JFE Holdings’ Financial Results for Fiscal Year 2017
ended March 31, 2018
— All financial information has been prepared in accordance with generally accepted accounting principles in Japan. —(Note: The following is an English translation of an original Japanese document.)

April 26, 2018
Official name:
Listings:
Code:
English URL:
Representative:
Contact:

JFE Holdings, Inc.
Tokyo and Nagoya stock exchanges
5411
www.jfe-holdings.co.jp/en
Eiji Hayashida, President and CEO
Hidetsugu Tawara, Manager, Public Relations Section,
Investor Relations and Corporate Communications
Department
Phone:+81-3-3597-3842
Annual shareholders meeting (planned)
June 21, 2018
Dividend payment starting date:June 22, 2018
Scheduled date to submit securities report:
June 21, 2018
Preparation of supplementary materials for quarterly results: Yes
Quarterly results briefing:
Yes(Figures are rounded down to the nearest million yen.)

1. Consolidated Results in Fiscal 2017 (April 1, 2017 to March 31, 2018)(1) Consolidated Operating Results (cumulative total)
Year-onyearchangeNet
sales(million yen)

Operatingprofit(million yen)(%)

Year-onyearchange(%)

Year-onyearchangeOrdinary
profit(million yen)(%)

Profitattributable toowners ofparent(million yen)

Year-onyearchange(%)

FY 2017

3,678,612

11.2

246,669155.0

216,339155.3

144,638

112.9

FY 2016

3,308,992(3.6)

96,746

6.7

84,73531.9

67,939101.9

Note: Comprehensive income:149,602 million yen in FY 2017 (106.8%)
72,352 million yen in FY 2016 (-)

Net income
per share

Net income
per share(yen)(fully diluted; yen)

ROE
(%)

ROA

ROS

(ordinary profit
divided by total
assets; %)(operating profit
divided by net
sales; %)FY 2017250.86

-

7.6

4.9

6.7

FY 2016117.81

-

3.7

2.0

2.9

Note: Equity in earnings of affiliates: (8,732 million yen) in FY 2017
12,006 million yen in FY 2016
(2) Consolidated Financial Position
Total assets

Net assets

Equity capital ratio

Net assets per share(million yen)(million yen)

(%)

(yen)

FY 20174,460,903

2,006,563

43.6

3,375.82

FY 2016

4,336,069

1,921,809

43.0

3,235.88

Note: Shareholders' equity: 1,946,226 million yen as of March 31, 2018
1,865,836 million yen as of March 31, 2017(3) Consolidated Statement of Cash Flow(million yen)

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
the year

FY 2017

298,811(194,835)(90,998)

75,225FY 2016

185,481(163,799)(18,159)

69,383

2. Dividends
Dividend per share (yen)Total dividend
payoutInterim(million yen)

Year-end

Dividend payout
ratio (consolidated; %)Dividend per net
assets (consolidated; %)FY 2016

30.00

0.00

30.00

17,30325.5

0.9

FY 2017

80.00

30.00

50.00

46,13631.9

2.4

FY 2018(forecast)
Note: Total dividend payout for fiscal 2018 is yet to be determined.

-

3. Forecasts of Consolidated Financial Results in Fiscal 2018 (April 1, 2018 to March 31, 2019)Year-onyearchangeNet
sales(million yen)(%)

Year-onyearchangeOperatingprofit(million yen)(%)

Year-onyearchangeOrdinary
profit(million yen)(%)

Profitattributable toowners ofparent(million yen)

Year-onyearchange(%)

Net
income
per
share
(yen)

