Securities Code：5411.T

JFE Group
Financial Results for First Quarter of
Fiscal Year 2022 ending March 31, 2023

JFE Holdings, Inc.
August 3, 2022

JFE-HD

Key Points of today’s Announcement
Resultsfor 1Q of
FY2022• Business profit in 1Q of FY2022 was ¥116.6bn.(increased by ¥28.3bn. year-on-year)
due to selling price improvements and inventory valuation gain because of therising price of coking coal, etc.
• Full-year business profit is expected to be ¥235.0bn.
(decreased by ¥181.4bn. year-on-year)• The current business environment has been significantly worse than the previous
fiscal year due to the prolonged Ukraine situation.(falling overseas steel market, risingcommodity prices and a sharp depreciation of the yen)

Forecastof
FY2022• The supply-demand balance is expected to recover gradually from now on. However it isnecessary to monitor carefully the trend of steel production and steel demand in
China, and the impact of auto production due to a shortage of the parts supply.
• In the steel business, despite the severe business environment, initiatives for
improvement in earnings, such as price improvement, are in progress.
• In the engineering and trading businesses, earnings are expected to remain stable despite
rising commodity prices.

Dividends

CarbonNeutral• The Board of Directors has decided to pay an interim dividend of 40 yen per share.
The year-end dividend has been still pending.
• Organize the roadmap for realizing carbon neutrality in 2050 and arrange the emission
reduction structure.
• A briefing session will be held to explain the details.(In Japanese)[Scheduled for Sep.1st, 2022 ]2

A table of contents
 JFE Holdings’ Financial Results for First Quarter of Fiscal
Year 2022 (April 1 to June 30, 2022) and Financial
Forecasts for Fiscal Year 2022 (April 1, 2022, to March 31,
2023)
 Dividends
 Financial Results for First Quarter of Fiscal Year 2022 andFinancial Forecast for Fiscal Year 2022 by Segment
 Topics
Appendix 1: Profit/Loss Analysis
Appendix 2: Business Environmental Indicators, etc.
Appendix 3: The 7th Medium-Term Business Plan
This presentation material is for information and discussion purpose only.
Any statements in the presentation which are not historical facts are future projections based on certain
assumptions and currently available information. Please note that actual performance may vary significantly due tovarious factors.

3

Consolidated Results for First
Quarter of Fiscal Year 2022
(April 1 to June 30, 2022)
andConsolidated Financial Forecast
for Fiscal Year 2022
(April 1, 2022 to March 31, 2023)

4

JFE-HD

Financial Results and Forecast for Fiscal Year 2022

 Business profit in 1Q of FY2022 was ¥116.6bn.(increased by ¥28.3bn. year-on-year)
 Full-year revenue is expected to be over ¥5 trillion., and full-year businessprofit is expected to be ¥235.0bn.(decreased by ¥181.4bn. year-on-year)

FY2021 Actual（billion yen）

1Q
(Apr-Jun)

FY2022 Forecast

1H

Full Year

1Q(Apr-Jun)

Change1H

Full Year

1Q(Apr-Jun)

1H

Full Year

Revenue

888.9

1,942.9

4,365.1

1,253.6

2,610.0

5,370.0

364.7

667.1

1,004.9

Business Profit

88.3

198.8

416.4

116.6

165.0

235.0

28.3

(33.8)(181.4)

Finance Income/Costs

(2.9)

(5.6)

(11.6)(3.2)(10.0)(15.0)

(0.3)

(4.4)

(3.4)

Segment Profit

85.4

193.2

404.8

113.4

155.0

220.0

28.0

(38.2)(184.8)--(16.2)

-

-

-

-

-

16.2

Profit before Tax

85.4

193.2

388.5

113.4

155.0

220.0

28.0

(38.2)(168.5)Tax Expense andProfit (Loss)
Attributable to NonControlling Interests(23.4)(52.4)(100.4)(29.5)(55.0)(80.0)

(6.1)

(2.6)

20.4

Profit Attributableto Owners of
Parent

61.9

140.7

288.0

83.8

100.0

140.0

21.9

(40.7)(148.0)Exceptional Items

Business profit is profit before tax excluding financial income and one-time items of a materially significant value. Segment profit is profit
including financial income in business profit.

5

JFE-HD

Financial Results and Forecast for Fiscal Year 2022
(by Segment)
FY2021 Actual（billion yen）

1Q
(Apr-Jun)

FY2022 Forecast

1H

Full
Year

1Q
(Apr-Jun)

1H

Full
Year

Change1Q(Apr-Jun)

1H

Full
Year

Steel Business

638.5

1410.4

3,173.4

932.6

1975.04,100.0

294.1

564.6

926.6

Engineering
Business

103.0

229.2

508.2

98.2

230.0

520.0

(4.8)

.8

11.8

Trading
Business

261.6

544.4

1,231.7

379.5

750.0

1,470.0

117.9

205.6

238.3

Adjustments(114.2)(241.1)(548.3)(156.8)(345.0)(720.0)(42.6)(103.9)(171.7)888.9

1942.94,365.1

1,253.6

2610.05,370.0

364.7

667.1

1,004.9

88.3

198.8

416.4

116.6

165.0

235.0

28.3

(33.8)(181.4)

(2.9)

(5.6)

(11.6)(3.2)(10.0)(15.0)

(0.3)

(4.4)

(3.4)

Steel Business

69.7

158.5

323.7

93.0

120.0

150.0

23.3

(38.5)(173.7)

Engineering
Business

4.2

11.1

26.0

(1.2)

4.0

20.0

(5.4)

(7.1)

(6.0)

Trading
Business

11.5

25.6

55.9

21.1

35.0

55.0

9.6

9.4

(0.9)

Adjustments

(0.0)

(2.0)

(0.9)

0.4

(4.0)

(5.0)

0.4

(2.0)

(4.1)

85.4

193.2

404.8

113.4

155.0

220.0

28.0

(38.2)(184.8)

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

Segment Profit
(A+B)

6

JFE-HDBusiness Environment and Earnings in the first Half of FY2022
 The current business environment has been significantly worse than the previous fiscal
year when the steel market was strong.
Despite zero-COVID policy constraints on economic activity, maintaining high steel production in China has
led increasing in inventory and a falling global steel market.
Further rising commodity prices due to the Ukraine situation and a sharp depreciation of the yen.

 Despite severe business environment, initiatives for rising steel price are expected to reachsignificant level in the first half of FY2022.
Continuing initiatives for improving earnings in the second half and beyond.
(yen/$)

217.5

140
130
120

Exchange Rate（yen/$）

Steel
Business
Inventory
Valuation etc.

110
100

500
400

300
200

Engineering
Business
Trading
Business etc.

52.3

Import Price Index(Apr 2018＝100)

100
80

0

Rising raw
material cost

Steel
Business

Excluding Inventory
Valuation etc.

61.2

2H FY2021

FY2018 FY2019 FY2020 FY2021 FY2022

Steel businessSubsidiary companies(36.0)

Reclining in earnings
due to depreciationof the yen

100

120

165.0

54.0
104.0

($/t)

Metal Spread
($/t)

140

Business Profit(billion yen)

(156.0)

109.0
84.0

Engineering, Trading business etc.
(7.3)

Improving
selling price etc.

＋141.845.0
11.0
1H FY2022

Forecast 7

JFE-HD

Trend of Supply-Demand in China
 In the first half of CY2022, crude steel production continued to increase in anticipation to theChinese government’s economic stimulus measures.
The steel market in China deteriorated and exports increased due to sluggish domestic
steel demand affected by constraints on economic activity due to zero-COVID policy.
 The Chinese government keeps its policy of curbing crude steel production. Therefore crude
steel production in the second half of CY2022 is expected to be reduced.
The domestic steel demand and steel market are expected to recover due to theGovernment’s economic stimulus measures.
China : Crude steel production and Exports
（Mｔ）

110
105
100

95
90

Government
policy for crude
steel production
to be lower thanCY2021

Crude steel
Production

Crude steel
production

1,033Mt

1,053Mt

CY2020Ave. 88Mt
per month18

CY2022

CY2021

CY2020($/t)

CY2021
Ave. 86Mt
per month

85

15

850

HRC Price

800
750

（Mt）

Crude steel production（Left axis）

80

950
900

To meetgovernment target
CY2022Jul-Dec
12
Ave. 84Mt permonth (Approx.)

CY2022 Jan-Jun
Ave. 88Mt
Per month

China : Steel market price9

Export（Right axis）

75

700
650

70

6

600

2020

2022

.

.

.

Jun

May

Apr

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Jul

2021

Aug

Jun

Apr

May

Mar

Jan

60

Feb

65
3

550

500
2021.1 2021.4 2021.7 2021.10 2022.1 2022.4 2022.7 2022.10※HRC Price：Average price in 5 cities in China

8

JFE-HD

Initiatives for Improving Sales Price in the first Half of FY2022



In order to achieve the target of the mid-term plan –Shifting Focus from Quantity to Quality-,
we have made further efforts to proceed with the price improvement initiatives.



Reflections of key raw material cost to sales price are expected to realize without delay, including theimpact of depreciation of the yen.
Reflections of other raw material cost are also expected to proceed at a certain level but it is not
sufficient. It is necessary to continue making efforts.



