Flash Report
Consolidated Basis
Results for Fiscal 2018
(April 1, 2018―March 31, 2019)＜under IFRS＞
May 9, 2019
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 quarterly financial results meeting:Nippon Steel Corporation
Tokyo, Nagoya, Sapporo, Fukuoka stock exchanges
5401
https://www.nipponsteel.com/en/index.html
Eiji Hashimoto, Representative Director and President
Fumiaki Ohnishi, General Manager, Public Relations Center+81-3-6867-2130
June 25, 2019
June 26, 2019
June 25, 2019
Yes
Yes (for investment analysts)（Figures of less than ¥1 million have been omitted.）

1. Consolidated Operating Results, Financial Position and Cash-Flows for Fiscal 2018
(April 1, 2018―March 31, 2019)(1) Consolidated Operating Results（Percentage figures are changes from the same period of the previous fiscal year.）
Revenue

Business profit (*)%

Fiscal 2018

Millions ofyen
6,177,947

8.1

Millions ofyen
336,941

Fiscal 2017

5,712,965

21.6

288,700

69.9

288,700(8.2)

Millions ofyen
248,769

37.4

271,760%

Profitfor the year

(8.5)

Millions ofyen
257,579

21.4

39.5

212,210

37.4

%

%

Profit for the year
attributable toowners of theparentMillions of%yen
251,16938.9
180,832

31.8

Basic earnings
per share

Dilutedearnings 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

%

%

%

%

Total comprehensive
income for the year
Millions of
yen

16.7

Millions ofyen
265,111%

Profit before
income taxes

Operating profit

Fiscal 201885,114(72.7)

281.77

-

7.9

3.1

5.5

4.3

Fiscal 2017311,75920.2

204.87

-

6.0

3.6

5.1

5.1

(For reference) Share of profit in investments accounted for using the equity method : Fiscal 2018 ¥86,411 million
Fiscal 2017 ¥65,657 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 Equity in profit of unconsolidated
subsidiaries and affiliates and Other operating income. Other operating income and expenses is composed mainly of Dividend income,
Foreign exchange gains or losses, Loss 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 owners of
the parent to total assets

Total equity attributable toowners of the parent per
share

Millions of yen

Millions of yen

Millions of yen%

Yen

Fiscal 2018

8,049,528

3,607,367

3,230,788

40.1

3,509.72

Fiscal 2017

7,756,134

3,524,896

3,136,991

40.4

3,554.21(3) Consolidated Statements of Cash-Flows
Cash flows from operating
activities
Millions of yen

Cash flows frominvesting activities
Millions of yen

Cash flows fromfinancing activities
Millions of yen

Cash and cash equivalents
at end of the year
Millions of yen

Fiscal 2018452,341(381,805)(42,900)

163,176

Fiscal 2017

485,539(363,170)(104,969)

142,869

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 2017

―

30.00

―

40.00

70.00

Fiscal 2018

―

40.00

―

40.00

80.00

Fiscal 2019 (Forecasts)

―

―

―

―

―

Cash dividends

Ratio of cash dividends
to profit

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

Millions of yen%%

Fiscal 201761,87234.2

2.0

Fiscal 2018

72,236

28.4

2.3

Fiscal 2019 (Forecasts)

Notes:―The Company has not determined a dividend distribution plan for fiscal 2019 due to the inability to establish reasonable earnings forecasts.
The dividend distribution plan will be disclosed when it becomes available.

3. Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2019―March 31, 2020)
The earnings forecasts for fiscal 2019 are not presented because the outlook has not been determined due to the difficulty formulating
reasonably accurate estimates at this time. For further details, please refer to page 7,“(2) Outlook for Fiscal 2019”of“1. Summary of
Results of Operations.”* Notes(1) Changes in significant subsidiaries during the period: Yes
Number of newly consolidated: 1
Company name: Sanyo Special Steel Co., Ltd.
Number of excluded from consolidation: 0(2) Changes in accounting policies and changes in accounting estimates(a) Changes in accounting policies required by the IFRS: Yes(b) Changes other than those in (a) above: None(c) Changes in accounting estimates: None
(3) Number of shares issued (common shares)(a) Number of shares issued at the end of the period (including treasury stock)
Fiscal 2018
950,321,402 sharesFiscal 2017
950,321,402 shares(b) Number of treasury stock at the end of the period
Fiscal 2018
29,797,955 sharesFiscal 201767,710,915 shares(c) Average number of shares issued during the term
Fiscal 2018
891,387,729 sharesFiscal 2017882,629,157 shares

(For Reference) A Summary of Non-Consolidated Operating Results and Financial Position for Fiscal 2018
(April 1, 2018―March 31, 2019)(1) Non-Consolidated Operating Results（Percentage figures are changes from the same period of the previous fiscal year.）Net sales

Operating profit

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen

Fiscal 2018

3,562,226

9.0

25,114

291.9

Fiscal 2017

3,266,686

9.8

6,408

-

Earnings per share

Diluted earnings
per share

Yen

Yen

Fiscal 2018162.79-Fiscal 2017133.81-

Profit for the year%

Millions of yen%

112,3194.8

145,31922.9

107,213122.7

118,275184.7(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

5,462,897

2,072,452

37.9

2,247.72

Fiscal 2017

5,194,163

2,024,648

39.0

2,290.62(For reference) Shareholders’ equity:

Fiscal 2018 ¥ 2,072,452 million
Fiscal 2017 ¥ 2,024,648 million

Fiscal 2018

(Note) The company adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board ofJapan (“ASBJ”) Guidance No. 28, February 16, 2018) in the beginning of the fiscal year, and reclassified differed tax asset/
liability into fixed asset/ liability retrospectively. Accordingly, Ratio of shareholders’ equity to total assets for fiscal 2017 wasrecalculated.