First Half

-

-

-

-

-

-

-

-

-

FY 2018

-

-

-

-

220,000

1.7

-

-

-

Notes
1. Significant changes in subsidiaries during the term (changes in designated subsidiaries resulting in changes in consolidated
structure): No
2. Changes in accounting policies, accounting estimates and restatements
1) Changes in the accounting policies resulting from amendments to accounting standards: No
2) Changes other than 1) above: Yes
3) Changes in accounting estimates: Yes
4) Restatements: No
Note: For details, see (5) Notes to Consolidated Financial Statement: “Changes in Accounting Estimates” and “Change in
Accounting Policies Difficult to Distinguish from Changes in Accounting Estimates” on page 13 of the attached document.
3. Number of outstanding shares (common stock)
1) Outstanding shares at the end of term (including treasury stock)
As of March 31, 2018: 614,438,399 shares
As of March 31, 2017: 614,438,399 shares
2) Treasury stock at the end of term
As of March 31, 2018: 37,919,494 shares
As of March 31, 2017: 37,829,548 shares
3) Average number of shares during the term (quarterly consolidated cumulative period)
FY 2017: 576,572,979 shares
FY 2016: 576,686,872 sharesThis report is not subject to auditing by a certified public accountant or an audit corporation.
Explanation of Appropriate Use of Results Forecasts, and Other Matters of Note
1. Forecasts are based on information available on the date of publication of this document as well as rational assumptions that
we have made regarding certain factors. Actual results may vary significantly from these forecasts due to a wide range ofcircumstances. For a description of the results forecasts, see “(4) Outlook for Fiscal 2018” on page 3 of the attacheddocument.
2. Notes to the financial results can be viewed at the JFE Holdings website.

Attachments
1. Qualitative Information··········································································································· 2(1) Overview of Business Results ···························································································· 2(2) Overview of Financial Position ···························································································· 3(3) Overview of Cash Flow in Fiscal 2017 ·················································································· 3(4) Outlook for Fiscal 2018 ····································································································· 3
2. Basic Rationale for Selection of Accounting Standards ································································· 5
3. Consolidated Financial Statements ·························································································· 6(1) Consolidated Balance Sheet ····························································································· 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ··········· 8Consolidated Statements of Income ···················································································· 8Consolidated Statement of Comprehensive Income ································································ 9(3) Consolidated Statement of Changes in Net Assets ································································10(4) Consolidated Statement of Cash Flow ················································································ 12(5) Notes to Consolidated Financial Statement·········································································· 13
Notes Pertaining to the Presumption of a Going Concern ························································ 13
Changes in Accounting Estimates ······················································································ 13
Change in Accounting Policies Difficult to Distinguish from Changes in Accounting Estimates ········· 13
Segment Information ······································································································· 14
Per-share Information······································································································ 16
Major Subsequent Events ································································································ 16
4. Reference ··························································································································1711. Qualitative Information(1) Overview of Business Results
JFE Holdings, Inc., guided by its corporate mission of contributing to society with world-leading
technology, continued to achieve sustainable growth and improved corporate value for shareholders
and other stakeholders.
In the Japanese economy in fiscal 2017, exports and corporate profits were solid, capital investment
increased, as did public investment amid economic stimulus measures, and the economy achieveda mild recovery. Overseas, the global economy recovered modestly as a whole and the United Statesin particular, although the outlook remained cloudy owing to uncertainties surrounding economic
policies in Europe and the United States, the risk of an economic downturn in China, risinggeopolitical risks and other factors.
Under JFE’s fifth medium-term business plan, the company worked steadily in Japan to improve its
manufacturing base and reduce costs to strengthen its domestic profit base, leverage its
technological advantages to develop new products and secure and nurture diverse human resources.
Overseas, JFE steadily expanded business from a mid- to long-term perspective. Due to such efforts,
both ordinary profit and profit attributable to owners of the parent company increased in FY 2017.
On a consolidated basis, both sales and profits were up year over year, with net sales coming to
3,678.6 billion yen, operating income 246.6 billion yen and ordinary income 216.3 billion yen. Despite
recording a gain on the sale of investment securities, an overall extraordinary loss of 2.9 billion yen
was booked owing to the impairment of non-current assets at JFE Steel’s Chita Works and otherfactors. Profit before income taxes was 213.3 billion yen and profit attributable to owners of theparent was 144.6 billion yen.
Operating results by segment were as follows.
Steel business: Annual crude steel production was 30.06 million tons, on par with the previous fiscal
year. Net sales increased to 2,715.4 billion yen as a result of ongoing efforts to improve steel prices.
Ordinary income increased sharply to 198.8 billion yen as a result of efforts to raise steel sales prices
and ongoing measures to improve earnings, despite a significant increase in costs as a result ofsurging coking coal prices since autumn 2016 and increases in prices of metals and costs of otherauxiliary raw materials, materials prices, distribution and the like.
Engineering business: The focus was placed on smoothly executing project orders received inprevious fiscal years while also pursuing new orders to expand the business. Orders grew as a result,but net sales were down to 391.3 billion yen owing to the timing of recognition of sales on ordered
projects. Ordinary income fell to 19.3 billion yen owing to declined sales and additional one-timecosts incurred at overseas plants, etc.
2

