Management Goals and Medium-Term
Strategies/Business Plan

June 2003
Nippon Steel Corporation

Copyright （c） NIPPON STEEL Corporation 2003 All rights reserved.

0Contents

I.

Steel Business① Business Environment② Nippon Steel’s Competitive Advantages③ Key Issues and Strategies

II. Medium-Term Financial Goals (FY2003 - FY2005)* Names of companies appearing in this presentation have been abbreviated1

I. Steel Business2

Nippon Steel: Progressing Into A New Phase of Earnings GrowthBusiness
Business Environment
Environment

GlobalGlobaldemand
demandsupported
supportedby
bybrisk
briskgrowth
growthininSoutheast
SoutheastAsia,
Asia,especially
especiallyChina
China
Capacity
Capacitylimitations
limitationsleading
leadingtotofavorable
favorabledemand
demandfor
forhighhighvalue-added
value-addedproducts
products
StableStableandandfirm
firmsteelsteelprices
pricesdueduetototighttightsupply
supplycaused
causedby
byindustry
industryconsolidation
consolidation
GlobalGlobalsteel
steelcommodity
commoditypricepriceconvergence
convergencefavorable
favorablefor
forJapaneseJapanesesteel
steelmakers
makersStrategies
Strategies && Goals
Goals

ExpandExpandsales
salesofofhighhighvalue-added
value-addedproducts
productsiningrowing
growingmarkets,
markets,especially
especiallyChina
China
Capitalize
Capitalizeon
onstrong
strongrelationships
relationshipswith
withkey
keyJapaneseJapanesecustomers
customers
Establish
Establishglobal
globalalliances
allianceswith
withforeignforeignsteel
steelmanufacturers
manufacturers(e.g.,(e.g.,Arcelor)
Arcelor)Increase
Increaseefficiencies
efficienciesofofdomestic
domesticmills
millsbybyexpanding
expandingblast
blastfurnace
furnacevolume
volumeInvestInvestinindownstream
downstreamproduction
productionfacilities
facilitiesininAsia
Asia(e.g.,(e.g.,JV
JVwithwithBao
BaoSteel
SteelininChina)
China)
Goal:
Goal:achieve
achieverecord
recordhighhighrecurringrecurringprofit
profitofof¥250bn¥250bn($2.1bn)($2.1bn)ininFY2005
FY20053

I. - ① Business Environment4Worldwide Demand for Crude Steel: Asian Market as a Significant Growth Driver
China
China

Worldwide
Worldwide && AsiaAsia(millions of tons)
900

829

780

Worldwide

700

500

449

422

372

Asia

300

100

CY2001

2001→ 2003E
Worldwide ＋11%
Asia
＋20%
Worldwide ex-Asia
＋3%

868

CY2002E

CY2003E

255

240

232
211

210

180

Global Crude Steel
Production (CY2001)

174

150

120

CY2001 CY2002E CY2003E CY2004E

Worldwide 846m tons
Asia
351m tons

2001→ 2003(E)
China
＋33%

Japan
Japan
75

73

72

72

China
149

Others
495

Korea
Korea

65
60
55

Asia Others
55

45
35

CY2001

CY2002E

CY2003E

Japan
103

Korea
44 50

(Source: International Iron and Steel Institute)

40

44

44

CY2002E

CY2003E

38

30
20

5

16%
increase

CY2001

Global Consolidation Has Helped Recover Pricing Powers<CY1995
CY1995
CY1995<2002cy>
CY2002
CY2002
Crude Steel Output Ranking (millions of tons)

Crude Steel Output Ranking (millions of tons)

1

Nippon Steel (Japan)

26.8

1

Arcelor (EU)

44.0

2

POSCO (Korea)

23.4

2

Nippon Steel (Japan)

30.9

3

British Steel (EU)

15.7

3

JFE（Japan）

30.3

4

Usinor Sacilor (EU)

15.5

4

POSCO (Korea)

28.9

5

Riva (EU)14.4

5

LNM Gr (Ispat) (EU)

27.5

6

Arbed Grp. (EU)

11.5

6

Shanghai Baosteel ※ (China)

19.5

7

NKK (Japan)

11.3

7

Thyssen Krupp (EU)

17.0

8

US Steel (US)

11.0

8

Corus(EU)16.8

9

Kawasaki Steel (Japan)

10.4

9

Riva (EU)15.2

9Sumitomo Metals (Japan)

10.4

10

US Steel (US)