We will continue to improve sales price to reach the target of the mid-term plan (Per-ton profit 10,000yen/ton)

Average Sales Price(000yen/t)

Progress in Rising Pricein the 1st Half of FY2022(000yen/t)

150

Further price increases
are planned by
the end of Sept. 2022

140
130
120
110

100

 Quick reflection of raw
material cost to sales price
Other Raw
Materials
Rising partfrom past

Historical High109,000yen/t（2008）

Rising
Seles
Price

90
80

Key Raw
Materials
Risingpart from4Q FY2021
to 1H FY2022

19.1Q
2Q
3Q
4Q
20.1Q
2Q
3Q
4Q
21.1Q
2Q
3Q
4Q
22.1Q
2Q

Forecast

70

Sales Price

Initiatives to Improve
our Sales Price

Cost Increase

Make effort to quickly and steadily
pass on the cost increase of key
raw materials to the sales prices.

 Overhaul of extra pricing

Already realized some part of extra
revision. Accelerate overhaul tomodify the extra pricing which isinappropriate to the current status.

 Sales price improvement tothe sustainable level
Improve sales prices to thesustainable level even among thelong-term/continuous contracts if
the margin is not enough.

9

Dividends

10JFE-HD

Dividend JFE Holdings has decided to pay an interim
dividend of 40 yen per share at its Board of Directors.
 A decision regarding the year-end dividend has been postponed
while the company carefully monitors its ongoing performance.
160

Pay-out Ratio

31.9%

33.5%

N/A

N/A

28.0%

-

140
Interim devidend

120

Year-end dividend

100
Pending:Year-end
dividend

80
60
40
20
0
FY2017FY2018FY2019FY2020

FY2021

FY202211

JFE Steel
Financial Results for First Quarter of
Fiscal Year 2022 andFinancial Forecast for Fiscal Year 2022

12

JFE Steel

Financial Forecast for Fiscal Year 2022
FY2022 Forecast

FY2021
Unit
1Q

Full
year

1Q

2Q

1H

2H

Full
year

ChangeYear-on-Year
Full
1Q
year

Revenuebillionyen

638.5

3,173.4

932.6

1,042.4

1,975.0

2,125.0

4,100.0

294.1(926.6)

Segment
Profitbillion
yen

69.7

323.7

93.0

27.0

120.0

30.0

150.0

(23.3)(173.7)billion
yen

25.7

129.7

(230)

34.0

11.0

17.0

28.0

(48.7)(101.7)

Crude Steel(Standalone)

6.25

25.88

6.43

Approx.

Less thanLess than

Mt

Less than

Crude Steel(Consolidated)

Approx.
Mt

6.59

27.26

6.77

Approx.

Shipment(Standalone)

Mt

5.26

22.38

5.54

Export Ratio on Value
Basis（Standalone）

%

43.2

45.5

48.5

Average Sales Price(Standalone)

000
yen
/ｔ

87.6

103.7

126.7

Exchange Rate

¥/$

109.8

112.1

126.5

ExcludingInventory
Valuation etc.*

6.50
6.90

Approx.

6.00

Approx.

47

13.0

11.50

Approx.

1.8

2.8

48

5.3

130

39.1

Approx.

Approx.

131

ー

1.8

Approx.

Approx.

136

26.00

13.70

Approx.

134

13.0

Approx.

135

Approx.

133

16.7

Approx.

21＊Excluding inventory valuation, carry over of raw materials and foreign exchange valuation from segment profit

13

JFE Steel23.3bn. Increase in JFE Steel’s Segment Profit(FY2021.1Q (Actual) vs. FY2022.1Q (Actual))（ billion yen ）JFE SteelSegment
Profit

1Q

2Q

3Q

4Q

Full Year

1Q

ChangeFY2021.1Q→
FY2022.1Q

69.7

88.8

93.5

71.7

323.7

93.0

＋23.3

FY2021

1. Cost+5.0

2. Volumeand Mix+1.0

3. Sales and
Raw materials±0.0

4. Inventory
valuation
5. Others

FY2022• Capital investment effect etc.

+72.0

• Inventory valuation+33.0 (+28.0→+61.0)• Carry over of raw materials +22.0（+15.0→+37.0)• Foreign exchange valuation ＋17.0 (+1.0→+18.0)(54.7)• Foreign exchange effects on trade -20.0 etc.

14

JFE SteelCurrent Business Environment（Domestic）
In the automotive sector, the decline in auto production has been prolonged due to the remaining
constraints on parts supply.
The COVID-19 has gradually subsided in China, the supply chain activity level is expected to gradually
recover toward the second half of FY2022, and steel supply and demand is expected to becometight.
It is necessary to carefully monitor whether soaring prices will delay demand in each sector.
Outlook for

Trends

10.5%20.0%
6.1%
3.5% 2.3%
-3.4%

0.0%
0.9%
-0.6%
-1.7%
-1.1%
-0.4%
-2.9%
-1.3%
-20.0%-6.6%
14.0-17.4%
Construction(Mｔ) -31.7%-40.0%
12.0
10.5
10.0
8.0

11.2 11.1

10.8 10.6

11.3 11.2

10.6

9.4

11.1
-60.0%• Demand for steel products will remain firm but will only recovermoderately.
• Maritime trade volume and charter fees remain firm.
• Domestic shipbuilding companies have recovered their contract
balance, but due to rising material costs and labor shortages,
they build with their current capabilities.
• Steel demand is expected to recover moderately.
• Demand for non-residential products remain strong, supported bydemand from distribution warehouses and semiconductor
plants.
• Housing use is expected to decline slightly due to the suspensionof housing acquisition support measures and rising material costs.

Civil engineering

16.0 -6.3%

1.1%-9.0%-0.6%• Although product demand itself is firm, production activities
have been restrained due to supply constraints of components
such as semiconductors.
• Supply constraints are expected to ease gradually toward thesecond half of FY2022.

Building(Change YonY）

40.0%

Manufacturing

Shipbuilding

18.0

29.4%

Automobile

20.0
Domestic Ordinary Steel Consumption• Steel demand is expected to decrease slightly from the previous
year.
• In the public sector, activity levels are expected to be
maintained at a high level by securing a high level of budget,
but steel consumption is expected to decrease slightly from theprevious year.
• Activity levels in the private sector are expected to rise on theback of a recovery in capital investment.
15-80.0%
OthersManufacturing-100.0%Automobiles-120.0%

6.0

Shipbuilding-140.0%

4.0
2.0
0.0

Construction-160.0%

Building

Civil -180.0%
engineering-200.0%Source: Ministry of Economy, Trade and Industry, “Outlook for SteelConsumption” 14 July 2022. (FY2021.3Q and after is estimated results)

JFE SteelCurrent Business Environment（Overseas）
 As the global economy recovers, overseas demand for steel products continues to recover.
 Demand for steel products is currently weak, but due to the end of the rainy season in Asiaand economic stimulus measures by the Chinese government, demand for steel products is
expected to recover a certain degree, and market conditions are expected to improve.
Real GDP Growth Forecast in 2022

Automobile Sales by Quarter（Arrows indicate changes from the previous forecast）（million units）

2020

0.20
Apr-Jun

Ave.

2021

2022

2020

2021

Jan-MarOct-Dec

Apr-JunApr-Jun

0.10
Jan-Mar0.40

Oct-Dec

0.15

Jul-Sep

0.60

Apr-Jun

0.20

Jan-Mar

0.80

Ave.

0.25

India

2022

ASEAN-5

6.1%

+5.7%

8.1%

8.7%

+3.4%

3.6%

3.7%

4.4%

8.2%

5.3%

3.2%

2.3%

3.3%

7.4%

5.3%
*ASEAN-5：Thailand, Malaysia,
Indonesia, Philippine, and Vietnam

Trend by Country

China・Exports increased due to the timing gap of increased production in
anticipation of economic stimulus measures and recovery in domestic
demand.
・The government's policy (Control of crude steel and economic
stimulus measures) and the recovery of domestic demand ismonitored carefully.

India

・Exports to Europe decreased due to a decline in demand and fallingmarket conditions, in addition to the non-demand period caused by therainy season. As a result, exports to Southeast Asia increased.
・This trend is expected to end after the rainy season.

Russia・Steel products, which had nowhere to go due to economic sanctions,have flowed into Turkey and Middle and Near East at low prices,
worsening the supply and demand of steel products and the steelmarket in each country.

2022

India

1.00

Thailand

2020

2021

Jan-Mar

2022

China

Steel Export Trend

Oct-Dec

0.30

2021

US

Source: IMF World Economic Outlook Update April 19, 2022, July 26, 2022

Jul-Sep

Apr-Jun2020

Forecast

Jul-Sep

0.05

Jul. 2022

Apr-Jun4.0

Forecast

Jan-Mar

0.10

2021 Actual

Apr. 2022

Ave.

5.0
Apr-Jun

0.15

Jan-Mar

6.0

Oct-Dec

0.20

Jul-Sep

7.0

Jan-Mar

0.25

Ave.