Trading business: Net sales increased to 1,907.9 billion yen as sales volume was boosted by efforts
to capture demand for steel materials in the automotive field and the Greater Tokyo area
redevelopment projects as well as better unit sales prices for steel products both in Japan and abroad.
Ordinary income rose to 33.0 billion yen on increased sales and stronger profitability at Group
companies in Japan and abroad.
In addition to the segment-based operating results mentioned above, an equity-method loss of 31.8
billion yen was recorded on equity-method affiliate Japan Marine United Corporation as the company
booked a loss due to delayed progress in certain construction projects and the effects of the strongyen.
(2) Overview of Financial Position
Total assets at the end of fiscal 2017 (March 31, 2018) increased from the previous year-end by
124.9 billion yen to 4,460.9 billion yen. This was mainly due to an increase in notes and accounts
receivable – trade. Liabilities increased by 40.1 billion yen to 2,454.3 billion yen, mainly due to anincrease in notes and accounts payable – trade. Net assets increased by 84.7 billion yen to 2,006.5
billion yen, mainly due to an increase in retained earnings.
(3) Overview of Cash Flow in Fiscal 2017
Net cash provided by operating activities amounted to 298.8 billion yen. Net cash used for investment
activities totaled 194.8 billion yen, largely for the purchase of non-current assets. Aggregate free
cash flow totaled 103.9 billion yen of income. Cash flows from financing activities came to 90.9 billion
yen, primarily for repayments on long-term loans.
Outstanding debt at the fiscal year-end was 1,330.9 billion yen, down 44.5 billion yen. The balanceof cash and cash equivalents increased by 5.9 billion yen to 75.2 billion yen.
(4)Outlook for Fiscal 2018
JFE Group forecasts consolidated ordinary income of 220.0 billion yen, similar to that of fiscal
2017.
Steel business: In Japan, we expect demand to remain solid overall as major redevelopment projects
in the Greater Tokyo area and projects related to the Olympic and Paralympic Games ramp up andactivity remains brisk in the automotive, industrial machinery and electrical machinery fields.
Internationally, we expect demand to remain solid overall in view of firm growth in many overseas
economies. Key raw material prices have been high level since autumn 2016 and earnings havebeen affected by rising costs in other areas, including auxiliary raw materials, other materials anddistribution. Despite factoring in increases in production and sales volumes and improved steel
3prices, we also expect increases in the cost of auxiliary and other materials and costs to improve
manufacturing base, based on which we forecast steel business ordinary income of 160.0 billion yen.
Fiscal 2018 is our sixth medium-term business plan’s inaugural year, so we will continue working to
improve manufacturing base, improve the product mix and develop overseas business in accordancewith our plans.
Engineering business: In view of strong order levels in fiscal 2017, we expect sales to rise as we
steadily execute existing project orders, and we expect to eliminate additional cost following the onetime increase in fiscal 2017. Accordingly, we forecast ordinary income of 25.0 billion yen.
Trading business: Market conditions are expected to remain solid both in Japan and abroad. We
forecast ordinary income of 33.0 billion yen, basically similar to that of fiscal 2017.

4

2. Basic Rationale for Selection of Accounting Standards
The JFE Group is reviewing and evaluating the differences between the International Financial
Reporting Standards (IFRS) and the Japan Generally Accepted Accounting Principles (JGAAP), as
well as the possible effects that adopting the IFRS might have on the Group, and the creation ofsystems to ensure IFRS implementation.

5

3. Consolidated Financial Statements(1) Consolidated Balance Sheet

As ofMarch 31, 2017

(million yen)
As ofMarch 31, 2018

69,936
798,058
313,368
50,834
408,728
169,336(1,416)
1,808,846

76,111
855,730
351,961
60,292
438,086
175,947(2,188)
1,955,942

406,450
654,918
496,678
59,982
32,8481,650,879
78,368402,598
699,324489,588
76,54434,191
1,702,248
83,724372,196
349,864
13,06765,800(2,953)797,975
2,527,222
4,336,069

325,413
312,880
18,08264,304(1,691)
718,988
2,504,961
4,460,903

AssetsCurrent assets:
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in progress
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property, plant and equipment:
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets:
Investment securities
Shares of subsidiaries and associates
Net defined benefit assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6

