Flash Report
Consolidated Basis
Results for Fiscal 2020
(April 1, 2020―March 31, 2021)＜under IFRS＞
May 7, 2021
Nippon Steel Corporation
Tokyo, Nagoya, Sapporo, Fukuoka stock exchanges
5401
https://www.nipponsteel.com/en/index.html
Eiji Hashimoto, Representative Director and President
Shinnosuke Arita, General Manager, Public Relations Center+81-3-6867-2135, 2146, 2977, 3419
June 23, 2021
June 24, 2021
June 23, 2021
Yes
Yes (for investment analysts)

Company name:
Stock listing:Code number:
URL:
Representative:
Contact:
Telephone:
Scheduled date to Ordinary General Meeting of Shareholders:
Scheduled date to pay dividends:
Scheduled date to submit Securities Report:
Preparation of supplemental explanatory materials:
Holding of financial results meeting:（All amounts have been truncated to the nearest millions of Japanese yen.）

1. Consolidated Operating Results, Financial Position and Cash-Flows for Fiscal 2020
(April 1, 2020―March 31, 2021)(1) Consolidated Operating Results
Revenue

Fiscal 2020

Millions ofyen
4,829,272

Fiscal 2019

5,921,525

Business profit (*)%(18.4)

Millions ofyen
110,046(4.2)(284,417)

―

%

Total
comprehensive
income for the year―

（Percentage figures are changes from the same period of the previous fiscal year.）
Profit for the year
Profit before
Operating profit
Profit for the year
attributable toincome taxes
owners of the parent
Millions ofMillions ofMillions ofMillions of
%
%
%
%
yen
yen
yen
yen
11,381―(8,656)―(19,327)―(32,432)―(406,119)――(426,120)(431,513)―

Basic earnings
per share

Diluted earnings
per share

Ratio of profit
to total equity
attributable toowners of theparentRatio of profit
before income
taxes to total
assetsRatio ofbusiness profit
to revenue

Ratio ofoperating profit
to revenue

Yen

Yen

%

%

%

%

Fiscal 2020

Millions ofyen
143,233

Fiscal 2019

(543,642)(For reference)

Share of profit in investments accounted for using the equity method:%―(423,572)―(35.22)

―

(1.2)

(0.1)

2.3

0.2

―

(468.74)―(14.7)

(5.5)

(4.8)

(6.9)

Fiscal 2020 ¥55,220 million
Fiscal 2019 ¥38,395 million(*)Business Profit on Consolidated Statements of Profit or Loss indicates the results of sustainable business activities, and is an importantmeasure to compare and evaluate the Company’s consolidated performance continuously. It is defined as being deducted Cost of sales,
Selling general and administrative expenses and Other operating expenses from Revenue, and added Share of profit in investments
accounted for using the equity method and Other operating income. Other operating income and expenses are composed mainly of
Dividend income, Foreign exchange gains or losses, Losses on disposal of fixed assets.

(2) Consolidated Financial Position
Total assets

Total equity

Total equity
attributable to ownersof the parent

Ratio of total equity
attributable to ownersof the parent to total
assetsassets%Total equity
attributable to ownersof the parent per share

Millions of yen

Millions of yen

Millions of yen

Fiscal 2020

7,573,946

3,131,387

2,759,996

36.4

Yen
2,997.53

Fiscal 2019

7,444,965

2,996,631

2,641,618

35.5

2,869.19(3) Consolidated Statements of Cash-Flows
Cash flows from operating
activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of the year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Fiscal 2020

403,185(389,035)

52,694359,465

Fiscal 2019494,330(345,627)(14,582)

289,459

2. Dividends
Dividends per share
End of first quarterEnd of second quarterEnd of third quarterEnd of fiscal year

Fiscal year

Yen

Yen

Yen

Yen

Yen

Fiscal 2019

―

10.00

―

0.00

10.00

Fiscal 2020

―

0.00

―

10.00

10.00

Fiscal 2021 (Forecasts)

―

―

―

―

―

Cash dividends

Ratio of cash dividends
to profit

Millions of yen%

Ratio of cash dividends
to total equity attributableto owners of the parent%

Fiscal 2019

9,220

―

0.3

Fiscal 2020

9,219

―

0.3

Fiscal 2021 (Forecasts)

Notes:―The Company has not determined a dividend distribution plan for the second quarter of fiscal 2021 and fiscal 2021.
The dividend distribution plan will be disclosed when it becomes available.

3. Consolidated Financial Forecasts for Fiscal 2021 (April 1, 2021―March 31, 2022)（Percentage figures are changes from the same period of the previous fiscal year.）
Revenue
Millions of yen

Total equity attributable toowners of the parent

Business profit%

Millions of yen%

Millions of yen

Basic earnings per share%

Yen

The first half of fiscal 2021

3,000,000

33.8

250,000―

130,000―

141.00Fiscal 2021

6,000,000

24.2

450,000

308.9

240,000―

261.00For further details, please refer to page 7, “1. Summary of Operating Results (2) Outlook for the Fiscal Year Ending March 31, 2022 (Fiscal
2021)”and “Results and dividends of Fiscal 2020 (Year ended March 31, 2021).”* Notes(1) Changes in significant subsidiaries during the period: None
(2) Changes in accounting policies and changes in accounting estimates(a) Changes in accounting policies required by IFRS: None(b) Changes other than those in (a) above: None(c) Changes in accounting estimates: Yes
Note: For further details, please refer to page 15, “3. Consolidated Financial Statements and Major Notes(5) Notes to the Consolidated Financial Statements (Changes in Accounting Estimates).”(3) Number of shares outstanding (common shares)(a) Number of shares outstanding at the end of the period (including treasury stock)
Fiscal 2020
950,321,402 sharesFiscal 2019
950,321,402 shares(b) Number of treasury stock at the end of the period
Fiscal 2020
29,564,533 sharesFiscal 2019
29,638,468 shares(c) Weighted average number of shares outstanding
Fiscal 2020
920,745,340 sharesFiscal 2019
920,570,952 shares