8.0

Apr-Jun

China

World

Indonesia

0.30

Jan-Mar

9.0

16

JFE SteelRaw materials（Steel Business）
 Key raw material

Iron ore remained weak due to sluggish demand for steel products in China.
Coking coal prices are on a downward trend from their recent peak due to the recent
deterioration in overseas steel prices.
• As the supply and demand of steel products tightens due to the Chinese government's
economic stimulus measures, the raw material market is expected to rise from thecurrent level by the second half of FY2022.
••

 Metal and scrap•($/DMT)

Almost all metal prices rose sharply due to tight supply and demand for alloy iron,which is highly dependent on Russia and Ukraine, as well as a rise in electricity prices
due to a rise in the fuel market. Although the market is currently on a downward trend,
it is expected to remain in the high range.
Iron ore（Iron Ore Fines from Australia）$225

Termcontract
FOB

$200

$/DMT

FY2021
Oct-Dec
182($/WMT)$700

FY2022

Jan-MarApr-Jun

Jul-Sep

95

118

133

$175

$600

Coking Coal（Hard Coking Coal from Australia）
Termcontract
FOB

FY2021
OctDec$/WMT

371

FY2022JanMar

AprJun395

526

JulSep
-

$500

$150
$400

$125
$300

$100

Term-contract FOB
$50
21/4

21/7

21/10

22/1

22/4

Spot FOB$200

Spot FOB

$75

22/7

Term-contract FOB
$100

21/4

21/7

21/10

22/1

22/4

22/7 17

JFE Steel

173.7bn. Decrease in JFE Steel’s Segment Profit(FY2021 (Actual) vs. FY2022 (Forecast))

JFE SteelSegment Profit
1. Cost2. Volumeand Mix
3. Sales and
Raw materials

4. Foreign exchange
effects on trade
5. Inventory
valuation
6. Others

FY2021

FY2022(Actual)(Forecast)

323.7
+10.0

150.0

Change(billion yen)

(173.7)• Cost reductions +23.0• Chiba No.6 blast furnace refurbishment -13.0

±0.0

+70.0
(100.0)• Improved spreads due to higher selling prices(despite more costly raw materials and metals)• 1USD=112.1yen→1USD=133yen (about)(72.0)• Inventory valuation-85.0(+160.0→+75.0)• Carry over of raw +7.0 (+23.0→+30.0)• Foreign exchange valuation +6.0 (+11.0→+17.0)(81.7)• Group companies -45.0, etc.
18

JFE Steel

Impact of the depreciation of the yen(steel business) Due to soaring raw material prices and falling overseas steel prices, the foreign currency balance oftrade(imports and exports) is substantially overpaid.
 The depreciation of the yen makes worse profits (A little less than less than 5bn. per 1 yen
depreciation), but we promote to reflect the impact of the depreciation of the yen to sales price byimproving sales prices in the domestic market.

Past

Sales environment

Manufacturing cost

Improving export
competitiveness ofcustomers/JFE SteelProfit and Loss※1
Valuation ：positiveeffects on trade ：neutral

A small portion of imported raw
materials in manufacturing costs=> Small impact of FOREX movements(imports and exports)

Now
Parts supply constraints
in the automotive sector
and weak overseas steelmarketDue to the soaring prices, a big
portion of imported raw materials
in manufacturing costs=> Heavy impact of FOREX movements

Valuation ：positiveeffects on trade :neutral(imports and exports)

145(yen/USD)
140
135
130
125

USD-JPY trend
The yen has depreciated sharply since thelatter half of FY2021 against the backdropof the widening interest rate difference
between Japan and the US.
FY2021 (average): 112 yen/USD->Currently Around 135 yen/USD

FOREX balance of trade↑excess receipts↓ excess payments

0

FOREX movements on foreign
currency trade (imports andexports) on earnings.

・Excess payments have been
increasing since the second halfof FY2020.
・Currently, foreign currency
costs account for approximately
70% of manufacturing costs.

110
105
100

1…2015 2016
1… 2017
1… 2018
1… 2019
1… 2020
2… 2021
2… 20222…

Impact concerning foreign currency
assets, liabilities and overseas Gr
companies‘ profit.

effects on trade ：Impact of

120
115

※1Valuation： Translational FOREX

2015

2016

2017

2018

2019

2020

2021

2022

19

Trend of profit for subsidiary and affiliated companies
in steel business

JFE Steel Profit of subsidiary and affiliated companies in FY2022 is expected to be secondhigh due to initiatives of subsidiary and affiliated companies to improving theirprofit, despite the severe business environment

Domestic subsidiary and affiliated companies
・Allocation of management resources to growth areas

Profit of domestic and overseas subsidiary
and affiliated companies in steel businessFeb. 2022: Integrating JFE Mineral, Mizushima Ferroalloy, and JFE Material
2000
Aug. 2022: JFE Container to be JFE Steel’s wholly-owned subsidiary・Expansion of outside profit businesses not dependent
on steel business

1500

Overseas subsidiary and affiliated companies
・Expanding vertical specialization business,

1000

stable operation

CSI(US),GJSS(China),JSGT(Thailand),JSGI(Indonesia),NJSM(Mexico) etc.

500
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Forecast

・Earnings of integrated production business inhigh-demand market
JSW(India)、FHS(Vietnam)

Profit of overseas subsidiary and affiliated companies

Profit of domestic subsidiary and affiliated companies

FY2021 vs FY2022

000

FY2021 vs FY2022

1,000

Profit is expected toincrease from previous

500

fiscal year mainly raw

Profit is expected to remain
high, although profit is500

expected to decrease frommaterial and resource
subsidiaries, which is due to0
FY2020

FY2021

FY2022
Forecast

rising raw material prices.

previous fiscal year mainly
JSW and CSI, which is due to0
FY2020

FY2021

FY2022
Forecast

the falling global steel market.

20

JFE Engineering
Financial Forecast for Fiscal Year 2022

21

JFE Engineering

Financial Forecast for Fiscal Year 2022
Current Business Environment/Overview of Financial Status


Domestic demand both in the environment & energy sector and infrastructure sector is
expected to remain solid.

Segment profit is expected to decrease by ¥6.0bn. year-on-year to ¥20.0bn., due to rising
prices of materials and equipment.

Financial Forecast（billion yen）

FY2021 Actual

FY2022 Forecast

１H

１H

Full Year

Full Year

Change１H

Full Year

Orders

252.3

505.8

310.0

550.0

57.7

44.2

Revenue

229.2

508.2

230.0

520.0

0.8

11.8

11.1

26.0

4.0

20.0

(7.1)

(6.0)

Segment Profit<1H>・Orders+57.7 Increase in large-scale orders in carbon-neutral area
・Segment profit(7.1) Construction mix and rising price of material and equipment.
<Full Year>・Orders+44.2 Increase in overseas projects due to changes in contract schedule.
・Revenue+11.8 Construction mix
・Segment profit (6.0) Rising price of material and equipment.
22

JFE Shoji
Financial Forecast
for Fiscal Year 2022

23

JFE Shoji

Financial Forecast for Fiscal Year 2022
Current Business Environment/Overview of Financial Status In the first half of FY2022, segment profit is expected to increase year-on-year for both JFE
Shoji itself and group companies due to strong sales of steel products and raw
materials in Japan and overseas.
 Full year segment profit is expected to be ¥55.0bn., the same as previous fiscal year.

（billion yen）

Revenue
Segment Profit

FY2021 Actual

FY2022 Forecast

１H

１H

Full Year

Full Year

Change１H

Full Year

544.4

1,231.7750.0

1,470.0

205.6

238.3

25.6

55.9

35.0

55.0

+9.4

(0.９)

<1H>
・Segment Profit ＋9.4

Domestic and overseas markets are expected to be solid,
especially overseas businesses in northern America are expected to proceed successfully.

24Topics
Initiatives to achieve carbon neutrality
in Steel business

JFE Steel Carbon Neutral Strategy Briefing
scheduled for September 1

25

Overview of Process Conversion toward 2050
Establish and install
super-innovativetechnologies

Develop super-innovativetechnologies to realize
carbon-neutrality-18%• Install EAF• Expand use of
reduced iron

Small-scaledemo
Medium-scale
Carbon- (GI fund)recycling
Blast
Furnace

HBI

Use ofScrap

conditions
Large-scale development
Use inexisting
blast furnace

Use
Directhigh-grade
Reduction

EAF

Carbon-30%
or more Arrange the best processes Neutrality
along with external

Expand EAF
capacity in
Sendai
DRP
Technology

Use inEAF

Highly-efficientlarge-scale EAF

Expand use of scrap

Install in order*According to the amountof hydrogen supplied●LNG injection●Use of HBI●Oxygenblast furnace●Use low-grade
raw materials●Use carbonrecycle technology

Convert tocarbon-free hydrogen*Challenges toreduced iron production by
low-grade iron ore(Fe<65%) used in BF.

Convert to carbon-free power
Application ofburner lancetechnology

External
Green steel needs
Conditions Formation of sustainable
Carbon-free power
Carbon-free Hydrogen
CCUS

markets throughappropriate evaluationof environmental values

Carbon-free power

Carbon-free hydrogen

CCS

Promote technology development on a multi-track basis and introduce proven technologies sequentially.
Aim to achieve carbon neutrality by applying proven technologies to steelworks with optimal combination
Copyright © 2022 JFE Steel Corporation. All Rights Reserved.
26
of technologies.

ReduceImmobilization

Expansion of energy
conservation facilities

Expansion of scrap use

2050

Use of CCS(External conditions)

Carbon-Neutral
VisionCCS Image
CO2

Installation of

Fuel,electric arc furnace
Oxygen,Powder raw materials

Oxygengas

Converter

Carbon-Free Power(External conditions)

EAF

CO2

CO2

Wise use

Carbon-Neutral
Breakdown of
CO2 Reduction Methods

Expansion of
application ofcarbon-recycle
technologies

Carbon-Free
Hydrogen(Application to
direct reduction)(External conditions)

Process ofCarbon-recycle direct reduction

Process ofCarbon-recycling blast furnace

H2 O

Effective use of
CCUS

Shaft gas
injection (SGI)*

CarbonRecycleMethanation

Expand use of CCU throughcooperation with industrial complexes

Circulation

Furnace gas(CO2 CO H2)
Coking coal

Outside of the systempelletMethanation

CarbonRecycleHydrogen(Indirecthydrogen injection)

CH4: Carbon-neutral reductant*Use of circulation gas

CH4: Carbon-neutral reluctant

H2O

Directreduced iron

Blast furnace / EAF / Converter

Aim to achieve carbon neutrality in the steel business by 2050
through a combination of "reduce," "Wise use," and "Immobilization"

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

27

Construction of Carbon-Recycle Blast Furnace and Coke Oven
Carbon-Recycle Blast Furnace

Construction of new coke ovens(Project of Green Innovation Fund)

Emission reduction by carbon-recycle blast furnace

・Satisfy necessary amount of coke to be used after carbon-recycle blast furnace

CO2 from blast furnace isconverted into recycle-methane byusing hydrogen, through methanation.