As ofMarch 31, 2017

(million yen)
As ofMarch 31, 2018446,645
204,379
8,000
50,000330,433
1,039,458

471,897285,542
6,000
15,000411,858
1,190,298

75,0001,038,089
9,118
123,745
128,848
1,374,801
2,414,259

80,000944,376
9,113
127,435
103,115
1,264,041
2,454,339

147,143646,582
1,126,633(178,853)
1,741,505

147,143646,639
1,208,448(179,070)
1,823,161

112,545(544)

91,359(186)
16,2889,791
5,812
123,065
60,3372,006,563
4,460,903

Liabilities and net assets
Current liabilities:
Notes and accounts payable - trade
Short-term loans payable
Commercial papers
Current portion of bonds
Other current liabilities
Total current liabilities
Non-current liabilities:
Bonds payable
Long-term loans payable
Deferred tax liabilities for land revaluation
Net defined benefit liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gains on securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

16,321(3,596)(395)
124,330
55,972
1,921,809
4,336,069

7

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statements of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income:Interest income
Dividend income
Rent income
Share of profit of entities accounted
for using equity method
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on retirement of non-current
assetsShare of loss of entities accounted
for using equity method
Other
Total non-operating expenses
Ordinary profit
Extraordinary income:Gain on sales of investment securities
Total extraordinary income
Extraordinary losses:
Impairment loss
Expenses for treatment of PCB waste
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

8

Fiscal 2016

(million yen)
Fiscal 2017

3,308,992
2,889,652
419,339
322,593
96,746

3,678,612
3,096,019
582,592
335,923
246,669

1,474
9,566
7,178

1,492
7,879
7,295

12,006
15,574

15,63645,80032,303

12,61313,02618,12918,35327,06857,811
84,735

8,732
22,521
62,633
216,339

30,14530,14529,38829,3889,408
9,408
105,472
23,3599,487
32,846
72,625
4,685
67,93928,4963,850
32,346
213,381
60,6162,777
63,393
149,987
5,349
144,638

Consolidated Statement of Comprehensive Income

ProfitOther comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income:(breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

9

Fiscal 2016
72,625(million yen)
Fiscal 2017
149,987

10,5493,192(6,747)
4,436(21,736)
(286)
234
5,657

(11,704)(273)
72,352

15,745(385)
149,602

67,9884,363

143,379
6,222

(3) Consolidated Statement of Changes in Net Assets
Fiscal 2016

(million yen)
Shareholders’ equity

Common stock
Balance at beginning of current
periodCapital surplus

147,143

Retained earnings

Treasury shares

1,065,037(178,654)

646,380

Total
1,679,906

Changes of items during period- Dividends(5,768)(5,768)- Profit attributable to owners ofparent67,93967,939- Acquisition of treasury stock- Disposal of treasury stock

(10)

(216)

(216)

16

6

0

0

- Change in treasury shares arisingfrom change in equity in entities
accounted for using equity method- Change of scope of consolidation--- Change of scope of equity method

(572)

(572)

- Change in ownership interest ofparent due to transactions with
non-controlling interests- Reversal of revaluation reserve forland- Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

202

202
8

147,143202
646,5828

61,596
1,126,633(199)(178,853)

61,5991,741,505

Accumulated other comprehensive incomeNet
unrealized
gains onsecurities
Balance at beginning of current
period101,709

Deferred
Revaluatio
gains orn reserve
losses on
for landhedges(3,119)16,328Foreigncurrencytranslation
adjustment
14,503Remeasurements ofdefinedbenefit plans(5,130)

NonTotal net
controllingassetinterests

Total

124,290

53,724 1,857,921

Changes of items during period- Dividends(5,768)- Profit attributable to owners ofparent67,939- Acquisition of treasury stock(216)- Disposal of treasury stock- Change in treasury shares arisingfrom change in equity in entities
accounted for using equity method- Change of scope of consolidation- Change of scope of equity method- Change in ownership interest ofparent due to transactions with
non-controlling interests- Reversal of revaluation reserve forland- Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

6
0
(572)
202
8
10,8352,575(6)(18,099)

4,735

40

2,248

2,288

10,8352,575(6)(18,099)

4,735

40

2,248

63,887

112,545(544)

16,321(3,596)(395)

124,330

10

55,972 1,921,809

Fiscal 2017

(million yen)
Shareholders’ equity
Common stock

Balance at beginning of current
periodCapital surplus

147,143

Retained earnings

Treasury shares

1,126,633(178,853)

646,582

Total
1,741,505

Changes of items during period- Dividends(34,605)(34,605)- Profit attributable to owners ofparent144,638