(For Reference)
1. A Summary of Non-Consolidated Operating Results and Financial Position for Fiscal 2020
(April 1, 2020―March 31, 2021)(1) Non-Consolidated Operating Results（Percentage figures are changes from the same period of the previous fiscal year.）Net sales

Operating profit

Ordinary profit

Profit for the year

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Fiscal 2020

2,820,992(14.8)(104,779)―(25,446)―(42,098)―

Fiscal 2019

3,312,949(7.0)(119,374)―(40,410)―(455,641)―

Earnings per share

Diluted earnings
per share

Yen

Yen

Fiscal 2020

(45.66)―

Fiscal 2019(494.18)―(2) Non-Consolidated Financial Position
Total assets

Net assets

Ratio ofshareholders’ equity
to total assets

Net assets per share

Millions of yen

Millions of yen%

Yen

Fiscal 2020

5,253,847

1,467,570

27.9

1,591.76

Fiscal 2019

5,009,656

1,446,409

28.9

1,568.77(For reference) Shareholders’ equity:

Fiscal 2020 ¥1,467,570 million
Fiscal 2019 ¥1,446,409 million

2. Non-Consolidated Financial Forecasts for Fiscal 2021 (April 1, 2021―March 31, 2022)（Percentage figures are changes from the same period of the previous fiscal year.）Net sales

Fiscal 2021

Ordinary profit

Profit for the year

Earnings per share

Millions of yen%

Millions of yen%

Millions of yen%

Yen

4,000,000

41.8

270,000―

200,000―

217.00* This flash report is not subject to audit procedures.
* Explanation of the appropriate use of performance forecasts and other related items(Explanation of the appropriate use of performance forecasts)
The forward-looking statements included in this flash report are based on the assumptions, forecasts, and plans of the Company as of thedate on which this document is made public. The Company’s actual results may differ substantially from such statements due to various
risks and uncertainties.

Nippon Steel Corporation (5401)
Fiscal 2020

Index of Attached Documents
1. Summary of Operating Results ....................................................................................................................................2(1) Summary of Operating Results and Financial Position
for Fiscal Year Ended March 31, 2021 (Fiscal 2020) .............................................................................................2(2) Outlook for the Fiscal Year Ending March 31, 2022 (Fiscal 2021) .........................................................................7
2. Basic Rationale for Selection of Accounting Standards ..............................................................................................8
3. Consolidated Financial Statements and Major Notes ..................................................................................................9(1) Consolidated Statements of Financial Position ........................................................................................................9(2) Consolidated Statements of Profit or Loss and Consolidated Statements of Comprehensive Income ...................11(3) Consolidated Statements of Changes in Equity......................................................................................................12(4) Consolidated Statements of Cash-Flows ................................................................................................................14(5) Notes to the Consolidated Financial Statements ....................................................................................................15(Going Concern Assumption) ............................................................................................................................15(Changes in Accounting Estimates) ..................................................................................................................15(Segment Information) ......................................................................................................................................16(Earnings per Share) ..........................................................................................................................................17(Significant Subsequent Events) .......................................................................................................................17

1

Nippon Steel Corporation (5401)
Fiscal 2020

1. Summary of Operating Results(1) Summary of Operating Results and Financial Position for Fiscal Year Ended March 31, 2021 (Fiscal 2020)
Overview of Conditions in Fiscal 2020
In fiscal 2020, the global economy substantially decelerated as economic activity was reduced mainly in the first half by
the spread of COVID-19 worldwide. The Japanese economy also deteriorated due to global economic developments andthe spread of COVID-19. In the second half of the year, the domestic and overseas economies began to show signs ofrecovery but the pace of recovery varied by country. In Japan, private consumption and other aspects of the economy
showed signs of improvement but have faltered again, while China was one of the first countries that resumed economic
activity and steadily recovered, mainly driven by fixed asset investment.

Demand for steel materials declined sharply in the first half of the year, both in Japan and overseas, due to the spread of
COVID-19. In the second half, Japan recovered mainly in the manufacturing sector, notably in the automobile sector, but
the level of economic recovery remained at a low level compared to before the COVID-19 outbreak. The steel market rosedue to continued high levels of domestic demand and production in China, which accounts for about 60% of world crude
steel production. Other regions’ tighter steel supply-demand conditions, which were in line with their economic resumption,
also helped to boost the steel market.
In this business environment, the Nippon Steel Group (“the Group”) strived to fully establish the overall stability of its
facilities and operations, improve its long-term contractual prices and variable costs, and substantially reduce fixed costs.
In addition, the Group has been working to enhance its earnings base, including the structural measures for production
facilities decided in February of last year, and to reform the management structure. The Group has also been working
swiftly and appropriately to respond to changes in steel demand, caused by the spread of COVID-19.

