms of volume, crude steel production fell by a little over 300,000 tons, with a negative impact of JPY5
billion.
The improvement in spreads had a positive impact of JPY24 billion. Regarding sales and raw materials, inaddition to the improvement in sales prices, raw materials prices were slightly lower than forecast.
With respect to inventory valuation, carry-over effect was a negative factor, but the positive effect of foreignexchange valuation due to the yen’s depreciation was large.

9The next page shows a comparison of the results for 1H of FY2021 and 1H of FY2022.
Compared to 1H of FY2021, segment profit decreased by JPY10.3 billion. Volume was almost unchanged from
1H of FY2021, so the impact on profit is almost zero.
Spread improvement had a positive impact of JPY76 billion. As for raw materials costs, costs for coking coaland metals increased, but we significantly increased sales prices, mainly in Japan.
The impact of foreign exchange rates and inventory valuation are as shown. Other factors include the impactof a slight slowdown in overseas group companies compared to FY2021, as well as the impact of higher energy
unit prices.

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I would like to explain our perception of the current business environment. First, let’s look at domestic
demand for steel.
Overall, the recovery is a little slower than the previous forecast due to prolonged production cutbacks in theautomotive sector.
Uncertainty about the future due to soaring prices and slowdown in overseas economies has led to risk
aversion, such as buying restraint and inventory adjustment. Regarding automobile production, we believethat the recovery trend is continuing, although the production cuts are more prolonged than expected. We
had initially assumed that the supply and demand for steel would tighten from latter half of 2H, but it will dofrom the latter part of 2H.
Trends in each field are written in the lower right corner. In general, the situation has not changed that muchfrom what we mentioned last time. There is a tendency to get slightly delayed, but in general, not much haschanged.

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Next, I will explain the demand for steel overseas.
Overseas, the level of activity in the manufacturing sector, particularly in the automotive sector, is recovering.
See below, on the left, the number of automobiles sold by each region. Basically, sales have been steadily
increasing.
On the other hand, we are seeing sluggish domestic demand in China due to a slump in the real estate market
and postponed construction demand in emerging countries due to currency depreciation. Overall steel
demand lacks strength.
Looking ahead, we expect a recovery due to the Chinese government’s support for the economy and autumn
demand. We believe that the timing of recovery will be much later than expected and will be in the latter partof 2H, after the New Year.
In the lower right-hand corner, we described trends by non-automotive sectors. The timing of recovery indemand for thin sheets has been delayed from the previous forecast. On the other hand, demands about
energy are increasing, especially for high-chromium seamless steel pipes, which is our forte.

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Next, raw materials trends.
The iron ore market is weakening due to sluggish demand for steel and other factors, as shown in the graphbelow left. The coking coal market has fallen from its recent peak, but is now rising again. I think it will remain
at a high level. As it enters the rainy season, we believe that we need to be vigilant against supply reduction.
Going forward, we assume that the market will basically remain at the current level.
The market for metal and scrap has also been soaring due to tight demand for alloy iron and other metals,
and rising fuel prices. Although the market has calmed down a bit from the temporary spike, the forecast isthat it will remain at a high level.

13Based on these trends, the above is a breakdown of the increase-decrease in segment profit for the Steelbusiness.
Segment profit for FY2022 year has been revised upward by JPY15 billion from the previous forecast. With
respect to volume, there is expected to be an impact of 1 million tons of crude steel production reduction. On
the other hand, we expect a positive impact of JPY3 billion of the mix, which is due to an increase in thecomposition ratio of seamless steel pipe.
The impact of spread improvement was revised upward by a significant JPY130 billion. With raw materials
prices now considerably lower than in the previous forecast, costs are expected to decrease significantly. As
for the impact of sales prices, the price level itself is expected to be lower than the previous forecast, but
compared to the decline in raw materials prices, the sales price is expected to be maintained to some extent
without declining that much.
With regard to the impact of inventory valuation, the carryover impact shown in the middle will have anegative effect, partly because the forecast for raw materials prices has been lowered considerably from theprevious forecast.
In others, a slight downward revision was made to reflect the negative impact of mainly overseas groupcompanies.