14.5

Crude
Crude Steel
Steel Output
Output (growing(growing market
market share
share ofof top
top tenten steelsteel makers)
makers)CY1995
Production Volume Market share
Top 5
9,591
13%
Top 1015,05820%
Total (Worldwide)
75,226100%

6Footnote: Blue represents Nippon Steel alliance partners
Crude steel based on group output volume※ currently under negotiations

CY2002
Production Volume Market share
16,15018%
24,447
27%
90,279100%(Source: Metal Bulletin, IISI)

Prices in Japan, The Lowest Worldwide, Have Recovered Significantly
Steel
Steel Sheet
Sheet Products
Products Price
Price Index
Index

Price
Price Trends
Trends ofof Steel
Steel Products
Products in
in JapanJapan(Nippon(Nippon Steel
Steel estimatesestimates as
as ofof FY2002-3Q)
FY2002-3Q)(¥1000／ton）

ASEAN

Japan

EU

US

( Thailand)

China

10

11

10

11

120

10

11

12

11

130

Hot-rolled sheets

Cold-rolled sheets

60

50

Cold-rolled sheets

Plates40

Coated steel sheets

10

10

13

-

(Index based on Japan as 100)
130

140
120

20

105
11

1100
00

Ｈ-beams

30

Small pipes (Tokyo)

130
100

Hot-rolled sheets

130

130

115

120

100

10

100

80

11

120

11

10

Scrap (Tokyo)

60

20
Coated steel sheets
Cold-rolled sheets
Hot-rolled sheets

0
an
Jap

EU

US
AS

E

AN

(Th

aila

nd

)
Ch

Hot-rolled sheets (2.3xS)
Samll pipes (SD295-19mm Tokyo)

20
03
-3

9

12

6

20
02
-3

9

12

6

20
01
-3

9

12

6

20
00
-3

9

12

6

19
99
-3

9

Cold-rolled sheets (1.0xS)
Ｈ-beams (200x100)

12

6

19
98
-3

9

19
97
-6

40

12

0

Plates (19mm)
Scrap (Tokyo)

ina(Source: Japan Metal Daily, Nihon Keizai Shimbun)

7

I. - ② Nippon Steel’s Competitive
Advantages

8

Our Competitive Advantages

Solid
Solidcustomer
customerbase
baseininthe
thedomestic
domesticmarket
marketTop
Topmarket
marketshare
shareforforhighhighvalue-added
value-addedproducts
products
StrongStrongcapacity
capacityfor
fordelivering
deliveringtotal
totalsteel
steelproductproductsolution
solutiontotoglobalizing
globalizingcustomer
customerbase
base
Cost
Costcompetitivenesscompetitivenessthroughthroughproduction
productionfacility
facilityenhancement
enhancement
EstablishedEstablishedsupply
supplynetwork
networkfor
forstable
stableandandspeedy
speedydelivery
deliveryStrategic
Strategicbusinessbusinessalliances
alliances withwithleading
leadingoverseas
overseassteel
steelmakers
makersfor
forcapturing
capturing
growthopportunities
as
well
as
delivering
technology
innovation
growth opportunities as well as delivering technology innovation

9

A Solid Domestic Base
(Nippon Steel figures are based on non-consolidated accounts)

Relationship with Leading Domestic Customers
・Steel・Steel ProductProduct Shipments
Shipments

Domestic
Domestic shipments
shipments 66%,
66%, Export
Export ratio
ratio 34%
34%

・Composition
・Composition ofof Domestic
Domestic

High
High weighting
weighting toto long-termlong-term contracts
contracts with
with manufacturing
manufacturingindustryindustry (especially(especially automobiles)
automobiles)

Breakdown
Breakdown by
by User
User Demand
Demand（FY01)（FY01)

Domestic
Domestic Consumption
Consumption andand Nippon
Nippon Steel
Steel Shipments
Shipments ofof Steel
Steel Products
Products（Indexed（Indexedbased
basedononFY1990
FY1990as
as100
100）
）

100

Overall Industry

90

25%
Nippon Steel
30%

86

8

8

80

40%

73
70

55%
30%

20%

Manufacturing(ex.automobiles)
Automobile

60
50

Construction &Retail

FY96

FY02
Domestic

Source: Japan Iron and Steel Federation monthly
statistics

10

Nippon SteelSource: Japan Iron and Steel Federation steel statistics, Nippon Steel estimates