Operating Results by Segment in Fiscal 2020
The Nippon Steel Group’s business segments strived to respond to their changing business environments and have applied
their utmost management effort. The operating results by business segment are as follows.
(Billions of yen)
Revenue
Steelmaking and Steel Fabrication
Engineering and Construction
Chemicals and Materials
System Solutions
Total
Adjustments
Consolidated total

Business Profit

Fiscal 2020

Fiscal 2019

Fiscal 2020

Fiscal 2019

4,228.4
324.4
178.6
252.4
4,984.0(154.7)
4,829.2

5,257.3
340.4
215.7
273.2
6,086.7(165.2)
5,921.5

63.5
17.7
7.6
23.9
112.8
(2.7)
110.0

(325.3)
10.7
18.4
26.1
(269.9)(14.4)(284.4)2

Nippon Steel Corporation (5401)
Fiscal 2020

Steelmaking and Steel Fabrication
The Steelmaking and Steel Fabrication segment strived to fully establish the overall stability of its facilities and operations,while taking every possible measures on the safety, environment, disaster prevention, quality management, and compliance,
improve its long-term contractual prices and variable costs, and substantially reduce fixed costs. In addition, the segment
has been working to enhance its earnings base, including the structural measures for production facilities decided in
February of last year, and to reform the management structure. In response to changes in steel demand, caused by the
spread of COVID-19, the segment has promptly and appropriately implemented measures, such as production management(including temporary suspension and re-operation of blast furnaces), implementation of the business continuity plan (BCP),
temporary business shutdowns, and measures in light of the deterioration in operating cash flow. As for the Steelmaking
and Steel Fabrication segment’s operating results in fiscal 2020, it recorded a significant loss in the first half, mainly due
to a decline in production and shipping volumes, driven by the decline in steel demand, and deterioration in Group
companies' profits. In the second half, the segment worked on production in prompt, appropriate response to a recovery insteel demand, mainly from the manufacturing industry, and substantially reduced fixed costs and improved variable costs,
which resulted in turning into a profitable structure in non-consolidated operating income. For the full year, the segment
recorded revenue of ¥4,228.4 billion (compared to ¥5,257.3 billion in fiscal 2019) and business profit of ¥63.5 billion(compared to business loss of ¥325.3 billion).

Specifically, the following efforts were made during fiscal 2020.
In order to strengthen the competitiveness of the domestic mother mills that support the global strategy, Nippon Steel (“theCompany”) needs to invest in leading-edge facilities and expanding the supply capacity of strategic products, and to reduce
costs by concentrating production of high-value-added products. In order to achieve these aims, the Steelmaking and Steel
Fabrication segment has moved forward with the transition to an optimal production framework in Japan based on thoroughselection of products and facilities. In fiscal 2020, the blast furnace and continuous casting machine in the Kyushu Works
Yawata Area (Kokura), the small-diameter seamless steel pipe mill in the East Nippon Works Kimitsu Area (Tokyo), thetin production line in the Setouchi Works Hirohata Area, and the electro-galvanizing lines in the Setouchi Works Hanshin
Area (Sakai) were shut down, and production was consolidated into competitive lines. In addition, the No. 2 blast furnaceof Hokkai Steel Co., Ltd. (on the Muroran Works site) was relined in order to maintain and strengthen the health of the
facilities and to further improve productivity.

Utilizing the world's largest and best-in-class technology development capabilities, Nippon Steel has been striving tostrengthen both the quality and volume of its globally-competitive strategic products, maximize marginal profits, andcontribute to the realization of a sustainable society. In fiscal 2020, the Company decided to expand the production facilities
for electrical steel sheets in the Setouchi Works Hirohata Area, with the aim of meeting growing steel demand related toautomobiles and electric power and the need for higher-grade products. In January 2021, the No. 6 CGL (Continuous HotDip Galvanizing Line) in the East Nippon Works Kimitsu Area started commercial operation to strengthen the Company’s
supply of ultra-high-tensile steel sheets.

3

Nippon Steel Corporation (5401)
Fiscal 2020

Overseas, the Steelmaking and Steel Fabrication segment focused on areas where growth in steel demand is anticipated,
and areas where the Group's technological and product capabilities can be utilized, contributing to the development ofcountries and regions, and striving to increase the corporate value of Nippon Steel. In fiscal 2020, the Company decided
to establish a new electric arc furnace at AM/NS Calvert LLC, a joint venture with ArcelorMittal in the United States, inorder to strengthen the production and supply of full-line high-grade steel sheets in North America, including leading-edge
products. In contrast, the segment sold shares of the automobile steel sheet businesses in the United States, reorganized its
tin business in China and other areas, and withdrew from the seamless pipe joint venture business in Brazil. The aim ofthese efforts to select and concentrate businesses is to properly reallocate management resources.

In order to appropriately respond to greater fluctuation in the business environment and acceleration in the speed of change,
Nippon Steel has reformed the management structure. With regard to corporate governance, the Company moved to a“Company with an Audit & Supervisory Committee” in June 2020 to expedite management decision-making, enhance
discussions at the Board of Directors, and strengthen its function to supervise management. In addition, the Company
decided to further streamline its business operations by slimming down the company-wide organization, including the
integration and reorganization of its steel mills in April 2020.

Nippon Steel is actively promoting digital transformation (DX) and strengthening its business competitiveness by use ofdata and digital technologies. The Company intends to carry out business process innovation and production process
innovation by creating Kaizen (improvement) and Kaikaku (reform) cycles through the building of a system to share andutilize a vast amount of corporate-wide data and the use of connected data, aiming to accelerate decision-making andimprove problem solving capabilities. In fiscal 2020, the Steelmaking and Steel Fabrication segment accelerated DX at
manufacturing sites by starting long-term operational tests of AI technology software utilizing NEC Corporation's "invariant analysis technology" in order to build a facility condition monitoring platform at the steelworks.