Develop the technology which
reduces CO2 emission 50% insteelmaking proses

Coexistence of heat compensationand methane quantity maximizationby oxygen utilization and SGI

Ordinary blast furnace

・Reduce CO2 emission by installing high efficient new coke ovenCO2 emission reduction
160K ton /year

・Production efficiency improves 16% byinstalling large stamp charge coke oven・Reduce dust generation at input/
output timing

Top charge method

Stamp charge method
Stamping hammer(to increase thedensity)

Furnace gas

Iron ore(FeO)
Coke(C):
0.3 t/t・ironPulverized coal(C): 0.2 t/t・iron

Coal

Hot air

Coal cake

CO reduction
Charge coal from the top
Carbon-recycle blast furnace

Shaft
gas
injection(SGI)

Iron ore(FeO)
Coke(C):
0.3 t/t・iron

CO2
Furnace gas separation
and recovery

CarbonRecycleHydrogen H2

Methanation

Charge high-density coal cake

Necessary blast furnace reducer in
JFE(The present state is set to 100)

Pulverized
coal
New

Coke

(CO+H2) reduction

Existing

Pure O2

As is●Install area: Chiba district (150m3), Operation start: 2025
●Install each technology in order according to H2 supply after
scale-up test

Copyright © 2022 JFE Steel Corporation. All Rights Reserved.

Coke
production capacity

2050(Expected)

2050(Expected)●Install area: Fukuyama district●Operation start: 6A oven 2025. 6B oven is under planning.

28

Framework for CCUS Green Infrastructure Study●CCUS(※1) Green Infrastructure Study Team was established in the Carbon Neutral Promotion Project Team.
●Carry out existing research and development and promote studies on the use of CO2 separation, capture, utilizationand storage technologies in collaboration with industrial complexes and companies.
※1）CCUS: Carbon dioxide, Capture, Utilization and Storage

Framework

Main initiatives※2●Develop an Optimal System for Methanol Synthesis using CO2

Board of Directors（Operation scheduled for 2023, completion of demonstration testingby 2025）

Management Committee

Low-cost CO2Separator PSA
Carbon Neutral Committee : Management Committee Members + Projects

Pretreatment
facility

CO2 Separator

High efficiency methanol
synthesis reactor

Carbon-free H2Carbon Neutral advancement Project teamExhaust gas
Project Leader：Executive Vice President in charge of Corporate Planning Department
Headquarters
Carbon Recycling Development
Department(created July 1, 2021)

Raw Materials Department
Green Raw Materials Section(created July 1, 2021)
Advanced Melting Process
Development(created October 1, 2021)

New Reduction Process Development
Department(created January 1, 2022)

CCUS Green Infrastructure Study Team(created August 1, 2022)

Recycle forunreacted gas

Corporate Planning
Department

reaction-generated water recycling

Technology Planning
Department

Facilities Planning
Department
Sales Coordination &Operation Planning
Department

Steel ResearchLaboratory
Specialized teams●Research and Development of Innovative CO2
Fixation Technology by High-Speed Mass
Carbonation of Steelmaking slag
（Operation scheduled for 2024, completion ofcommercialization test by 2025）
Hot grinding

Research and development
in corporation with Ehime
University
Heat recovery

Steelmaking slag
Fixing CO2

Each Technical
Department
Planning Department

Steelworks and production plants

Methanol

Factory exhaust gas(CO2)(Power generation and steel
making)Solidification of molten
High temperaturesteelmaking slag
granular steelmaking slag

Treated steelmaking slag
used as road bed material※2) This research and development is conducted as a commissioned project "Development of technologies for carbon recycling, next generation
thermal power generation/Development of technologies for reducing and effectively utilizing CO 2 emissions" publicly offered by NEDO.

29

Appendix(1)Profit/Loss Analysis

30

JFE-HD

Main Financial DataIFRS

J-GAAP
FY13

FY14

FY15

FY16

FY17

FY18

FY18

FY19

FY20

FY21

(bn. Yen, times)(bn. Yen, times)
Ordinary Income

173.6

231.0

64.2

84.7

216.3

221.1

Business profit

232.0

37.8

-12.9

416.4

EBITDA

368.9

421.5

254.4

279.9

388.8

405.9

EBITDA ＊1

428.2

269.4

223.4

668.7

ROS

4.7%

6.0%

1.9%

2.6%

5.9%

5.6％

ROS ＊2

6.0%

1.0%

-0.4%

9.5%

ROE

6.3%

7.7%

1.8%

3.7%

7.6%

8.3％

ROE ＊3

8.6％-11.1%

-1.3%

15.7%

ROA

4.5%

5.5%

1.7%

2.3%

5.2%

5.1％

ROA ＊4

5.0％

0.8%

-0.3%

8.4%

Debt Outstanding

1,534

1,501

1,379

1,375

1,331

1,450

Interest-bearing debt
outstanding

1,524

1,814

1,806

1,849

Debt/EBITDA Ratio

x4.2

x3.6

x5.4

x4.9

x3.4

x3.6

Debt/EBITDA
multiple
*5

x3.6

x6.7

x8.1

X2.8

D/E Ratio

67.9%

59.0%

56.9%

51.4%

58.1%

62.0％

D/E Ratio ＊6

68.2％

96.4%

93.2%

80.8%

Profit attributable to ownersof parent (yen/share)

177.4

241.6

58.4

117.8

250.8

285.0

Profit attributable toowners of parent(yen/share)

283.8-343.4

-38.0

500.1

40

60

30

30

80

95

95

20

10

140

ー

28.0%

Dividend(yen/share)
Pay-out Ratio

Notes[IFRS]

Dividend(yen/share)

22.5%

24.8%

51.4%

25.5%

31.9%

33.3％

33.5％
ー
Pay-out Ratio＊1 EBITDA = Business profit + Depreciation and Amortization＊2 ROS = Business profit / Revenue＊3 ROE = Profit attributable to owners of parent company / Equity＊4 ROA = Business profit / Total assets＊5 Debt/EBITDA ratio = Interest-bearing debt outstanding / EBITDA＊6 D/E ratio = Interest-bearing debt outstanding / Equity attributable to owners of parent
For debt having a capital component, a portion of its issue price is deemed to be capital, as assessed by rating agencies.

31JFE-HD

Consolidated

Main Financial Data and Performance & Profitability Targets
7 th mid-termbusiness plan
FY2024FY2020
ActualFY2021
ActualFY2022
Forecast

Business profit¥320.0 billion¥-12.9 billion¥416.4 billion¥235.0 billion

Profit attributable toowners of the parent¥220.0 billion¥-21.8 billion¥288.0 billion¥140.0 billion

10%

-1.3%

15.7%

-

About 3x

8.1x

2.8x

-

About 70%

93.2%

80.8%

-

10,000 yen/ton-3000 yen/ton

14,000 yen/ton

6,000 yen/ton¥230.0 billion¥65.4 billion¥323.7 billion¥150.0 billion

Engineering business Segment
profitRevenue¥35.0 billion¥650.0 billion¥24.0 billion¥485.7 billion¥26.0 billion¥508.2 billion¥20.0 billion¥550.0 billion

Trading Business Segment profit¥40.0 billion¥20.0 billion¥55.9 billion¥55.0 billion

7 th mid-termbusiness plan
Around 30%-（140 yen）(interim:
40yen)

ROE
Debt/EBITDA
D/E*1

Operatingcompanies

Steel businessPayout ratio

Profit per ton*2
Segment profit*1 For liabilities with equity subject to credit ratings, theseequities reflect the evaluations of rating agencies*2 Steel business profit per ton (consolidated segment profit /non-consolidated sales volume)32

JFE Steel

21.3bn. Increase in JFE Steel’s Segment Profit(FY2021.4Q (Actual) vs. FY2022.1Q (Actual))
FY2021JFE SteelSegment
Profit

1Q

2Q

3Q

4Q

Full YearFY2022
1Q

69.7

88.8

93.5

71.7

323.7

93.0

1. Cost±0.0

2. Volumeand Mix(7.0)

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

Change(billion
yen)

+21.3

(75.0)• Metal spread was deteriorated due to higher raw
material and metal prices, despite improved steel
prices.

+109.0• Inventory valuation+24.0 (+37.0→+61.0)• Carry over of raw+74.0 (-37.0→+37.0)• Foreign exchange valuation +11.0(+7.0→+18.0)(5.7)• Foreign exchange effects on trade -13.0, etc.
33

66.0bn. Decrease in JFE Steel’s Segment Profit(FY2022.1Q (Actual) vs. FY2022.2Q (Forecast))

JFE SteelSegment Profit

93.0

1. Cost±0.0

2. Volumeand Mix+1.0

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

ChangeFY2022 Forecast
1Q(Actual)+89.0

2Q(Forecast)

27.0

JFE Steel

1H

120.0

(billion yen)

(66.0)• Prices of main raw materials and metals
remained high, but spreads improved due toimproved selling prices.