Top Market Share for High Value-added Products

Specialized thin steel sheets(High tensile
strength steel)
特殊鋼薄板

Galvanized steel sheets
ブリキ
for automobiles

Steel鋼材
materials
Nippon Steelapprox. 25%

Nippon Steelapprox. 50%

Rails
軌条

Nippon Steelapprox. 65%

Nippon Steelapprox. 40%

Electrical
電磁鋼板steel

Nippon Steelapprox. 50%

11

Tin
&TFS
ブリキ

Nippon Steelapprox. 40%(Note: Market share based on non-consolidated account)(Source: Order inflow statistics)

Nippon Steel’s Market Share for Automotive Flat Steel in Asia

Asia
Asia (including(including Japan)
Japan)
8 Major Customers
in Asia
ToyotaOthers52%

Honda
Nissan／Mitsubishi Motors／

Mazda／
Isuzu ／
Fuji Heavy／
Suzuki／12

Total demand of 8
major customers(Japan & Asia)
8.2m tons

Nippon Steelest. 48%

Meeting the Needs of an Ever Changing Competitive Environment/Customer
Requirements
Shifting
Shifting nature
nature ofof competitioncompetition due
due toto globalization
globalization inin markets
markets andandtechnological,
technological, productproduct andand processing
processing development
development(e.g. auto industry)SocialSocial Responsibility
Responsibility

Globalization
Globalization ofof Automobile
Automobile manufacturers
manufacturers

GlobalGlobal environmental
environmental problems
problems

Expansion
Expansion ofof overseas
overseas production
production

Light-weightLight-weight forfor fuelfuel efficiency
efficiency

Increase
Increase inin worldwide
worldwide launch
launch ofofautomobiles
automobiles (i.e.,(i.e., global
global models)models)Reduction
Reduction ofof pollutant
pollutant release
releasePursuitPursuit ofof collisioncollision safety
safetyReduction
Reduction in
in automobile
automobile development
development lead
lead timetime(4(4 years
years →
→ 11 year)
year)

Automobile
Automobile manufacturers
manufacturers areare requesting
requesting thatthat thethe steelsteel industry
industry develop
develop aa “global“global supply
supplystructure”
structure” asas wellwell asas maintaining
maintaining “highly“highly technicaltechnical products
products equallyequally on
on aa global
global basis.”
basis.”

Delivering
Delivering total
total solutions
solutions throughthrough collaboration
collaboration with
with automobile
automobile manufacturers
manufacturers
13

“Close-to-Customer” Capacities Promptly Responding to Needs such as“Just-in-Time” Production
MuroranNationwide order inflow in millions tons, （）regional weighting
actual figures for 1st Half 2002 （annualized base）
Hokkaido
1.58 (3%)

Source: Steel and metal demand monthly statistics
Chugoku
4.96 (9%)

Mazda

Kamaishi

Hirohata

HikariKyushu4.36 (7%)

Tohoku2.18 (4%)

Nissan Honda

YawataKimitsu
Kanto
18.6 (32%)

ToyotaToyotaNissan

Sakai
Oita

Tokai &
Hokuriku
13.14 (23%)

Honda

NagoyaKansai12.0 (20%)

14

I. - ③ Key Issues and Strategies

15

Key Issues & Strategies for Nippon Steel
IssuesDomestic
Domestic

Overseas
Overseas

・・Improvement
Improvement ofof market
market condition
condition

・Supporting
・Supporting overseas
overseas operations
operations ofofmajormajor domestic
domestic--Optimal
Optimalutilization
utilizationof
ofeacheachalliancealliancepartners’
partners’facilities
facilities

customers
customers
・Capitalizing
・Capitalizing onon thethe growing
growing Chinese
Chinese market
market・Improving
international
cost
competitiveness・Improving international cost competitiveness・・Reorganizing
Reorganizing cost
cost structure
structure-- Enhancing
Enhancing operating
operating cashflow
cashflow // blast
blast furnace
furnace capacity
capacity
・・Meeting
Meeting thethe increasingly
increasingly demanding
demanding customer
customer needs
needs
Strategies

Alliance
Alliance

Domestic:
Domestic: Sumitomo
Sumitomo Metals
Metals Industries,
Industries, Kobe
Kobe Steel,
Steel,
Aichi
Steel,
Mitsubishi
MuroranSteel,
Nakayama
Aichi Steel, Mitsubishi Muroran Steel, Nakayama
Steel
Steel Works,
Works, Sumitomo
Sumitomo ElectricElectric Industries
Industries
Overseas:
Overseas: Arcelor,
Arcelor, POSCO
POSCO