On the environmental front, Nippon Steel has contributed to energy conservation, CO2 emissions reduction, and thecreation of a circular economy by further improving energy efficiency at the steel manufacturing stage, which is at thehighest level in the world, and by developing and producing eco-friendly products. Amid increasing global awareness ofclimate change issues, the Company has established a cross-functional Zero Carbon Steel Committee, which began
discussions on the Company's scenario for a decarbonized society (the target for 2030 and vision for 2050) and researchand development on low CO₂ technology. In March 2021, the Company announced "Nippon Steel Carbon Neutral Vision
2050 - A Challenge of Zero-Carbon Steel"—a new, unique initiative to take up the challenge to realize carbon neutrality
in 2050 as the Company’s priority issue.

Nippon Steel has also been actively engaged in diversity and inclusion in order to create a company where its diverse
workforce can be proud, feel rewarded, and be empowered. In fiscal 2020, the Company decided to open its own childcare
nursery in the East Nippon Works Kashima Area and the Muroran Works. In March 2021, the Company was selected as a"Nadeshiko" brand name by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange, which signifies
a "company with excellent performance in promoting women's activities."

4

Nippon Steel Corporation (5401)
Fiscal 2020

Following its corporate philosophy of pursuing world-leading technologies and manufacturing capabilities andcontributing to society by providing excellent products and services, the Nippon Steel Group will strive to contribute to
the realization of a sustainable society and to enhance corporate value.

Engineering and Construction
Nippon Steel Engineering Co., Ltd. posted a decrease in overall revenue due to a decline in the scale of its electric powerbusiness, but the overall Engineering and Construction segment recorded an increase in profit, supported mainly by thesteady implementation and management of large-scale projects that were ordered in the past fiscal year, and the completionof several projects. These large-scale projects included facility renovation works in the steelmaking plant sector, a gasfired melting furnace in the environment and energy sector, and the construction of distribution facilities in the urban
infrastructure sector. The spread of COVID-19 caused delays in orders and processes for some projects but the segment
endeavored to thoroughly respond to changes in the business environment. The Engineering and Construction segment
recorded revenue of ¥324.4 billion (compared to ¥340.4 billion in fiscal 2019) and business profit of ¥17.7 billion(compared to ¥10.7 billion).

Chemicals and Materials
Nippon Steel Chemical & Materials Co., Ltd. experienced severe profit conditions in the first half of fiscal 2020, amid theglobal economic slowdown caused by the spread of COVID-19. In the second half, however, the business environment
improved, and partly due to efforts to improve profitability, such as cost reduction, and changes in the retirement benefit
system, the company managed to record a profit for the full year. In the Coal Chemical business, demand for needle cokeused in graphite electrodes continued to decline. In the Chemicals business, the market for styrene monomer and bisphenol
A, which had been weak since the beginning of 2020, recovered in the second half. In the Functional Materials business,sales of semiconductor-related materials and LCD materials remained strong throughout the fiscal year, and sales ofsmartphone materials, which had been sluggish at the beginning of the fiscal year, started to recover. In the Composite
Materials business, carbon fiber reinforced materials for civil engineering and construction recorded record-high annual
sales, and epoxy resin sales increased for automotive equipment and semiconductor package substrates. The Chemicals &Materials segment recorded revenue of ¥178.6 billion (compared to ¥215.7 billion in fiscal 2019) and business profit of¥7.6 billion (compared to ¥18.4 billion).

System Solutions
NS Solutions Corporation has provided digital workplace solutions and other services for IT needs to accommodate newworkstyles amid harsh economic activities caused by the spread of COVID-19. In order to support customers’ promotionof DX, the company has made efforts to provide digital innovation co-creation programs and promote local 5G and IoX
solutions, centered on the manufacturing and energy industries.
However, the System Solutions segment recorded a decline in revenue mainly due to a decrease relative to the booking ofa large-scale infrastructure project in fiscal 2019. The segment’s business profit also decreased from the previous year,

5Nippon Steel Corporation (5401)
Fiscal 2020

mainly reflecting a decline in gross profit. The System Solutions segment recorded revenue of ¥252.4 billion (comparedto ¥273.2 billion in fiscal 2019) and business profit of ¥23.9 billion (compared to ¥26.1 billion).

Revenue and Profit
With regard to the consolidated business results for fiscal 2020, Nippon Steel recorded a significant loss in the first half,
mainly due to a decline in production and shipping volumes, driven by the decline in steel demand as affected by the spreadof COVID-19, and deterioration in Group companies' profits. In the second half, the Company worked on production inprompt, appropriate response to a recovery in steel demand, mainly from the manufacturing industry, and substantiallyreduced fixed costs and improved variable costs, which resulted in turning into a profitable structure in non-consolidated
operating income. For the full fiscal year, the Company recorded consolidated revenue of ¥4,829.2 billion (compared to¥5,921.5 billion in fiscal 2019) and business profit of ¥110.0 billion (compared to business loss of ¥284.4 billion). In
addition, due to losses from reorganization and other factors, the Company posted loss attributable to owners of the parentof ¥32.4 billion (compared to loss of ¥431.5 billion).

Assets, Liabilities, Equity, and Cash Flows
Consolidated total assets as of March 31, 2021 were ¥7,573.9 billion, an increase of ¥128.9 billion from ¥7,444.9 billion
as of March 31, 2020. The main factors were an increase of ¥70.0 billion in cash and cash equivalents, an increase of¥142.3 billion in property, plant and equipment, and an increase of ¥147.1 billion in other financial assets (non-current
assets). The increase was partially offset by a decrease of ¥182.8 billion in inventories, caused by production in responseto changes in steel demand in Japan and overseas, and a decrease of ¥60.9 billion in investments accounted for using theequity method, such as the sale of shares of I/N Tek and I/N Kote, which were engaged in the cold-rolling and galvanizing
steel sheet business in the United States, and the sale of shares of VSB, which was engaged in the seamless pipe businessin Brazil.