144,638- Acquisition of treasury stock- Disposal of treasury stock(4)- Change in treasury shares arisingfrom change in equity in entities
accounted for using equity method

(226)

(226)

10

5

0

0

- Change of scope of consolidation

34

34- Change of scope of equity method(28,257)(28,257)- Change in ownership interest ofparent due to transactions with
non-controlling interests- Reversal of revaluation reserve forland- Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

56

56
9

147,14356
646,639

81,814
1,208,448

9(216)(179,070)

81,655
1,823,161

Accumulated other comprehensive income
Net
Deferred
Revaluatio
unrealized gains or
n reserve
gains on losses on
for landhedgessecurities
Balance at beginning of current
period112,545(544)

16,321

Foreign
Remeasurecurrency
ments oftranslation
definedadjustment benefit plans(3,596)

(395)

Total

124,330

Noncontrollinginterests

Total net
asset

55,972 1,921,809

Changes of items during period- Dividends(34,605)- Profit attributable to owners ofparent144,638- Acquisition of treasury stock(226)- Disposal of treasury stock- Change in treasury shares arisingfrom change in equity in entities
accounted for using equity method- Change of scope of consolidation- Change of scope of equity method- Change in ownership interest ofparent due to transactions with
non-controlling interests- Reversal of revaluation reserve forland- Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

5034(28,257)56
9(21,186)

358

(32)

13,3886,207(1,265)

4,364

3,099
84,754(21,186)

358

(32)

13,3886,207(1,265)

4,364

91,359(186)

16,288

9,791

5,812

123,065

60,337 2,006,563

11

(4) Consolidated Statement of Cash Flow(million yen)
Fiscal 2017

Fiscal 2016
Cash flows from operating activities:

213,381

Profit before income taxes

105,472

Depreciation

182,638

159,562

Changes in allowance(6,241)(10,082)

Interest and dividend income(11,041)(9,372)

Interest expenses

12,61313,026

Decrease (increase) in notes and accounts receivable - trade(90,601)(37,059)

Decrease (increase) in inventories(17,070)(75,445)

Increase (decrease) in notes and accounts payable - trade16,262

2,713

Other

2,033

66,407

194,066

323,133

Sub totalInterest and dividend income received

16,324

16,326

Interest expenses paid

(12,486)(13,143)

Income taxes paid

(12,421)(27,504)

Cash flows from operating activities

185,481

298,811

Cash flows from investing activities:(226,327)(247,191)

Proceeds from sales of property, plant, equipment and intangible assets

1,992

2,893

Purchase of investment securities(9,676)(10,847)

Proceeds from sales of investment securities

69,90064,798Purchase of non-current assets

Other
Cash flows from investing activities

310(4,488)(163,799)(194,835)

Cash flows from financing activities:
Net increase (decrease) in short-term loans payable(5,425)

4,523

Increase (decrease) in commercial papers(28,000)(1,999)Proceeds from long-term loans payable291,232

378,474

Repayments of long-term loans payable(236,944)(397,502)

Proceeds from issuance of bonds
Redemption of bonds-

20,000(20,000)(50,000)

(216)

(226)

Payments for dividends by parent company(5,795)(34,510)Other(13,010)(9,757)

Cash flows from financing activities

Purchase of treasury shares(18,159)(90,998)

Effect of exchange rate change on cash and cash equivalents

1,861(7,059)Net increase (decrease) in cash and cash equivalents

5,384

5,917

Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting from change of scopeof consolidation
Cash and cash equivalents at end of period

63,87369,383125(75)