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The table above shows a comparison with the previous year.
Compared to the previous fiscal year, segment profit decreased by JPY158.7 billion. The cost reduction impact
was JPY10 billion, unchanged from the previous forecast. There was a negative impact of JPY13 billion fromthe refit of the blast furnace in Chiba, offset by JPY10 billion from cost reduction actions. The volume
difference had a negative impact due to the decrease in crude steel. The improvement in spreads had apositive effect of JPY200 billion. There was a negative impact of JPY105 billion of foreign exchange on trade,
and a negative impact of JPY112 billion of inventory valuation effects.

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Next is the difference between 1H and 2H of FY2022.
I mentioned that there is a large profit difference between 1H and 2H, and this difference is a negative
JPY131.4 billion.
As for costs, the impact of the refit of the six blast furnaces in Chiba will be significant in 2H, but this will be
offset by other cost reductions, and the result is expected to be almost unchanged.
In terms of volume, 2H will see a slight decrease in crude steel production compared to 1H, which will have anegative impact of about JPY4 billion.
The spread improvement is expected to have a positive impact of approximately JPY100 billion by maintaining
high sales prices, although the impact of lower raw materials prices is still significant.
The large difference between 1H and 2H is due to inventory valuation differences. Negative impact of
inventory valuation is expected to be JPY92 billion, and negative impact of carryover to be JPY29 billion. As
for the impact of exchange rate differences, the positive impact seen in 1H will disappear, since the exchange
rate is expected to remain almost unchanged from the end of 1H. Including all of these factors, we expect a
JPY150 billion decrease in profit.
Due to this significant factor for the decrease in profit, segment profit, excluding inventory valuationdifference, is expected to improve from 1H, thanks to the improvement of the spread.

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This page shows impacts of the depreciation of the yen. This document is almost the same as the previousone.
The yen has weakened further since the last announcement. The exchange rate for 2H was estimated to be
JPY145 against the US dollar, which is JPY10 weaker than the previous forecast of about JPY135 against the
US dollar.
On the other hand, the excess of foreign currency payments has been shrinking, as raw materials market
conditions have calmed down. Please refer to the graph in the middle. In the previous forecast, we had
estimated that the excess payment would be about USD2.4 billion even in 2H, but the current forecast is about
USD1.4 billion, which is a reduction of about USD1 billion.
In terms of sensitivity to exchange rates in 2H, each yen depreciation will result in a negative impact of JPY1.4
billion. On the other hand, we also hold about USD1.3 billion in assets denominated in foreign currencies. The
overall foreign exchange balance is almost offset by the difference between effects on trade and valuation,and even if the yen were to weaken significantly in the future, we do not expect the impact to be significant.

17Here you see the roadmap of the progress of structural reforms in 1H.
As shown at the top, the shutdown of the tin mills in Chiba has been completed. The shutdown was completedin August, and the facilities are being consolidated in Fukuyama.
In addition, in September, we began refit of the number six blast furnace in Chiba. The blow-in is scheduled
for next January. After this blow-in, as noted below, we will begin full-scale preparations for the shutdown of
the upper process at Keihin next September.

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We have summarized initiatives toward achieving our mid-term plan from 2H of FY2022.
The segment profit forecast for 2H, excluding inventory valuation in the steel business, is approximately JPY50
billion, which, if doubled, would amount to approximately JPY100 billion on an annualized basis.
Please refer to the graph above. We expect the impact of the refit of the blast furnace in Chiba to be negative
JPY10 billion in 2H of the fiscal year, which will amount to JPY20 billion on an annualized basis.
Therefore, we expect segment profit excluding inventory valuation and the cost of the blast furnace refit in
Chiba is to be JPY120 billion.
We assume that crude steel production will recover by 1 million tons to around 26 million tons, which will
increase segment profit by JPY20 billion. Through cost reductions, we expect to gain an additional JPY45 billion
after the completion of structural reforms next September. So-called normal cost reductions are expected toamount to JPY30 billion. We believe that this figure is enough possible since it is about JPY15 billion per year.
The total up to this point is JPY215 billion.
The segment profit target for the medium-term plan is JPY230 billion, so the difference is JPY15 billion. As
written on the right, we believe that by increasing the ratio of high value-added products, improving sales
prices including extra improvements, and expanding the overseas solution business, we can aim for more than
JPY15 billion.