Consolidated total liabilities as of March 31, 2021 were ¥4,442.5 billion, a decrease of ¥5.7 billion from ¥4,448.3 billion
as of March 31, 2020. Trade and other payables decreased by ¥67.0 billion, while interest-bearing debt increased by ¥70.5
billion, from ¥2,488.7 billion as of March 31, 2020 to ¥2,559.2 billion as of March 31, 2021, stemming from the refinancing
of subordinated bonds and other factors.

Consolidated total equity as of March 31, 2021 was ¥3,131.3 billion, an increase of ¥134.7 billion from ¥2,996.6 billion
as of March 31, 2020. This was primarily contributed by an increase of ¥122.0 billion in the fair value of financial assets
measured at fair value through other comprehensive income and an increase of ¥45.1 billion in remeasurements of defined
benefit plans, which more than offset a decrease from loss for the year attributable to owners of the parent of ¥32.4 billion.
As a result, total equity attributable to owners of the parent as of March 31, 2021 amounted to ¥2,759.9 billion, and theratio of interest-bearing debt to total equity attributable to owners of the parent (D/E ratio) was 0.93 times (0.70 times after
adjusting for equity credit attributes of subordinated loans and subordinated bonds).

Cash flows from operating activities in fiscal 2020 amounted to an inflow of ¥403.1 billion (compared to an inflow of¥494.3 billion in fiscal 2019). The main inflow factors were depreciation and amortization of ¥290.8 billion, losses from6

Nippon Steel Corporation (5401)
Fiscal 2020

reorganization of ¥98.6 billion, and a decrease of ¥171.3 billion in inventories, on top of loss before income taxes of ¥8.6
billion. The outflow factors included deduction adjustment for share of profit in investments accounted for using the equity
method of ¥55.2 billion and a decrease of ¥66.3 billion in trade and other payables.

Cash flows from investing activities amounted to an outflow of ¥389.0 billion (compared to an outflow of ¥345.6 billion
in fiscal 2019), as an outflow of ¥459.8 billion from purchases of property, plant and equipment and intangible assets andother outflows exceeded inflows, such as proceeds of ¥37.3 billion from sales of investment securities and proceeds of¥20.5 billion from sale of investments in associates. As a result, free cash flow was an inflow of ¥14.1 billion (compared
to an inflow of ¥148.7 billion in fiscal 2019).

Cash flows from financing activities amounted to an inflow of ¥52.6 billion (compared to an outflow of ¥14.5 billion in
fiscal 2019), largely due to an increase in interest-bearing debt of ¥45.9 billion. As a result of these cash flows, cash andcash equivalents at the end of the fiscal year stood at ¥359.4billion.

Basic Policy on Profit Distribution and Fiscal 2020 Dividend Distribution
Nippon Steel’s basic profit distribution policy is to pay dividends from distributable funds at the end of the first half
(interim) and second half (year-end) of the fiscal year, in consideration of the consolidated operating results and suchfactors as capital requirements for investment and other activities aimed at raising corporate value and performanceprospects, while also considering the financial structure of the Company on both consolidated and non-consolidated bases.
The Company has adopted a consolidated annual payout ratio target of around 30% as the benchmark for the “payment ofdividends from distributable funds in consideration of the consolidated operating results.” The level of the interim dividend
is determined in consideration of the first-half performance results and forecasts for the full fiscal year.

Nippon Steel forwent an interim dividend payment, in accordance with the basic profit distribution policy. Regarding the
fiscal year-end dividend, in line with the previously stated policy and after giving due consideration to the recent
performance recovery, performance outlook, and other factors, management has decided to propose a year-end dividend
payment of ¥10 per share (making an annual dividend of ¥10 per share), as announced at the time of third quarter
performance results (February 5, 2021), at the General Meeting of Shareholders.

(2) Outlook for the Fiscal Year Ending March 31, 2022 (Fiscal 2021)
Outlook for Operating Performance in Fiscal 2021
The world economy is expected to recover from the slowdown caused by the spread of COVID-19, and Japan's economy
will also recover. As for the steel-making business environment, however, severe conditions are likely to continue,
including a decline in domestic steel demand, which has continued since before the spread of COVID-19, the persistently
high prices of iron ore and other main raw materials due to the high level of pig iron production in China, and sluggish
new investments in the energy sector due to the sluggish oil prices.

7

Nippon Steel Corporation (5401)
Fiscal 2020

Steel demand is expected to maintain the recovery trend in Japan and overseas and the tightening supply-demandenvironment is likely to continue. In China, the government's continued economic stimulus measures are likely to resultin high levels of steel consumption and crude steel production. The steel market is on an upward trend both in Japan andoverseas, reflecting the tight supply-demand conditions, and conditions, including the impact of further spread of COVID19, will warrant continued monitoring.

Under these circumstances, based on the non-consolidated operating profit generating structure, which was established bysignificant reduction in fixed costs and improvement in variable costs, Nippon Steel will continue to work on fully
establishing the overall stability of its facilities and operations, improve its long-term contractual prices, and implement
measures to securely benefit from the solid business environment, including the export market. The Company thereby
strives for high-level profit generation even at a low level in production and shipment volumes. As for the Company’s
forecasts for fiscal 2021, it is projecting consolidated revenue of ¥6,000 billion, business profit of ¥450 billion, and profit
attributable to owners of the parent of ¥240 billion.
In March 2021, Nippon Steel developed “the Nippon Steel Group’s Medium- to Long-term Management Plan” with theaim of continually growing to become “the best steelmaker with world-leading capabilities” that contributes to Japan’s
industrial competitiveness from the present and into the future. In the domestic steel business, the Company will build astrong framework that enables efficient production of the highest grade products. In overseas steel business, the Groupwill expand its integrated production framework in the center of demand and ensure that local demand is captured in
growing markets. The plan is to achieve 100 million tons of global crude steel capacity per annum for the Group by
combining the efforts of its mother mills in Japan and local mills located overseas. The Company will also continue torespond to climate change, aiming to achieve carbon neutrality by 2050. Furthermore, it will push hard for DX whileaiming to become a digitally advanced company in the steel industry.