69,38375,22512

(5) Notes to Consolidated Financial Statement
Notes Pertaining to the Presumption of a Going Concern
There is no item for this period.
Changes in Accounting Estimates
Expenses for treatment of PCB waste
JFE Holdings has revised its estimated expenses for treatment of polychlorinated biphenyl (PCB)
waste due to improved treatment and estimation methods. In the consolidated financial statements
for fiscal year 2017, the difference between the previous and current estimates of expenses fortreatment of PCB waste as an extraordinary loss, resulting in a decrease of 3,850 million yen in net
income before income taxes.
Change in Accounting Policies Difficult to Distinguish from Changes in Accounting
Estimates
Change in Depreciation Method for Property, Plant and Equipment
In fiscal year 2017, JFE Holdings began primarily applying the straight-line method to depreciateproperty, plant and equipment (excluding leased assets) instead of the declining balance methodthat the company had been using primarily. The company made the change because its steelmaking
facilities are expected to enjoy stable production, as stated below, so the straight-line method wasdeemed more appropriate for allocating the costs of assets. The change in the depreciation method
increased operating profit by 26,102 million yen and both ordinary profit and profit before income
taxes by 27,399 million yen each.
The steel business is forecast to enjoy strong demand in Japan for some years to come, supported
by projects related to the Tokyo 2020 Olympic and Paralympic Games. In the long run, however,Japan’s declining birthrate and aging population are forecast to lead to reduced domestic demand,
making significant increases in steel demand unlikely. On a global basis, persistently excessive steel
production in China and other countries will continue to make the business environment extremely
harsh.
JFE Steel, rather than focusing on increased crude steel output, is striving to ensure stable steel
output and to cut costs at its steelworks in Japan, the company’s main production base. These
objectives are being achieved through capital investments to strengthen the manufacturing base inJapan and by making full use of existing steelmaking capacity. Investments specifically have focusedon renewing old facilities.
As of the end of the previous fiscal year, JFE Steel had renewed many upstream facilities, including
coke ovens, for improved mid- and long-term competitiveness and stabilized production.
JFE Steel will continue to strengthen its manufacturing base in Japan through lower costs, stableproduction and a product mix focused on high-grade steel for improved competitiveness.

13Segment Information
I.
1.

Previous fiscal year (April 1, 2016 to March 31, 2017)
Overview
The Group organized under JFE Holdings executed commercial activities through threeoperating companies—JFE Steel Corporation, JFE Engineering Corporation and JFE Shoji
Trade Corporation—in accordance with the characteristics of their respective businesses.
Consolidated reporting segments, one for each operating company, were characterized by theirconstituent products and services.
Each segment had its own respective products and services. The steel business produced andsold various steel products, processed steel products and raw materials, and provided
transportation and other related businesses, such as facility maintenance and construction. The
engineering business handled engineering for energy, urban environments, steel structures andindustrial machines, recycling and electricity retailing. The trading business purchased,
processed and distributed steel products, raw materials for steel production, nonferrous metal
products, and food, etc.

2.

Calculation methods for each reporting segment’s net sales, profit (loss), assets, etc.
Profits for each reporting segment shown below are ordinary profit. Inter-segment transactions
are those conducted between companies at market prices.

3.

Net sales, profit (loss), asset and other categories(million yen)
Reporting segment
Adjustments
Steel-Sales to externalclients-Internal sales ortransfer among
segments
Net sales

Engineering

Trading

Total

Amount inconsolidated
statement

1,500,929

416,220

1,391,842

3,308,992-

3,308,992

848,199

9,916

279,189

1,137,305(1,137,305)-

2,349,129

426,136

1,671,032

4,446,298(1,137,305)

3,308,992

Profit40,544

26,616

21,834

88,996(4,260)84,735

Assets3,723,479

390,445643,273

4,757,198(421,129)

4,336,069-Depreciation-Depreciation of
goodwill-Interest income

169,639

7,536

5,457

182,6335

182,638

0

1,331

1,815

3,146

-

3,146

1,334

71

405

1,811

(336)

1,474

-Interest expenses-Share of profit (loss)of entities
accounted forusing equity
method-Investment in equity
method affiliates-Increased amountof tangible andintangible assets

11,375352

1,533

13,261(647)

12,613

13,539970

1,225

15,735(3,729)12,006

268,161

8,351

10,454

286,968

56,661

343,630

217,443

10,8206,502

234,7661

234,768

Others:

14

II.
1.

Current fiscal year (April 1, 2017 to March 31, 2018)
Overview
There is no item for this period.

2.

Calculation methods for each reporting segment’s net sales, profit (loss), assets, etc.
There is no item for this period.

3.

Net sales, profit (loss), asset and other categories(million yen)
Reporting segment
Adjustments
Steel-Sales to externalclients-Internal sales ortransfer among
segments

Engineering

Trading

Total

Amount inconsolidated
statement

1,717,038

380,981

1,580,592

3,678,612-

3,678,612

998,436

10,367327,311

1,336,114(1,336,114)-

2,715,474

391,348

1,907,904

5,014,727(1,336,114)

3,678,612

Profit198,850

19,38633,070251,308(34,968)

216,339

Assets3,801,264

381,922710,620

4,893,806(432,903)