NipponNippon SteelSteel・Improvement
・Improvement inin Profitability
Profitability-- Alleviate
capacity
Alleviate capacity constraints
constraints at
at blast
blast furnaces
furnaces bybyintroduction
introduction ofof thinthin walls
walls-- ProductProduct mix
mix improvement
improvement due
due toto higher
higher value-added
value-added
products
andcost
reductionofcommodity
products and cost reduction of commodity products
products
・Responding・Responding toto Customer
Customer Needs
Needs-- Prompt
responsebyhavingPrompt response by having mills
mills close
close toto customer
customer locations
locations-- Joint
product
developmentwithcustomers
Joint product development with customers
・Harnessing
・Harnessing growth
growth momentum
momentum ofof thethe Asian
Asian market
market-- Investing
Investing inin local
local companies
companies andand expanding
expanding exports
exports

16

Global Alliance Network: Overseas Alliance Partners
Units: (‘000 tons)
I/N Tek
CRC 1,600

Arcelor

I/N Kote

POSCO

40％

CGL 500
EGL 400

3％50％

Bao Steel

Nippon Steel

36％

63％

40％

Tata
SUS
CRC 1,000

Strategic allianceJV under negotiations
JV with Nippon Steel(% of capital investment)
Technological alliance

SNP

UNIGAL

Electric resistancewelded pipe 60

CGL 400

SUS:
SUS: Siam
Siam United
United Steel
Steel
SNP:
SNP: Siam
Siam Nippon
Nippon Steel
Steel Pipe
Pipe

17

Note: Thin steel sheets for automobile use

Objectives of Strategic Alliances with Overseas Partners

ArcelorNipponNippon
Steel
Steel

POSCO

Bao
Bao Steel
Steel(joint venture under negotiations)・Global・Global Standardization
Standardization ofof Technology
Technology−− Supporting
Supporting overseas
overseas operations
operations ofof domestic
domestic automobile
automobile makers
makers−− Joint
Joint Research
Research

Arcelor:Arcelor: steel
steel sheets
sheets forfor automobiles
automobiles
POSCO:
technology
for
steel
POSCO: technology for steel processing
processing

・Establishing・Establishing close
close relationships
relationships with
with leading
leading overseas
overseas steel
steel makers
makers・Harnessing
・Harnessing growth
growth momentum
momentum ofof thethe Asian
Asian (China)(China) market
market18

Strategic Alliance with Domestic Partners

Alliance with Sumitomo
Metals Ind. & Kobe Steel・Mutual supply of slab and mutual
utilization of strip mill・Business integration throughestablishing joint ventures- Steel business with Sumitomo Metals
joint ventures
・Cooperation between Affiliates- Nippon Steel Sumikin Welding
Nippon Steel Bolten & Shinko Bolt

Aichi Steel・Hybrid electrical furnaceStrengthening
Strengthening
competitivenesscompetitiveness throughthroughbusinessbusiness alliancealliance
・Improving Market Condition
・Optimal utilization of facilities
between partners

・Optimal production throughcollaboration with major customers

Mitsubishi Muroran Steel・Optimal production

Nakayama Steel Works,
Sumitomo Electric Ind.

・Cooperation between Steel mills- Hirohata & Kakogawa, Kimitsu &Kashima・Support and cooperation for
efficient production

Streamlining Distribution
Channels・Nationwide processing & distribution
channel19

Domestic Steelmaking Facilities: History of Rationalization
Blast
Blast furnace
furnace
Basic
Basic oxygen
oxygen furnace
furnace（number（number ofof furnaces)
furnaces)
Electric
Electric furnace
furnace

Sakai
Sakai

MuroranMuroranＸ(2)（Hokkai Steel Works）

1990
Hikari
Hikari

Hirohata
Hirohata

Yawata）Yawata（3.6m（3.6m tons
tons
）

(4)

Ｘ

(1)

Kamaishi
Kamaishi

Ｘ

Ｘ

1993

1989

1988
Oita
Oita（8.2m（8.2m tons
tons））
Nagoya）Nagoya（5.72m（5.72m tons
tons）

Kimitsu）
Kimitsu（9.32m（9.32m tons
tons
）

(3)
(5)

Total
Total blast
blast furnaces:
furnaces: 13
13 units
units (1984)(1984) →→ 99 units
units (1993)(1993)(2)−− shifting
shifting toto large-volume
large-volume furnaces,
furnaces, while
while shutting
shutting down
down
small-volume
small-volume furnaces
furnaces(※(※）（）crude）（）crudesteel
steeloutput
outputas
asof
of1st
1stHalf
HalfFY2002
FY2002(annualized)(annualized)
×scrapped
blast
furnaceandyear
×scrapped blast furnace and year