Outlook for Distribution of Dividends for Fiscal 2021
Nippon Steel has not determined a dividend distribution plan for fiscal 2021. The dividend forecast will be announced assoon as disclosure is possible.

2. Basic Rationale for Selection of Accounting Standards
The Nippon Steel Group has applied the International Financial Reporting Standards (IFRS) to financial statements forpurposes of increasing corporate value through enhancement of global business development and improving international
comparability of financial information in capital markets.

8Nippon Steel Corporation (5401)
Fiscal 2020

3. Consolidated Financial Statements and Major Notes(1) Consolidated Statements of Financial Position(Millions of Yen)
March 31, 2020

ASSETS
Current assets :Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets

March 31, 2021

289,459
826,596
1,532,181
17,340
119,396359,465
805,306
1,349,355
27,772
130,786

2,784,974

2,672,686

2,812,542
93,66345,486
96,677878,271
481,11758,643
186,457
7,132

2,954,938
88,55946,341
95,826817,328
628,226
110,396
153,123
6,519

Total non-current assets

4,659,990

4,901,260

Total assets

7,444,965

7,573,946

Total current assets
Non-current assets :Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Investments accounted for using the equity method
Other financial assets
Defined benefit assets
Deferred tax assets
Other non-current assets

9Nippon Steel Corporation (5401)
Fiscal 2020

(Millions of Yen)
March 31, 2020

LIABILITIESMarch 31, 2021

Current liabilities :Trade and other payables
Bonds, borrowings and lease liabilities
Other financial liabilities
Income taxes payable
Other current liabilities

1,449,801
376,900
2,189
27,32338,978

1,382,761
308,985
1,250
24,25654,077

Total current liabilities

1,895,192

1,771,331

Non-current liabilities :Bonds, borrowings and lease liabilities
Other financial liabilities
Defined benefit liabilities
Deferred tax liabilities
Other non-current liabilities

2,111,841
4,621
236,758
27,765
172,154

2,250,246
4,784
189,453
37,385
189,358

Total non-current liabilities

2,553,141

2,671,228

Total liabilities

4,448,333

4,442,559

419,524
394,404
1,870,948(58,505)
15,245419,524
393,168
1,910,333(58,342)
95,3112,641,618

2,759,996

355,013

371,390

Total equity

2,996,631

3,131,387

Total liabilities and equity

7,444,965

7,573,946

EQUITY
Common stock
Capital surplus
Retained earnings
Treasury stock
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests

10Nippon Steel Corporation (5401)
Fiscal 2020

(2) Consolidated Statements of Profit or Loss andConsolidated Statements of Comprehensive Income
Consolidated Statements of Profit or Loss

(Millions of Yen)
Fiscal 2019

Revenue
Cost of sales
Gross profit

Fiscal 2020

5,921,525(5,312,367)
609,158

4,829,272(4,263,940)
565,332

Selling, general and administrative expenses
Share of profit in investments accounted for using the equity method
Other operating income
Other operating expenses
Business profit (loss)(571,781)
38,395
104,844(465,035)(284,417)(469,133)
55,22049,710(91,083)
110,046

Losses on reorganization
Operating profit (loss)(121,702)(406,119)(98,665)
11,381

Finance income
Finance costs
Profit (loss) before income taxes

7,706(25,159)(423,572)

5,367(25,404)(8,656)

Income tax expense
Profit (loss) for the year

(2,548)(426,120)(10,671)(19,327)

Profit (loss) for the year attributable to :Owners of the parent
Non-controlling interests(431,513)
5,393(32,432)
13,105

Earnings (loss) per share
Basic earnings (loss) per share (Yen)(468.74)(35.22)

Consolidated Statements of Comprehensive Income(Millions of Yen)
Fiscal 2019

Profit (loss) for the year
Other comprehensive income
Items that cannot be reclassified to profit or loss
Changes in fair value of financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans
Share of other comprehensive income of investments accounted
for using the equity method
Subtotal

Fiscal 2020

(426,120)(19,327)(83,305)

125,471(1,449)42,307(6,785)

10,062(91,540)

177,841(1,821)(14,812)

5,029
2,752

(9,346)(23,062)(25,981)(15,280)

Total other comprehensive income, net of tax
Total comprehensive income for the year

(117,521)(543,642)

162,561
143,233

Comprehensive income for the year attributable to:
Owners of the parent
Non-controlling interests(543,881)
238

119,451
23,781

Items that might be reclassified to profit or loss
Changes in fair value of cash flow hedges
Foreign exchange differences on translation of foreign operations
Share of other comprehensive income of investments accounted
for using the equity method
Subtotal

11

Nippon Steel Corporation (5401)
Fiscal 2020

(3) Consolidated Statements of Changes in Equity
Fiscal 2019

(Millions of Yen)
Equity attributable to owners of the parent

Balance as of March 31, 2019

CommonCapitalRetainedstock

surplusearnings

419,524

393,917

Other components of equity
Changes in fairvalue of financial
Treasury
assets measured at Remeasurements offair value throughdefined benefit
stock
other
plans
comprehensive
income(58,831)
248,020―2,300,175