4,460,903-Depreciation-Depreciation of
goodwill-Interest income

146,163

7,537

5,858

159,5593

159,562

0

294

1,548

1,842

-

1,842

1,110

106

502

1,718

(226)

1,492

-Interest expenses-Share of profit (loss)of entities
accounted forusing equity
method-Investment in equity
method affiliates-Increased amountof tangible andintangible assets

11,321396

1,966

13,684(657)

13,026

20,546

1,039

1,426

23,012(31,744)(8,732)

262,658

9,515

12,317284,490

26,226

310,717

238,861

11,8596,569

257,2901

257,291

Net sales

Others:15

Per-share Information
FY 2016

FY 2017

Net assets per share

3,235.88 yen

3,375.82 yen

Net income per share

117.81 yen

250.86 yen

Note 1: Adjusted diluted per-share earnings were not listed since there were no diluted shares.
Note 2: Basis for calculations(Yen, unless indicated otherwise)
FY 2016
Total net assets
Amounts deducted from total net
assetsAttributable to:Non-controlling interests portion
Net assets at fiscal year-end
applicable to common shares
Number of common shares at fiscal
year-end used in calculating net
assets per share
Profit attributable to owners of parent
Value not attributed to common shares
Profit attributable to owners of parent
attributed to common shares
Average number of outstanding
common shares during period

FY 2017

1,921,809 million

2,006,563 million

55,972 million

60,337 million

55,972 million

60,337 million

1,865,836 million

1,946,226 million

576,608 thousand shares

576,518 thousand shares

67,939 million

144,638 million--

67,939 million

144,638 million

576,686 thousand shares

576,572 thousand shares

Major Subsequent Events
There is no item for this period.

16

4. Reference(1) Consolidated Results(billion yen)
Fiscal 2016

Fiscal 2017

Fiscal 2018 Fullyear Forecasts

Change3,308.9

3,678.6

369.7

11.2%

2,349.1

2,715.4

366.3

15.6%

426.1

391.3

(34.8)(8.2%)

Trading business

1,671.0

1,907.9

236.9

14.2%

Adjustments and others(1,137.3)(1,336.1)(198.8)-Net sales
Steel businessEngineering business

Operating profit

96.7

246.6

149.9

155.0%(12.0)(30.3)(18.3)

-

84.7

216.3

131.6

155.3%

220.0

Steel business

40.5

198.8

158.3

390.9%

160.0

Engineering business

26.6

19.3

(7.3)

(27.4%)

25.0
33.0
-

Non-operating income (expenses)
Ordinary profit

Trading business

21.8

33.0

11.2

51.4%

Adjustments and others(4.2)(34.9)(30.7)-

Extraordinary income

20.7

(2.9)

(23.6)(114.0%)

Profit before income taxes

105.4

213.3

107.9

102.4%(37.5)(68.7)(31.2)

-

67.9

144.6

76.7

112.9%Tax expense and profit attributable tonon-controlling interests
Profit attributable to owners of parent(2) Consolidated Financial Indices

Return on Sales (ROS)1
Return on Assets (ROA)2
Return on Equity (ROE)3
EBITDA4
Debt Outstanding
Shareholders' Equity
D/E Ratio5

Fiscal 2016

Fiscal 2017

Change

2.6%
2.3%
3.7%
279.9 billion yen
1,375.4 billion yen
1,865.8 billion yen
51.4%

5.9%
5.2%
7.6%
388.8 billion yen
1,330.9 billion yen
1,946.2 billion yen
58.2%

3.3%
2.9%
3.9%
108.9 billion yen(44.5 billion yen)
80.4 billion yen
6.8%

1

ROS = Ordinary profit / Net sales
ROA = (Ordinary profit + Interest expenses / Total assets [average])
3 ROE = Profit attributable to owners of parent / Shareholders' equity
4 EBITDA = Ordinary profit + Interest expenses + Depreciation
5 D/E ratio = Debt outstanding / Shareholders' equity. For debt having a capital component,* a portion of its
issue price is deemed to be capital, as assessed by rating agencies.
2-Debt having a capital component (subordinated borrowings)
Borrowing Execution Date Amount Borrowed Assessment of Equity
Content
March 18, 2013
300.0 billion yen
75%
June 30, 2016
200.0 billion yen
25%
March 19, 2018
300.0 billion yen
25%

Amount Deemed to be
Capital225.0 billion yen*50.0 billion yen
75.0 billion yen*

*Subordinated borrowings procured on March 18, 2013 were repaid before maturity in March 19, 2018 and new subordinated borrowings
were procured on the same day.