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Next, let’s look at the engineering business.
1H results were in the red. As noted above, there was an impact from the sharp rise in the cost of materials
and equipment, change in schedule of progress, and the deterioration of P&L from the construction of power
generation projects in Europe.
Compared to the previous announcement, segment profit in 1H deteriorated by JPY7.9 billion. The higher
material and equipment costs and the effect of the change in schedule of progression had a negative impact
of JPY4.1 billion. Of this amount, JPY2.9 billion was due to the impact of the change in schedule of progress.
The impact caused the revenue to be about JPY10 billion less than the forecast. The delay in construction
progress has caused the posting of revenue to be delayed to 2H, and the revenue deteriorated due to thedelay in the accrual of expenses in the operation business, which we call the impact of the change in scheduleof progress. These are things that can certainly be recovered in 2H.
The deterioration of P&L on construction work overseas was JPY3.8 billion. The situation in Ukraine has had agreat impact on projects, and we have had to incur various additional costs to meet the construction scheduledue to soaring prices of materials and equipment, delays in delivery, bankruptcy of subcontractors, and otherfactors.
We will negotiate and discuss with customers any billable cost increases in the future. In any case, once theexpenses have been incurred, they have to be reported as losses in the financial statements, which had aconsiderable negative impact on 1H figures.

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The text box at the bottom describes the annual segment profit. Segment profit deteriorated by JPY7.9 billion
in 1H. The JPY2.9 billion impact of the change in schedule of progress will certainly be recovered in 2H of the
fiscal year. In order to secure the projected segment profit of JPY20 billion for the year, it will be important tobe able to increase profits by JPY5 billion by passing on the higher prices of materials and equipment andreducing costs.
The impact of rising material and equipment costs in Japan, et cetera, is usually negotiable with the customer
under escalation clauses or other means. However, even if discussions have already been substantiallyadvanced, there are practices or contractual rules which is that the final lump-sum settlement would be
accounted for after the completion of construction works, so that amount could not be fully realized in 1H
and have been shifted to 2H. Therefore, we believe we will be able to achieve our annual forecast of JPY20
billion.

Next is the JFE Shoji business.
For the Shoji business, segment profit for 1H was JPY40.6 billion, and the annual forecast is JPY60 billion. In
1H of the fiscal year, business in North America was very strong, resulting in an increase of JPY5.6 billion overthe previous forecast. In light of this, we have revised our annual forecast upward by JPY5 billion to JPY60
billion.

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Finally, here are the topics. This section summarizes the progress of land use in the Keihin area.
There are five areas under consideration for land use in Keihin, totaling 400 hectares. The five areas are, as
shown in the table, Ogishima and Minami-watarida, and the other three areas are Mizue, Ogimachi, andIkegami. Overall, since the study area is in Kawasaki City, Kawasaki City is scheduled to formulate a land use
policy at the end of this fiscal year. Consistent with this policy, we plan to promote development in
combination with options such as land sales, land leasing, and business use.
As for Ogishima, there will be a shutdown of the upper process in September 2023, and within the same year,
we plan to announce our development policy. Based on this policy, a portion of the land is planned to be put
into service by 2030. As already announced, we are considering the development of facilities with ENEOS
Corporation and JERA Co., Inc. to receive and supply hydrogen, ammonia, and other decarbonized fuels.
Minami-watarida is positioned as the most advanced area for consideration. It will be developed as an R&D
and innovation cluster in accordance with Kawasaki City’s plan. As for the northern area of Minami-watarida,
the project is scheduled to start in FY2024 and to be partially put into service in FY2027. Perhaps the northarea of Minami-watarida is the most advanced in land development.
Of the other three districts, Mizue in particular will be expanded and developed as a major recycling center in
the Tokyo metropolitan area. We will make further announcements as progress is made.

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Finally, I would like to touch on the publication of the Group report and the CSR report.
This year, the Group report, the so-called “integrated report,” and the CSR report were issued in September.
The contents are as described. We hope you will find those reports useful as well.
That’s all for my explanation.
[END]

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 informationin regard to its use. The forecasts presented are prepared on the basis of information available at the time of thebriefing session and include uncertain factors. It is strongly recommended NOT to rely only on the forecasts inthis document when making investment decisions. In no respect will JFE Holdings, Inc. incur any liability forany damage arising out of, resulting from, or in any way connected to the use of the information contained
herein.

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