Changes of the year
Comprehensive income
Profit (loss) for the year

(431,513)

Other comprehensive income
Total comprehensive income

―

―

―

(431,513)(85,278)(2,429)(85,278)(2,429)(50,817)2,429

Transactions with owners and others
Cash dividends(46,101)

Purchases of treasury stock(49)

Disposals of treasury stock(104)

Changes in ownership interests in subsidiaries

591

Transfer from other components of equity
to retained earnings

625

48,387

Changes in scope of consolidation
Subtotal
Balance as of March 31, 2020

(250)
―

486

2,286

325

(50,817)2,429

419,524

394,404

1,870,948(58,505)

111,924―

Equity attributable to owners of the parent
Other components of equity

Changes in fairvalue of cash
flow hedges

Foreignexchangedifferences ontranslation offoreign
operations(4,433)(67,585)

176,000

3,230,788―

Other comprehensive income(387)(24,271)(112,367)

Total comprehensive income(387)(24,271)

Balance as of March 31, 2019

Total equity
attributable toowners of theparentTotal

Non-controllinginterests

Total equity

376,579

3,607,367(431,513)

5,393(426,120)(112,367)(5,154)(117,521)(112,367)(543,881)

238(543,642)

Cash dividends―(46,101)(8,045)(54,146)

Purchases of treasury stock

―

(49)

Disposals of treasury stock―

520

Changes in ownership interests in subsidiaries―

591(48,387)―

Changes of the year
Comprehensive income
Profit (loss) for the year

Transactions with owners and others

Transfer from other components of equity
to retained earnings

Balance as of March 31, 2020

520
(942)

(351)
―

―

(250)

(12,817)――(48,387)(45,288)(21,804)(67,093)(4,821)(91,857)

15,2452,641,618

355,0132,996,631

Changes in scope of consolidation
Subtotal(49)

12(13,067)

Nippon Steel Corporation (5401)
Fiscal 2020

Fiscal 2020

(Millions of Yen)
Equity attributable to owners of the parent

Balance as of March 31, 2020

CommonCapitalRetainedstock

surplusearnings

419,524

394,404

Other components of equity
Changes in fairvalue of financial
Treasury
assets measured at Remeasurements offair value throughdefined benefit
stock
other
plans
comprehensive
income(58,505)
111,924―

1,870,948

Changes of the year
Comprehensive income
Profit (loss) for the year

(32,432)

Other comprehensive income
Total comprehensive income

―

―

―

(32,432)

122,023

45,171122,023

45,171(26,647)(45,171)

Transactions with owners and others
Cash dividends
Purchases of treasury stock(52)

Disposals of treasury stock(1)

Changes in ownership interests in subsidiaries
Transfer from other components of equity
to retained earnings

71,818Changes in scope of consolidation
Subtotal
Balance as of March 31, 2021

2

1,528

(2,763)213―(1,236)

71,818163(26,647)(45,171)419,524

393,168

1,910,333(58,342)

207,300―

Equity attributable to owners of the parent
Other components of equity

Changes in fairvalue of cash
flow hedges

Foreignexchangedifferences ontranslation offoreign
operations(4,821)(91,857)

15,2452,641,618

355,0132,996,631―(32,432)

13,105(19,327)

Other comprehensive income

8,218(23,528)

151,884

151,884

10,676

162,561

Total comprehensive income

8,218(23,528)

151,884

119,451

23,781

143,233(6,450)(6,450)

Balance as of March 31, 2020

Total equity
attributable toowners of theparentTotal

Non-controllinginterests

Total equity

Changes of the year
Comprehensive income
Profit (loss) for the year

Transactions with owners and others
Cash dividends――

Purchases of treasury stock

―

(52)

Disposals of treasury stock―

1

Changes in ownership interests in subsidiaries

―

1,528

Transfer from other components of equity
to retained earnings
Changes in scope of consolidation
Subtotal
Balance as of March 31, 2021

(71,818)――(2,549)

(52)
1
949

2,477

(1,904)(4,454)―――(71,818)(1,072)(7,404)(8,477)

3,397(115,385)

95,3112,759,996

371,390

3,131,387

13

Nippon Steel Corporation (5401)
Fiscal 2020

(4) Consolidated Statements of Cash-Flows(Millions of Yen)
Fiscal 2019
Cash flows from operating activities :Profit (loss) before income taxes
Depreciation and amortization
Impairment losses
Finance income
Finance costs
Share of profit in investments accounted for using the equity method
Losses on reorganization(Increase) decrease in trade and other receivables
Decrease in inventories(Decrease) in trade and other payables
Other, net
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash flows provided by operating activities
Cash flows from investing activities :Purchases of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible assets
Purchases of investment securities
Proceeds from sales of investment securities
Purchases of investments in affiliates
Proceeds from sales of investments in affiliates
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Loans to associates and others
Collection of loans from associates and others
Other, net
Net cash flows used in investing activities
Cash flows from financing activities :(Decrease) in short-term borrowings, net
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Purchases of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Purchases of shares of subsidiaries that do not result in change in scope of consolidation
Other, net
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