17

(3) Crude Steel Production (JFE Steel)
FY 2016

Non-consolidated
Consolidated

1Q
6.94
7.52

2Q
7.06
7.62

1H
14.00
15.14

3Q
7.12
7.66

4Q
7.02
7.61

(million tons)
2H
Full year
14.13
28.14
15.27
30.41

FY 2017

Non-consolidated
Consolidated

7.12
7.53

6.98
7.38

14.10
14.91

7.23
7.63

7.14
7.52

14.37
15.15

(4) Shipments (JFE Steel on non-consolidated basis)

28.46
30.06

1Q

2Q

1H

3Q

4Q

(million tons)
2H
Full year

FY 2016

6.26

6.34

12.60

6.43

6.68

13.10

25.70

FY 2017

6.14

6.28

12.42

6.38

6.50

12.88

25.30

(5) Export Ratio on Value Basis (JFE Steel on non-consolidated basis)
1Q

2Q

1H

3Q

4Q

2H

(%)
Full year

FY 2016

43.6

44.1

43.9

43.3

44.9

44.2

44.0

FY 2017

42.1

44.2

43.2

45.1

45.9

45.5

44.4

1Q

2Q

1H

3Q

4Q

2H

(JPY/USD)
Full year

FY 2016

111.1

103.5

107.3

106.1

114.3

110.2

108.8

FY 2017

111.5

110.9

111.2

112.6

109.7

111.2

111.2

(6) Foreign Exchange Rate (Yen/US dollar)(7) Average Selling Price (JFE Steel on non-consolidated basis)
1Q

2Q

1H

3Q

4Q

(thousand yen/ton)
2H
Full year

FY 2016

58.5

58.6

58.6

61.5

72.0

66.8

62.8

FY 2017

74.4

73.3

73.8

77.0

76.5

76.8

75.3

(8) Engineering Business Orders (including inter-segment transactions)a. Orders received
Field
Environment
EnergyInfrastructure, others
Total(billion yen)
FY2016
157.4
148.9
118.1
424.4

FY2017
234.2
126.9
134.4
495.5

End of
FY2016600.0

End of
FY2017
691.9

Change76.8(22.0)
16.3
71.1(billion yen)b. Orders backlog

Change91.9(9) Debt Outstanding, Interest Expense, and Cash and Deposits(JFE Holdings, consolidated basis)
Debt outstanding
As of(billion yen)March 31, 2017
1,375.4
March 31, 2018
1,330.9
Cash and deposits
As of(billion yen)March 31, 2017
69.9
March 31, 2018
76.1

Interest expense
FY 2016
FY 2017

18(billion yen)
12.6
13.0

(10) Capital Investment and Depreciation Cost (JFE Holdings, consolidated basis)
FY 2016

FY 2017

Capital investment

234.7

257.2

Depreciation

182.6

159.5

(billion yen)(on construction basis)(11) Breakdown of Changes in Ordinary Income
a. FY 2017 vs. FY 2016(billion yen)

Ordinary income

Change131.6

FY 2016
84.7

FY 2017
216.3

Steel business--

Cost reductions
Sales volume, sales prices
and raw materials prices
Unrealized gains oninventories and others
Change in depreciation
methodOthers

45.0

123.0
(1.0)
27.4
(36.1)

Total steel business

158.3

Engineering business(7.3)

Trading business

11.2

Adjustment amount(30.7)

Increases in metal and other auxiliary raw
material prices, materials prices andamortization expenses, and disposal loss due toinfrastructure development
Additional costs for new products and overseas
construction, and impact of decreased sales inenergy field.
Increased profit from higher steel prices andimproved profitability of overseas groupcompanies.
Reduced profitability of shipbuilding and theother affiliated companies accounted for byequity method due to delayed progress incertain construction projects, the strong yen andtransient effects such as reverse deferred tax
assets.

b. FY 2018 forecast vs. FY 2017 actual: Largely unchanged
ChangeOrdinary income
Steel business-

Cost reductions
Sales volume, sales prices
and raw materials prices
Metals, materials andothersCost of improving
manufacturing base
Unrealized gains oninventories and others
OthersTotal steel business
Adjusted total for engineering andtrading businesses

20.0
40.0

(50.0)(30.0)(5.0)(45.0)(40.0)
40.0
###

19

*approximate estimate
FY 2017(billion yen)
FY 2018

216.3

220.0*