(123.0)• Inventory valuation-40.0(+61.0→+21.0)• Carry over of raw-64.0 (+37.0→-27.0)• Foreign exchange valuation -19.0(+18.0→-1.0)(33.0)• Foreign exchange effects on trade -10.0, etc.

34

JFE Steel45.2bn. Decrease in JFE Steel’s Segment Profit(FY2021.2H (Actual) vs. FY2022.1H (Forecast))

JFE Steel

FY20212H(Actual)

165.2

Segment Profit

FY2022
1H(Forecast)

Change(billion yen)

120.0

(45.2)

1. Cost±0.0

2. Volumeand Mix(5.0)

3. Sales and
Raw materials+22.0• Improved spreads due to higher selling prices(despite more costly raw materials and metals)+5.0• Inventory valuation-19.0(+101.0→+82.0)• Carry over of raw+17.0 (-7.0→+10.0)• Foreign exchange valuation +7.0(+10.0→+17.0)

4. Inventory
valuation
5. Others(67.2)• Foreign exchange effects on trade -40.0• Group companies -36.0, etc.

35

JFE Steel90.0bn. Decrease in JFE Steel’s Segment Profit(FY2022.1H vs. FY2022.2H)

JFE Steel

ChangeFY2022 Forecast
1H

Segment Profit

120.0

1. Cost±0.0

2. Volumeand Mix

±0.0

2H

30.0

Full Year150.0(billion yen)

(90.0)+17.0• Prices of main raw materials and metals remained
high, but spreads improved due to improved
selling prices.

4. Inventory
valuation(96.0)• Inventory valuation-89.0 (+82.0→-7.0)• Carry over of raw+10.0 (+10.0→+20.0)• Foreign exchange valuation -17.0(+17.0→±0.0)

5. Others(11.0)• Foreign exchange effects on trade -9.0, etc.

3. Sales and
Raw materials

36385.0bn. Decrease in JFE Steel’s Segment Profit(FY2021.1H (Actual) vs. FY2022.1H (Forecast))

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

FY2021
1H(Actual)

FY2022
1H(Forecast)

158.5
＋10.0

120.0

JFE Steel

Change(billion yen)

(38.5)• Capital investment effect etc.

+5.0
+51.0

• Improved spreads due to higher selling prices(despite more costly raw materials and metals)+19.0• Inventory valuation+23.0 (+59.0→+82.0)• Carry over of raw-20.0(+30.0→+10.0)• Foreign exchange valuation +16.0(+1.0→+17.0)(123.5)• Foreign exchange effects on trade -50.0, etc.

37Appendix(2)Business Environmental
Indicators, etc.

38

Combined Inventories of HR,
CR and Coated Steel Sheet

Domestic
Market Environment
5,000

JFE Steel（Month）（000ｔ）

Maker

Whole Saler

Coil Center

5

Inventory Ratio(Right axis)

4,000

4

3,000

3

2,000

2
Change

2019

2020

1

2021

May

Mar

Jan

Nov

Sep

0

Jul

May

Mar

2.27

Jan

Nov

3.23

Sep

+1.14

Jul

Mar

Jan

Nov

Sep

Jul

Mar

Jan

May

2018

+0.18

Jan

3.41

（month）

Nov

Inventory Ratio
0

May

451.8

Sep

(Mt)

Jul

Inventories

May

1,000

From
From
May, 2022 Jun, 2021
previous previous
month
year
－14.0
+63.6
465.8
388.2
(－3.0%) (+16.4%)

MarJun, 2022

2022

39

JFE SteelInventories of Plate (Plate Shear)and Wide Flange Shapes

Domestic
Market Environment
Inventories of Plate (Plate Shear)（000ｔ）

Inventories of Wide Flange Shapes（Month）（000ｔ）

500

3.5

Inventories
Shipment
Inventory Ratio(Right axis)

250

Inventories
Inventory Ratio(Right axis)
450

3.0

400

2.5

350

3.5

200

3.0

150

2.5

100

2.0

2.0

1.5

2018

2019

2020

2021

2022

2018

－8.4

2.6

－0.18

＋0.1

May,
2022

Jun,
2021

188

196.8

2.78

2.5

1.5

2019

2020

2021

Apr

Jan

Oct

Jul

Apr

Jan

Oct

1.0

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

0.5

0

Inventory
ratio（Month）

＋0.4

Apr

2.1

From
previous
year

Jan

3.0

From
previousmonth(＋0.2%) (－4.3%)

Oct

+0.7

Inventories 188.4（000t）

Jul

ー0.2

361

Apr

2.8

450

1.0

Jan

+102

Oct

year

+13

50

Jul

month

(+3.0%) (+28.2%)

Oct

Jan

Oct

Jul

Apr

Jan

Inventory
ratio（Month）

463

Jul

Inventories（000t）

Apr

250

Change

Jun,
2022

Apr

ChangeJun,
May, Jun,From
Fromprevious
previous
2022
2022 2021

Jan

300

200

（Month）

2022

40

Domestic
Market Environment

JFE Steel

Trend of Import Steel (Ordinary Steel)（000ｔ）
600

S.Korea

China

TaiwanOthers

500

400

300

200

Unit:000t

Jun,
2022

Import Steel

379

100

From
Previous
Month

From
Previous
Year

+31

+40

(+8.9%)(+12.1%)

May,
2021

Jun,
2021

348

339

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun

0

2018

2019

2020

2021

2022

41

Domestic
Market Environment

JFE SteelPrice Trend of Import Steel（000 yen /ｔ）

110
100
90
80
70

60
50

Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May

40
2016

2017

2018

2019

2020

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

2021

2022
42

JFE Steel

Overseas
Market Environment

Crude Steel & Im/Export, China

Export（Left axis）（Mｔ）

Inport（Left axis）

Crude steel（Right axis）

（Mｔ）
120

9
8

100
7
6

80

5
60
4

Jun,
2022

From
previousmonth

Apr,-Jun,
2022

From
Apr,-Jun,
2021

Crude Steel（Mt）

90.7

-6.1%

280.1

-6.1%

Export（Mt）

7.6

-2.6%

20.3

3.0%

3
2
1

40

20

0

0
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May
2018

2019

2020

2021

2022

43

JFE Steel

Overseas
Market Environment

Inventories in China by Product

（Mｔ）

30.0

100.0%

Bar

Rod & Wire

Plate

HR

CR

Change by Previous year(%)
50.0%

25.0
0.0%
20.0

-50.0%

15.0-100.0%-150.0%10.0-200.0%Change

2018

2019

2020

2021

-250.0%

May

Mar

Jan

Nov

-300.0%

Sep

Jul

14.5

May

15.1

Mar

Jun,
2021

Jan

May,
2022

Nov

Sep

Jul

(＋4.3%)

May(＋0.1%)Mar

From
Previous
Year
0.6

Jan

Sep

Jul

May

15.1

Mar

Jan

Nov

Sep

May

Mar

Jan

0.0

Jul

Inventories
（Mt）

From
Previous
Month
0.0

Nov

Jun,
2022

5.0

2022

44

Overseas
Market Environment

Metal Spread Trend(Chinese Spot Basis)

JFE Steel

（$/t)

（$/t)

1000

1000

900

900

800

800

700

700

600

HRC

600

500

500

400

400

300

300

200

Metal Spread

200

100

100

0

0

Metal Spread ＝ HRC Price － Raw Materials Cost
*HRC Price： Chinese Spot basis
Raw Materials Cost： Calculated from market price of Iron Ore and Hard Coking Coal45

(US$/t)FeMn

2,600

2,200

1,800

1,400

1,000

600

2018.1
2018.72019.1
2019.72020.12020.72021.12021.72022.01
2022.072018.72019.1
2019.72020.12020.72021.12021.72022.01
2022.07

22.0
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0

2017.7(US$/lb) Mo

2018.160

2017.11102017.7160

2017.1

210

2016.7(US$/t)2016.7260

2016.12022.07

FeCr

2016.12022.072022.01

2021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.7

Raw Materials

2022.01

2021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.72016.1(￠/lb)

2016.1JFE Steel

Trend of Sub Material’s Market Price
Zn

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

46

JFE Steel

Trend of Sub Material’s Market Price

Raw Materials
Scrap

($/B)

（yen/ｔ）
70,000Spot Bulker

100,000
90,00060,00080,00070,00050,00060,00040,00050,00040,00030,00030,00020,00020,00010,000

LNG

110,000

130

90,000110

80,0002022.72022.12021.72021.1(bunker oil: $/t)

(crude oil : $/bbl)

100,000

2020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.72022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.72016.1（yen/ｔ）

2016.10

10,000WTI crude oil（left axis）

1200

bunker(Japan VLSFO (Right axis)

1000

bunker(Japan 380CST) (Right axis)

800

2022.72022.12022.72022.12021.72021.12020.72020.1

2019.72019.1

2018.72018.12017.72017.1

2016.72016.12021.702021.1

10

20,0002020.7200

30,0002020.130

40,0002019.7400

2019.150

2018.750,0002018.1600

2017.770

2017.160,0002016.790

2016.170,00047

JFE Steel

Progress of Initiatives of Steel Business（Structural Reforms and Strategic Investment in Japan）