Total
Total blast
blast furnace
furnace volume:
volume: 44,000㎥
44,000㎥ →→ 37,000㎥
37,000㎥
Average
Average inner
inner volume:
volume: 4,400㎥
4,400㎥ per
per unit
unit
20Expansion of Blast Furnace Inner Volume Contributing to High Efficiency
Blast
Blast Furnace
Furnace Relining
Relining Schedule
Schedule

3/1999

Nagoya Blast Furnace #3

3/2000Volume:Volume: 37,000m
37,000m33 →→ 40,000m
40,000m33
Average
Average furnace
furnace inner
inner volume
volume following
following
3
3
completion:completion: 4,700
4,700 mm per
per unit
unit
3/20013/20023/20033/2004Thin
Thin walls:
walls: raisingraising efficiency
efficiency
3/20054/2000

Furnace
Furnace inner
inner volume
volumeenhancement
enhancement

3(capacity 3,42 ４→4,300m )Kimitsu Blast Furnace #3-- Energy
Energy && laborlabor savings
savings-- Stabilizationofproduct
Stabilization of product quality
quality-- Increase
Increase longevity
longevity

5/200137,000m
37,000m33 →→ 40,000m
40,000m33(capacity 4,063→4,822m3)
Muroran Blast Furnace #2

11/2001

1m
1m tonton increase
increase inin steelsteel output
output(capacity 2,296→2,902m3)
Kimitsu Blast Furnace #4(Going(Going into
into effecteffect after
after FY2003)
FY2003)5/2003(capacity 5,151→5,555m3)

4/2004

Oita Blast Furnace #2

Reduction
Reduction ofof scrap
scrap iron
iron useuse
3(capacity 5,245→approx. 5,700m )ImpactImpact ofof relining
relining xx ¥20bn¥20bn(after
FY2003)(after FY2003)¥20bn¥20bn profit
profit impact
impact
21

《
《14%
14% →
→ 77％
％》
》
(return(return balance)balance)¥10bn¥10bn profit
profit impact
impactII. Medium-Term Financial Goals(FY2003 - FY2005)22

Medium-Term Financial Goals: Key Highlights
・Increase・Increase overall
overall recurringrecurring profit
profit mainly
mainly fromfrom improvements
improvements inin steelsteel businessbusiness−− FromFrom ¥68bn¥68bn inin FY2002
FY2002 toto ¥250bn¥250bn in
in FY2005
FY2005 (improvements(improvements inin steelsteel businessbusiness :: ¥180bn)¥180bn)・Reduce・Reduce overall
overall assets
assets andand leverageleverage while
while strengthening
strengthening equity
equity basebase−
− Reducing
Reducing total
total interest-bearing
interest-bearing debt
debt fromfrom ¥1,871bn¥1,871bn inin FY2002
FY2002 toto ¥1,600bn¥1,600bn inin FY2005
FY2005−− Resulting
Resulting inin decreasing
decreasing debt/equity
debt/equity ratio
ratio fromfrom 2.4x
2.4x inin FY2002
FY2002 toto 1.6x
1.6x inin FY2005
FY2005−− Reducing
Reducing total
total assets
assets fromfrom ¥3,757bn¥3,757bn inin FY2002
FY2002 toto ¥3,700bn¥3,700bn inin FY2005
FY2005・Thus,
・Thus, increasing
increasing Return-On-Sales
Return-On-Sales (ROS)(ROS) andand Return-On-Assets
Return-On-Assets (ROA)(ROA)
・Tight・Tight control
control over
over capital
capital expenditure
expenditure vis-à-vis
vis-à-vis depreciation
depreciation

23

Medium-Term Financial Goals: Assumptions & Financial Targets＜Consolidated＞＜Consolidated＞

FY2002
FY2002

FY2005(E)FY2005(E)ChangeChangeFY2003(E)FY2003(E)Recurring
Recurring Profit
Profit

¥68bn
¥68bn

¥250bn¥250bn++ ¥181bn¥181bn¥140bn¥140bnReturnReturn on
on SalesSales (RP/Sales)(RP/Sales)