14

Fiscal 2020

(423,572)
417,339
333,968(7,706)25,159(38,395)
121,702
157,635
13,864(152,856)
92,703539,842
7,887
61,024(21,913)(92,510)494,330(8,656)
290,863―(5,367)25,404(55,220)
98,665(26,775)
171,376(66,325)(18,192)
405,772
5,432
40,446(21,733)(26,731)
403,185(460,555)
13,283(1,793)
191,924(112,302)
12,404―(225,850)
238,418(1,155)(345,627)(459,811)
21,754(3,623)37,336(8,047)
20,521
1,482(9,868)9,252
1,968(389,035)(89,452)
46,020(211,628)
377,550(60,000)(43)(46,101)(8,045)―(22,881)(14,582)(7,838)126,283
163,176
289,459(133,514)
570,068(425,609)
80,000(45,000)(30)―(6,450)(3,631)
16,863
52,694
3,161
70,006
289,459
359,465

Nippon Steel Corporation (5401)
Fiscal 2020

（5）Notes to the Consolidated Financial Statements（Going Concern Assumption）
None（Changes in Accounting Estimates）

Effective from the beginning of fiscal 2020, the Company changed the depreciation method for property, plantand equipment from the declining-balance to the straight-line method.
The Company's domestic steelworks have been operating for about 50 years, and their workforce isexperiencing a transition to the next generation. In the midst of this trend, the Company is working to rebuild
its "strength in manufacturing" and this includes the prevention of facility troubles. The Company also strives
to rebuild a profit base that can be sustainable as a business. To achieve that, the Company takes up major
structural reforms that can be described as the “second foundation stage” by promoting manufacturing
infrastructure development including the refurbishing of core facilities. In addition, the Company isimplementing thorough preventive and planned maintenance to prevent operational and facility troubles fromtaking place and has been striving to maximize the use of current production capacity to ensure stableproduction volume and reduced cost. The Company’s future plans for facilities stipulate large-scale
investment projects such as refurbishment of coke ovens and relining of blast furnaces. The Company expects
that large-scale investment for aging facilities may increase and represent a larger portion of the total capital
investments. Accordingly, the Company considers that the straight-line method, which reflects the pattern oftime based consumption of the future economic benefits associated with the asset over the useful life, is morein line with the current actual situation of Nippon Steel compared to the declining-balance method.
With this change, compared to the previous method, depreciation expenses decreased by ¥ 67,848 million andbusiness profit, operating profit, and profit before income taxes increased by ¥ 57,779 million, respectively,
during fiscal 2020.

15

Nippon Steel Corporation (5401)
Fiscal 2020

(Segment Information)1) Summary of reportable segment
The Company engages in the Steelmaking and Steel Fabrication business and acts as the holding companyof the Group. The Group has four operating segments determined mainly based on products and services,which are Steelmaking and Steel Fabrication, Engineering and Construction, Chemicals and Materials, andSystem Solutions. Each operating segment shares the management strategy of the Group, while conducting
its business activities independently from and in parallel with other companies of the Group. The following
summary describes the operations of each reportable segment:
Reportable segments
Steelmaking and Steel
Fabrication

Principal businesses
Manufacturing and sale of steel products

Engineering andConstruction

Manufacturing and sale of industrial machinery, equipment and steel
structures, construction projects under contract, waste processing andrecycling, and supplying electricity, gas, and heat

Chemicals and Materials

Manufacturing and sale of coal-based chemical products, petrochemicals,
electronic materials, materials and components for semiconductors andelectronic parts, carbon fiber and composite products, and products thatutilize technologies for metal processing

System Solutions

Computer systems engineering and consulting services; IT-enabled
outsourcing and other services

2) Information on the amounts of revenue and profit for reportable segments
Fiscal 2019 (April 1, 2019―March 31, 2020)(Millions of Yen)
Reportable segments
Steelmaking Engineering
Chemicalsand Steelandand Materials
Fabrication Construction

SystemSolutions

Total

Adjustments

Consolidated

Revenue
Revenue from external customers

5,207,033

296,443

210,338

207,709

5,921,525―

5,921,525

Inter-segment revenue or transfers

50,31043,9605,395

65,584

165,251(165,251)

―

Total

5,257,344

340,404

215,733

273,294

6,086,777(165,251)

5,921,525

Segment profit (loss)<Business Profit>(325,341)

10,717

18,477

26,162(269,984)(14,433)(284,417)

16

Nippon Steel Corporation (5401)
Fiscal 2020

Fiscal 2020 (April 1, 2020―March 31, 2021)(Millions of Yen)
Reportable segments
Steelmaking Engineering
Chemicalsand Steelandand Materials
Fabrication Construction

Adjustments

Total

SystemSolutions

Consolidated

Revenue
Revenue from external customers

4,190,348

276,241

174,056

188,626

4,829,272―

4,829,272

Inter-segment revenue or transfers

38,101

48,226

4,622

63,849154,799(154,799)―

4,228,449

324,468

178,678

252,476

4,984,072(154,799)

4,829,272

63,522

17,708

7,631

23,948112,811(2,764)110,046

Total
Segment profit (loss)<Business Profit>(Earnings per Share)
1. Profit (loss) for the year attributable to common shares of parent(Millions of Yen)
Fiscal 2019
(April 1, 2019－March 31, 2020)

Fiscal 2020
(April 1, 2020－March 31, 2021)(431,513)(32,432)――(431,513)(32,432)

Fiscal 2019
(April 1, 2019－March 31, 2020)

Fiscal 2020
(April 1, 2020－March 31, 2021)

920,570,952 Shares

920,745,340 Shares

Profit (loss) for the year attributable to owners ofparentProfit (loss) for the year not attributable to ordinary
equity holders of the parent
Profit (loss) for the year used to calculate basic
earnings per share

2. Weighted average number of ordinary shares outstanding

Weighted average number of ordinary shares
outstanding

Diluted earnings per share is not presented as there are no potential dilutive shares.

(Significant Subsequent Events)
There are no significant subsequent events.

17