Facilities

Structural
Reforms

KeihinDistrict

～FY19

FY20

FY21

FY23～

Upstream Facilities

To be shut down

Hot rolling Facilities

To be shut down(~Sep. 2023)(~Sep. 2023)

Cold-rolling & Hot-dip
Galvanizing Facilities

Shut downed

Chiba
District

Tin Mills

Shut downed

Chiba &
Kurashiki

Blast Furnace Refit(2CAL・2ETL)Continuous
Casting Machine

Strategic Investments

Kurashiki
District

FY22

Facilities manufacturing steel sheet forcans to be shut down (~Sep.2022)

Kurashiki Refit
No.4 BF(~Dec.2021)

Chiba Refit
No.6 BF(Sep.2022~Jan.2023)

Installed new Continuous
Casting Machine（Jun.2021）
Reinforce extra-thick steel plateproduction line (Nov. 2023)

Extra-thick steel platefor offshore wind-power
application

Electrical Steel
Sheet Facilities
Coke Oven
Fukuyama
District

Sintering Machine
Energy Plants
Ferro Coke
Production Facility

Overseas

Mexico NJSM

RenewedNo.3 Coke Oven(A)Renewed No.3 CokeOven(B) (Jun.2021)

FY24 Reinforce
Non-oriented Electrical
Steel Sheet ProductionLine

Installed new Sintering Machine
Installed No.2 power generator in Joint Thermal
Power
Develop ferro coke production technology

Begun Operating CGL for Automotive Applications

48

Orders by Business Area

JFE Engineering（bn.）

Business
Area
Waste
to
Resource

FY2021
ActualFY2022
Forecast

203.9 220.0

ChangeMain Orders received in FY2022 1Q

Renewal construction of domestic waste treatment plant[Hokkaido]

16.1

Construction works of overseas waste treatment andpower plant [Germany, UK]

CarbonNeutral

87.4

77.0 (10.4)

Combined
Utility
Service

13.4

18.0

Core
Infrastracture201.1 235.0

Total

505.8 550.0

4.6Construction works of fuel feeding pipe for LNG power

33.9plant [Hyogo]

Construction works of overseas bridge [Ghana]

44.2

49

JFE-HD

Links to the reports published during FY2021
ReportURL

JFE Group REPORT
2021

https://www.jfeholdings.co.jp/en/investor/library/gro
up-report/index.html

JFE Group CSR
REPORT 2021

https://www.jfeholdings.co.jp/en/csr/data/index.html

JFE Group CSR
REPORT 2021
ESG Data

https://www.jfeholdings.co.jp/en/csr/pdf/2021/2021_08.pdf

DX REPORT 2021

https://www.jfeholdings.co.jp/en/investor/library/dxr
eport/index.html

QR code50

Appendix(3)The 7th Medium-TermBusiness Plan

51

JFE-HD

Mid/long-term directions

Biggest transformation in company’s history aimed at achieving global success

JFE’s corporate vision
Contributing to society with the world’s most innovative technology
JFE’s mission

To be essential to society’s sustainable development
and to create safe, comfortable lives for people everywhere

Environmental & Social
sustainability（helping to solve critical issues）

Economic sustainability（stable earnings power）

Ensuring environmental & social sustainability and establishingeconomic sustainability will enable to ensure the resiliency of JFE’s operationalfoundations and allow the company to achieve sustainable growthand increased value over the mid/long-term.

52

JFE-HD

Initiatives to achieve environmental and social sustainability(helping to solve critical issues)E

JFE Group Environmental Vision for 2050

• Aim to realize carbon neutral by 2050, taking climate change as anextremely important business concern for JFE• Accelerate R&D in new technologies and strive to create superinnovative technologies• Contribute to the reduction of CO₂ emissions in society and use this as abusiness opportunity to increase corporate value• Work systematically to combat climate change under TCFD philosophy

S

Solve issues impacting society

1. Safety/health management
2. Facilitate employee participation（Diversity & Inclusion, Personnel development, Workstyle reforms）

3. Contribute to regional societies through engineering
4. Respect human rights throughout supply chain（Conduct human-rights due diligence from FY2021）

G

Enhance corporate governanceConsider how to apply non-financial metrics
in terms of director compensation andinvestment decisions etc.

53

JFE-HDJFE Group Environmental Vision for 2050
Toward Carbon Neutrality by 2050

JFE Group Environmental Vision for 2050
（GX Investment during 7th mid-term business plan：340 billion yen)
GX：Green transformation

1. Key environmental initiative under 7 th mid-term business plan
• Steel business：Reduction of CO₂ emissions by 18% by the end of
FY2024（vs. FY2013）

2. Carbon Neutrality by 2050①

Reduce CO₂ emissions at JFE Steel• Pursue super-innovative technology for carbon-recycling blast furnaces and
CCU• Develop hydrogen-based ironmaking（direct reduction）technology etc.

②

Expand contributions to CO₂ emissions reduction in society• Engineering business：Expand & develop renewable-energy
power generation and carbon-recycling technologies.

Targets to contributions to
CO₂ emissions reduction
FY2024 12 Mt
FY2030 25 Mt• Steel business：Develop & market eco-products and eco-solutions.
• Trading business：Increase trading in biomass fuels, steel scrap, etc.
and strengthen business in SCM for eco products.
SCM：Supply Chain Management③

Groupwide commercialization of offshore wind-power business54

JFE-HDJFE Group’s activities for Carbon neautrality
Steel Business: CO₂ emission reduction by 18% at the end of FY2024 (vs. FY2013)
Through decarbonization in steel manufacturing processes etc., JFE Group aims to becarbon neutral.
Engineering Business: Contribute to carbon neutrality in society on the whole by expanding
JFE Engineering’s contributions to CO₂ emissions reduction resulting from its businesssuch as development of renewable-energy generation and carbon recycling technologies.
（Mt/year）

CO₂ emissions reduction

58.1

-10.5

Steel
business
CO₂
emissions

18%

30%

(End of FY2024)

47.6

or more

-17.4
40.7

Steel business：

Carbon neutrality
by 2050

25.0
Engineering business：

12.0

Expand contributions to
CO2 emissions reduction
in society

Engineering business
CO₂ emissions reduction

FY2013(CO₂ reduction base year)

FY2024(last year of 7th Medium-term
Business Plan)

FY203055

JFE Steel[Steel Business] Roadmap for Carbon Neutrality
Revised our roadmap for realizing carbon neutrality in 2050, considering installing the technologies
below in the concrete: Carbon recycling blast furnace: Each established technology to be installed in order (late 2030s）
 Hydrogen-based ironmaking:
Small-scale pilot furnace demo(2024～25), middle-scale direct reduction furnace demo（～2040）
 EAF: Install pilot EAF in Chiba (demo to be started from 2024)→Install highly efficient large scale EAF(2027～30)
JFE Group’s CO2
reduction targets

30% or more reduction compared

18% reduction comparedto FY2013（Steel Business）

to FY2013 （Steel Business）

Carbon neutrality
by 2050

Released in Feb, 2022

Technology
Carbonrecycling
blast
furnace

Blast
Furnace2021 ～

24

26

27

28

（2025-2026）
Element development<GI Fund>Electric Arc
FurnaceTechnologies to beinstalled to theexisting facilities
R&D expenses

30

2031～2040

Small-scale demo

Large-scale
development<GI Fund>（2024～2025）

2041～2050

Each established technology Implementation
to be installed in order
・ LNG injection
・ Oxygen Blast Furnace
・ CCU

Middle-scale direct reduction
furnace demo

Small-scale pilot furnace demo

(Direct reduction)

Development ofother technologies

29

Small-scale demo

CCU

Hydrogen-based
ironmaking

25

Implementation（～2040）Ferro-coke（300t/day → 1500t/day）
COURSE50
Super-COURSE50<GI Fund>Install highly-efficient
Pilot EAF

large-scale EAF<GI Fund>Expand scrap use in converters（Pretreating in converter etc.）●Implement burner lance（Burner to melt scraps）●HBI use¥100bn. R&D expenses for 10 years

Items newly
released thistime arecolored green

Currently executing R&D expenses
on schedule for technology
development above

56

JFE SteelCarbon-recycle Blast Furnace• Technologies for reducing CO₂ emissions from blast furnaces are necessary to maximize blast furnaces’
advantages such as mass production, high-efficiency production, and high-grade steel production• Combining carbon-recycling blast furnace with CCU enables to reuse CO₂ inside a steelworks by using raw
materials of the same grade as those used in conventional blast furnaces. By doing so, JFE aims to achieve net
zero carbon emissions.

Sintered Ore(Fe2O3)

Coke (C)N2 H2O
CO2 CO H2

Coke (C)

Sintered Ore(Fe2O3)

Byproduct gas(Fully used for

Hot air

O2

Blast
Furnace

CO2

Blast
FurnaceFe
1500℃

Conventional

Blast Furnace
Capacity

Methane converted
from CO₂ is reusedin blast furnace.

4M t / BF-year

Oxygen (O₂)

Byproduct gas（Reused insidea steelworks, circulated
in shaft furnace）

Hydrogen (H₂)

Shaft
Furnace

Methanation
Facility
ReducedPellets

Methane (CH4)
Molteniron

Pellets made ofhigh-purity iron ore

In-house use
CCU

Carbonrecyclingheating andelectric power
generation insidea steelworks)

Molteniron

Hydrogen-based ironmaking(direct reduction)

Carbon-recycling Blast Furnace

Conventional Blast Furnace（As carbon-neutral
reduction agent）

Carbon-recycling Blast Furnace
4M t / BF-year（on par with Conventional BF）

Electric Arc
FurnaceHydrogen(H₂)

Carbon-free Power（hydrogen/ nuclear）

Melting

Hydrogen-based ironmaking(direct reduction)
2M t/ Shaft Furnace-year（current direct reduction ironmaking basis）

Reducing Agent

Coke＋Pulverized Coal

Coke＋Recycled methane（CH4）

Hydrogen （H2）Raw Materials

Low-grade raw materials
possible.