2.5％
2.5％

9％
9％

+6.5%
+6.5% points
pointsReturnReturn on
on Assets
Assets ※1
※1

2.6％
2.6％

9％
9％

+6.4%
+6.4% points
points

Total
Total Assets
Assets¥3,757bn¥3,757bn¥3,700bn¥3,700bn-- ¥57bn
¥57bn

Total
Total Interest-bearing
Interest-bearing Debt
Debt

¥1,871bn¥1,871bn¥1,600bn¥1,600bn-- ¥271bn¥271bnShareholders’Shareholders’ Equity
Equity¥789bn¥789bn¥1,000bn¥1,000bn++ ¥211bn¥211bnNumberNumber ofof Employees
Employees

47,20047,20044,60044,600-- 2,600
2,600

Crude
Crude Steel
Steel Output
Output (※2)
(※2)
Sales
Sales

29.9m
29.9m tons
tons
¥2,749bn¥2,749bn

29
29 mm tonstons¥2,900bn¥2,900bn

ExportExport Ratio
Ratio (※2)(※2)
Foreign
Foreign Exchange
Exchange Rate
Rate

32%
32%

34%
34%

¥122／$¥122／$
0.1
0.1 ％％¥¥ 110／$
110／$
22 ％
％

¥1,800bn¥1,800bn＜Assumptions＞＜Assumptions＞

Interest
Interest Rate
Rate（TIBOR（TIBOR））

24(※1) ROA= RP excluding Interest Expense/Total Assets(※2) based on non-consolidated accountMedium-Term Financial Goals: Details of Profit Improvement
Key
Key profit
profit improvement
improvement driver:driver: steel
steel businessbusiness
FY2002¥182bn increase¥68bn

Improvement in Steel Business : ¥180bn

FY2005¥250bn（excludes alliance effects ）ImpactImpact onon Ordinary
Ordinary Profit
ProfitPricing
Pricing && product
product mix
mix++ ¥30bn¥30bn･･ Improved
Improved pricing
pricing・Better
product
・Better product mix
mix -- shifting
shifting toto moremore value-added
value-added products
products

Foreign
Foreign exchange
exchange raterate-- ¥10bn¥10bn

１，７５０億円増

Cost
Cost reductions*
reductions*++ ¥130bn¥130bn･･ Effects
Effects ofof relining
relining ofof blast
blast furnaces:
furnaces: ¥30bn¥30bn(reductionofscrap
usage:¥10bn)(reduction of scrap usage: ¥10bn)(elimination(elimination ofof temporary
temporary suspension
suspension problems
problems i.e.
i.e. HMR
HMR &&inventories:
inventories: ¥20bn)¥20bn)
・・Procurement
Procurement cost
cost (e.g.,(e.g., raw
raw materials)
materials) :: ¥30bn¥30bn
・・LaborLabor productivity
productivity (10%(10% improvement)
improvement) :: ¥20bn¥20bn
・・Depreciation:
Depreciation: ¥15bn¥15bn
・
Others(improved
・ Others (improved yield
yield rates
rates andand unit
unit productivity)
productivity) :: ¥35bn
¥35bn

Group
Group companies
companies++ ¥30bn¥30bn･･ Integration
Integration effects
effects (Nippon(Nippon Steel
Steel Sumikin
Sumikin Stainless
Stainless Steel,
Steel, etc.)
etc.)
・Operational
improvements(overseas
subsidiaries,
etc.)
・Operational improvements (overseas subsidiaries, etc.)*¥220bn in actual total cost reductions achieved in 3 years (¥60bn in FY2000, ¥80bn in FY 2001 & ¥80bn in FY2002)

25

Medium-Term Financial Goals: Cash Flow Target
Generating
Generating FCF
FCF forfor enhancing
enhancing balancebalance sheet
sheet andand international
international competitivenesscompetitiveness
Cash
Cash Flow
Flow Target
Target3-year3-year cumulative
cumulative total
total¥580bn¥580bnRecurring
Recurring Profit
ProfitCapitalCapital expenditure
expenditure (cash(cash out)out)

- ¥430bn¥430bnDepreciation
Depreciation¥560bn¥560bnNet
Net proceeds
proceeds fromfrom capital
capital outlay
outlay¥130bn¥130bnInvesting
Investing && financing
financing activities
activities- ¥80bn¥80bn

Effects
Effects ofof asset
asset reduction
reduction

¥80bn
¥80bn

Corporate
Corporate taxes,
taxes, dividends
dividends && others
others- ¥350bn¥350bn¥360bn¥360bnConsolidated
Consolidated Cash
Cash Flow
Flow26