Low-grade raw materials possible.

Limited（High-grade iron ore）

CO₂ Emissions

2/t-CO₂/1-ton of pig iron

Target: Zero（CO₂ reduction in BF＋CCUS）

Target: Zero（Carbon-free method）

57

JFE-HDGroupwide commercialization of offshore wind-power business(Study feasibility)• Become a pioneer in offshore wind-power generation business by commercializing
manufacture of monopile and other seabed-fixed structures.
• Establish groupwide supply-chain such as monopile-structure manufacturing and O&M• Aim to expand renewable energy business by leveraging group synergy effect, taking JFE
Engineering as a main driver.
O&M: Operation and Maintenance. Apply expertise of maintenance and analysis technologies.

JFE Engineering

JFE Steel

Manufacture and market monopileand other seabed-fixed structures
for offshore wind-power generation

Increase capacity for heavy, extrathick steel plate for offshore windpower applications
Provide steel products

Utilizing NO.7 new continuous-casting equipment inKurashiki district (Start operating in FY2021)

Provide steel products
Carry out SCM
Provide steel products

Carry out SCM

JFE Shoji

Subsidiaries/ Affiliates

Contribute to groupwide cooperation
by carrying out SCM of steel
materials and processed products foroffshore wind-power generation

JMU：manufacture power-generation
floating structures and construct work
vessels. Groupwide: O&M making
maximum use of group resource
JMU: Japan Marine United Corporation (equity method affiliate)58

JFE-HD

Facilitate employee
participation

Safetymanagement

Social sustainability：Safety management, HR issues

Further increase efforts to prevent accidents not only by using facilities but
also through safety education and obedience of rules, in order to achieve
top-priority goal of zero major accidents.
Groupwide investment for safety issues：Approx. 10 billion yen/year
Implement multifaceted health/safety management using advanced IT (monitoring,detection, etc.).

Proceed following initiatives in order to allow employees to maximize
performance and enhance groupwide competitive advantages
Diversity &Inclusion

Maximize capabilities of employees with diverse
background

Personnel
development

Improve individual abilities and develop skills for global
competenceWorkstylereforms

Create workplaces and internal structures to maximize
employees potential and enable them to work safely
and confidently

59JFE EngineeringSocial sustainability：Contribution to Regional Societies
through Engineering Business• Expand bases of local production and local consumption business (Food-recycling
business and regional PPS business)• Contribute to the regional society considering to expand combined utility service business in the
future.
• Realize circular economy by developing this business（Example） Local PPS Business ：Smart Energy Kumamoto
1.

Points2.
3.

Local production of energy for local consumption (Local generation of renewable-energy power tobe consumed in the regional societies）
Return economic merits to the city fund. (Investment for renewable energy and energy savingby citizen)
Strengthen disaster prevention and energy saving（Establishing self-supporting energy supply
line**, using storage battery）

Electricity supply throughself-supporting energy
supply line

Urban Energy

Business support
Electric
power
Disaster Prevention Bases（local parks）

Western waste disposal factory（built by JFE Engineering）

Smart Energy
Kumamoto

Electric
power

PublicFacilities

EMS (Energy Management
System)Electric
power
Eastern waste disposal factory■Demand: 226 public facilities in the city
■Energy source
Western waste disposal factory：5,980kw
Eastern waste disposal factory：10,500kw

Charge/Discharge（optimized control）*Regional PPS（Power Producer and Supplier）：Power producers and suppliers engaged in local production of energy for local
consumption **Self-supporting energy supply line: Direct energy supply line from power generation plants to the connection points

Storage battery

60

JFE-HD

Establish economic sustainability (stable earnings power)
Establish sufficient profitability and stable financial base forproactive business operation for the mid/long-term growth

1. Shift focus of domestic steel business fromquantity to quality ーPursue world-class earnings power• Achieve world-class cost and quality competitiveness• Expand margins and achieve stable profit

2. Promote growth strategies
3. Significantly enhance competitiveness throughDX
4. Balance financial soundness with effective
investment based on a “select and concentrate”
approach61

JFE Steel7 th mid-term business plan <Steel Business>
Aim to achieve world-class per-ton profit and enhance strategies for global growth
Promote innovation for carbon neutrality

Main initiatives
1. Transition to a lean, robust business structure by shifting focus
from quantity to quality
2. Expand and accelerate overseas business via solutions based on
knowledge, skills, and data
3. Use digital technology to strengthen production base andstrategies for new growth
4. Pursue innovation aimed at achieving carbon neutrality

Targets
FY2024Per-ton profit 10,000yen/ton*（Segment profit ¥230.0bn.）

Cf. 2H of FY2020（actual）• Per-ton profit 6,000 yen/ton• Segment profit ¥70.8bn.

*Segment profit / unconsolidated sales volume in tons

Equipment & Business Investment：
1,080bn. over 4 years• 40% for GX, DX, equipment modernization andprofitability improvements (6th mid-term actual:20%)• 30% for maintenance investments (6th mid-term actual:50%)62

JFE SteelTransition to a lean, robust business structureby shifting focus from quantity to quality

Improve per-ton profit by both fixed cost reduction and increase of high valueadded products ratio, and enhance earning base.
Achieve world-class costand quality competitiveness• Cost reductions: ¥120bn. over 4
years

Expand margins
and achieve stable profit• Increase mix of highly value-added
products* to an unprecedented 50%*Products that offer technological advantages, are• Labor productivity: ＋20％

（13% via structural reform +1,670→2,000t/person/year via DX etc.
Number of employees: 16,000→13,000）

Establish profit base that is resilient tochanges in economic conditions bycompleting structural reforms• Greatly reducing fixed costs• Lowering breakeven points• Introduce new technologies through DX• Improve production efficiency andyields• Greatly improve labor productivity• Ensure quality competitiveness byimproving product quality, production
efficiency and our delivery

recognized by customers for their value added andhave greater earnings power than commodity products.

••

Product-mix enhancements by focusing on
selective concentration in priority fields• Increase non-oriented electrical steel sheet
production capacity• Increase capacity for heavy, extra-thick steel platefor offshore wind-power applications• Production of high-tensile steel sheet for
automotive•

Fully overhaul our sales pricing
Ensure that products offering the type of highvalue that customers seek are suitably recognizedin the market, based on which we aim to fully
overhaul our sales pricing
63JFE Steel

Expand and Accelerate Overseas Business• Expand returns from 1. vertical specialization business such as steel production applied forautomobiles• Further deepen integrated production in high-demand market (2. “Insider” business)• Expand 3. solution business, in which we provide cutting-edge technologies, operations andresearch knowhow （aim to triple earnings in FY2024 compared to FY2020）
India

1. Vertical specialization business

JSW•

Investment in 2009 (current equity ratio 15%)•

Further deepen direct participation such as
beginning FS of establishing a grain-oriented
electrical steel sheet manufacturing company

2. “Insider” business
3. Solution business

china

GJSS started renewal construction [FY2020]
Started JV of production of iron powder（BJCMX）[FY2018]
Started JV of production and sales of specialty bar
steel（BJSS)[FY2019]

Vietnam•MexicoStarted commercial production of largediameter welded pipe （AGPC）[FY2019]

FHS

Investment in 2015 (current equity ratio 4%)

ASEAN

UAE

JFE Chemical Established JV of anode materials[FY2019]
NUCOR-JFE STEEL MEXICO Began Operating Hot-dip
Galvanized Steel Sheet Production Facility for
Automotive Applications[FY2019]

JSGI（Indonesia）・JSGT（Thailand）
production and sales of galvanized steel sheet
and cold-rolled steel sheet for automotive

64JFE Steel

Examples of Steel Business’s Critical Initiatives:
Strategy to Capture Growing Demand for Electrical Steel Sheet
Domestic

To expand non-oriented
electrical steel sheet (N/O)
production capacity Released April 1, 2021

JFE Steel decided that it would expand theelectrical steel sheet production capacity of its
West Japan Works (Kurashiki District) amid
increasing demand for high-grade N/O appliedfor EV and HEV motors.

＜Demand forecast of high-grade N/O＞
The global movement to tighten and accelerateenvironmental regulations will rapidly increasedemand for high-grade N/O, which are essential for
production of motors that drive electric vehicles.
CAPEX

Approx. 49.0bn.

Expected time tostart production

1H of FY2024

Expected capacity

Doubling the facility’s existing
capacity for producing highgrade non-oriented electricalsteel sheet

CO₂ reductions

Approx. 1.5Mt-CO₂/Year**CO₂ reductions effect resulting from expanding EV/HEV

Overseas

To conduct FS of grain-oriented
electrical-steel-sheet JV with JSW
in India
Released May 7, 2021

JFE Steel signed a memorandum of understanding toconduct a feasibility study with JSW, JFE’s strategic
alliance-partner in India, regarding establishing a
G/O manufacturing and sales joint-venturecompany in India.

＜Demand forecast of G/O＞
Demand for G/O, which are used for the iron coresof power transform, is expected to grow globallyamid continuous increase in demand for electric
power and expansion of reusable energy.
(Economic growth in India is estimated to boost its
local demand for electric power.)
2009 Signed comprehensive
strategic alliance agreement
2012 Started providing
N/O manufacturing technology
JSW became an India’s largest
N/O supplier2021 FS regarding establishinga G/O manufacturing and sales JV

65

JFE-HDJFE Group-wide Strategy to Capture Growing Demand forElectrical Steel Sheet（Steel Business and Trading Business）

JFE Steel
Production ofelectrical steel
sheetsJFE Shoji

Expand production and supply
function of high value-added
electrical steel sheets

Processing anddistribution ofelectric coresWorld’s No.1 global distribution
and processing system

Domestic

Increase electricalsteel sheet
production capacity

Overseas

Production & sales JV
with India’s JSW forelectrical steel sheets

Sharing
Strategies

Synergy

Expand collaboration
with alliance partners

Establish SCM in
new regions

Expand processing
functions in coil centers

Groupwide Strategy: Capture increasing demand for high value-added
electrical steel sheets both in domestic and overseas market

66JFE Engineering

7 th mid-term business plan <Engineering Business>
Expand sales revenue to 1-trillion-yen level in FY2030
Targets
FY2024（billion yen）

• Revenue• Segment Profit【Revenue】

1,000

650.0 billion yen
35.0 billion yen（billion yen）【Segment profit】

1-trillion-yen level

650.0
500

40
30

485.7

20

20.1

23.1

24.0
Equipment & Business
Investment：
Approx. ¥220 billion
over 4 years

100
2020年度FY2020

FY20242024年度(Final Year of 7th
mid-term plan)

0
2030年
FY203035.0

FY2018FY2019 FY2020

FY2024(Final Year of 7th
mid-term plan)

1. Enhance mid/long-term priority areas（See next page）

Main
initiatives

Waste to Resources, Carbon-neutral business,
Combined utility service, Core infrastructure

2. Expand overseas business enhance EPC competitiveness, engage in
ODA, pursue M&A synergies in chemical plant field, participation in local
business in environmental, water and recycling fields

3. Promote DX initiatives

67

JFE Engineering

Engineering Business’s Main initiatives

ーEnhancing mid/long-term priority areasー• Expand engineering business as a growth sector by helping to solve pressing issues in
global society, in view of increasing importance of the environmental, recycling and renewableenergy fields.

• Expand revenue and profit by setting the following four priority areas:

Waste to Resource

FY2024 revenue target¥290 billion

Carbon Neutral

FY2024 revenue target¥80 billion• Put priority in renewable energy(offshore wind-power generation,
biomass power plant, solar power
plant, geothermal power plant etc.)• Establish stable profit basein domestic environment
business• Priority investment and expansionof domestic market in recycling
business* *Food, Plastic, Incineration and Power generation• Develop carbon neutral
technologies.

Combined utility
services

FY2024 revenue target• Shift to comprehensive businessmodel, including for efficient
operation of facilities to contributeto energy savings anddecarbonization

Water
supply¥20 billion

Gas
Electricity
SupplyRecycling etc

Core infrastructure

FY2024 revenue target¥260 billion• New technologies to address newly arising needs forstrengthening and improving life of infrastructure• Strengthening of existing infrastructure →install new
product and method for construction• Improving life of existing infrastructure→install new
materials and new products

1. Waste to Resource：Recycling and waste-to-power generation etc. 2. Carbon neutral：Renewable energy, carbon recycling etc.
3. Combines utility services: contribute to the local-production and local-consumption (circular economy) by mutual combination among
various operation and maintenance business such as water, gas, electricity supply and recycling business/
68
4. Core infrastructure：infrastructure business to establish social foundation such as bridge and pipeline.

JFE Shoji

7 th mid-term business plan <Trading Business>

Establish growth foundation by enhancing SCM
TargetFY2024（bn.）

Segment profit
40

20

0

40bn.

【Segment Profit】
20.3

23.5

¥40 billion

27.6

Equipment & Business Investment ：Approx. ¥120 billion over 4 years

4th mid-term ave.

5th mid-term ave.

6th mid-term ave.

※4th and 5th mid-term used J-GAAPFY2024
7次中期(Final Year of 7th
mid-term plan)

1. Proceed key strategies for growthMain
initiatives

Establish No.1 position in global processing & distribution of electrical steel sheet,
Strengthen SCM of automotive steel composite materials, Accelerate efforts inoverseas construction materials business, Fully capture steel demand in Japan

2. Strengthen purchasing & sales capabilities（expand non-JFE Steelbusiness）
Increase sales of both JFE group products and alliance-partner products as well as actively
expand business with other suppliers’ products

3. Seize new business opportunities
Expand environmental-solutions business, DX initiatives

69

Trading Business’s Main initiatives

JFE ShojiーKey Strategies for growth, Strengthen purchasing and sales capabilitiesー

Strengthen SCM of Automotive steel
Enhance SCM for high-tensile steel both inoverseas and domestic market to increase
sales of JFE’s strategic products
Further collaboration with JFE Steel both indomestic and overseas market• Along with the EV and HEV promotion and increasingneeds for lighter body of automobiles, application
volume of high-tensile steel for automotive is
expected to increase because of its characteristics
and environmental-friendly advantages.

China
ASEAN

Japan

US

Strengthen SCM along withgroupwide optimum businessacross four-pillar regions

Accelerate efforts in overseas
construction materials business• In ASEAN and North American regions, expand
trading in this sector and collaborate with local
companies to strengthen business foundations.

Fully Capture steel demand in Japan
Increase earnings by enhancing JFE Group’s
presence through expansion of function(quality) and additional trading (quantity)

Strengthen processing and distribution
in domestic steel business• Strengthen SCM continue to strengthen collaboration
beyond group boundaries and establish optimum
processing and distribution system• Widen processing functions to expand businessexpand capabilities including secondary and tertiary
processing to build strong foundation to meet various
types of clients’ needs

Pursue the best sales structure by sharing
strategies with JFE Steel in the domestic
market, which is the most critical

Expand non-JFE Steel business• Aim to expand business to meet clients’ needs.
Increase sales of both JFE group products and alliancepartner products as well as actively expand businesswith other suppliers’ products
70JFE-HDJFE Group’s DX strategies• Promote DX in every business area such as advancing productivity throughinnovation, transforming exiting businesses and creating new businesses.
• Proactively invest money and human resource necessary for DX：
DX investment approx. 120 billion yen over 4 years

JFE SteelUse digital technology to streamline production
operations and implement new growthstrategies
TargetInvestment

Labor productivity: 20% improve**FY2024 structural reform 13%+ DX effects etc.

115 billion yen
over 4 years

JFE Engineering
Digitalize entire business and provide
new digital services to customers.
TargetDesign efficiency: 20% increase
in FY2024

JFE Shoji
Improve customer service, pursue new
businesses by leveraging DX＜JFE Steel’s initiatives＞• Enhance competitiveness by introducing cyber-physical systems on all
production lines• Improve production efficiency, labor productivity and yield ratio etc.

••

Utilize digital technologies to raise customer satisfaction through quality
enhancements and better delivery services.
Actively expand solutions businesses

71JFE-HD

Balance Financial Soundness with Effective Investment based ona “select and concentrate” approach
Selective maintenance investment, focusing on investments for enhancing
competitiveness and establishing stable profit base
Ensure earning source by asset compression••

1. Equipment & Business Investment about 1,450 billion yen over 4 years• Equipment investment：Approx. 1,200 billion yen over 4 years
GX：About ¥340 billion over 4 years*, DX：About ¥120 billion 4 years
Execute maintenance investment carefully selected from the perspectives of effectiveness and necessity
Shift focus on investment for improving profitability and cutting-edge facilities• Business investment：About 250 billion yen over 4 years
Steel business：expand overseas insider businesses, Engineering business：expand operation &maintenance business and overseas business*Steel Business：¥160 billion
Trading business：business investment including M&A for increasing
Engineering Business：¥130 billion
earnings from processing and distribution businessTrading Business： ¥50 billion

2.
•

Ensuring earning source
Generate cash by asset compression：Approx. 200 billion yen over 4 years
Assets that contribute little to earnings or are tied to unprofitable businesses**3.
•

Returns to shareholders
Dividend payout ratio: Around 30% on par with the target during 6 th mid-termbusiness plan**Regarding development plans for partial area of Keihin district resulting from structural reform（Ogishima area):
We will disclose development plans in FY2023, and strive to see some properties put to new use by FY2030.
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Main Financial Data and Performance & Profitability Targets

Operatingcompanies

Consolidated

7 th mid-termbusiness plan
FY2024FY2020
ActualBusiness profit¥ 320.0 billion¥ -12.9 billion

Profit attributable to owners of the parent¥ 220.0 billion¥ -21.8 billion

10%

-1.3%

About 3x8.1x

About 70%

93.2%

10,000 yen/ton¥ 230.0 billion-3,000 yen/ ton¥ -65.4 billion

Engineering business Segment profit
Revenue¥ 35.0 billion¥ 650.0 billion¥ 24.0 billion¥ 485.7 billion

Trading Business Segment profit¥ 40.0 billion¥ 20.0 billion

ROE
Debt/EBITDA
D/E*1
Steel businessProfit per ton*2
Segment profit

Payout ratio*1 For liabilities with equity subject to credit ratings, theseequities reflect the evaluations of rating agencies

7 th mid-termbusiness plan
Around 30%

6 th mid-termbusiness plan
Around 30%*2 Steel business profit per ton (consolidated segment profit /non-consolidated sales volume)73

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