* This flash report is exempt from the audit procedures.
* Explanation of the appropriate use of performance forecasts and other related items(Adoption of IFRS)The Company has disclosed its consolidated financial results based on International Financial Reporting Standards (IFRS) since fiscal 2018
onwards. Therefore, the financial results for fiscal 2017are reclassified based on IFRS.
For further details, please refer to page 9,“2. Basic Rationale for Selection of Accounting Standards”(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 2018

Index of Attached Documents
1. Summary of Results of Operations ..............................................................................................................................2(1) Summary of Results of Operations and Financial Position
for Fiscal Year Ended March 31, 2019 (Fiscal 2018) .............................................................................................2(2) Outlook for the Fiscal Year Ending March 31, 2020 (Fiscal 2019) .........................................................................7
2. Basic Rationale for Selection of Accounting Standards ..............................................................................................9
3. Consolidated Financial Statements and Major Notes ................................................................................................10(1) Consolidated Statements of Financial Position ......................................................................................................10(2) Consolidated Statements of Profit or Loss and Consolidated Statements of Comprehensive Income or Loss ......12(3) Consolidated Statements of Changes in Equity......................................................................................................13(4) Consolidated Statements of Cash-Flows ................................................................................................................15(5) Notes to the Consolidated Financial Statements ....................................................................................................16(Going Concern Assumption) ............................................................................................................................16(Changes in Accounting Policies Required by the IFRS) ..................................................................................16(Segment Information) .......................................................................................................................................16(Earnings per Share)...........................................................................................................................................18(Significant Subsequent Events) ........................................................................................................................18

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Nippon Steel Corporation (5401)
Fiscal 2018

1. Summary of Results of Operations(1) Summary of Results of Operations and Financial Position for Fiscal Year Ended March 31, 2019 (Fiscal 2018)
Overview of Conditions in Fiscal 2018
The global economy as a whole showed gradual growth during fiscal 2018, with ongoing economic growth in the UnitedStates and a continued stable economic trend in emerging countries in general, while China’s economy showed somesigns of a slowdown. The Japanese economy continued its modest recovery, with ongoing improvement in theemployment environment and an increase in capital investment.

Domestic demand for steel remained solid in areas such as the automotive industry, and the overall demand for steel
overseas increased. The domestic market remained strong in general on the back of solid demand and, the overseas
market as a whole also remained firm despite a temporary decline in the third quarter.

In this business environment, the Nippon Steel & Sumitomo Metal (NSSM C) Group carried out various measures thatwere devised in its 2020 Mid-Term Management Plan established in March 2018. These measures were in line with thefollowing five initiatives that were identified as activities to be tackled in the medium to long term: delivering materials
and solutions responsive to changes in society and industry; strengthening and expanding the global business; continuing
to strengthen the “manufacturing capabilities” of domestic mother mills; utilizing advanced IT in steelmaking processes;
and contributing to the achievement of a sustainable society (SDGs).

Operating Results by Business Segment in the Fiscal 2018
The NSSMC Group’s business segments strived to respond to the changing business environment and to improve sales
and earnings. An overview of operating results by business segment is shown below.

The Chemicals segment and New Materials segment were merged to form the Chemicals and Materials segment after
Nippon Steel Chemical & Material Co., Ltd. was established in October 2018 fo llowing the merger of Nippon Steel &Sumikin Chemical Co., Ltd. and Nippon Steel & Sumikin Materials Co., Ltd.
(Billions of yen)
Revenue
Steelmaking and Steel Fabrication
Engineering and Construction
Chemicals and Materials 1
System Solutions
Total
Adjustments 2
Consolidated total

Business Profit

Fiscal 2018

Fiscal 2017

Fiscal 2018

5,454.5
356.7
247.0
267.5
6,325.8(147.8)6,177.9

5,017.2
294.2
237.8
244.2
5,793.5(80.5)
5,712.9

274.6
9.4
25.0
26.5
335.8
1.1
336.9

Fiscal 2017
245.7
9.1
17.3
23.2
295.5
(6.8)
288.7

1 The numbers of Chemicals and Materials segment for Fiscal 2017 are totaled the Chemicals segment and the New Materials
segment.
2 Including the amount of adjustment for IFRS

2Nippon Steel Corporation (5401)
Fiscal 2018

Steelmaking and Steel Fabrication
The Steelmaking and Steel Fabrication segment strived to rebuild its “strength in manufacturing” and “strength in sales
and marketing” and restore its profit base, with safety as the foremost priority. In Japan, NSSMC continued to work on
building optimal production frameworks, which included Wakayama Works’ shift to advanced blast furnace and Yawata
Works’ construction of new continuous casting facilities. NSSMC also carried out ongoing initiatives to maintain andincrease the soundness of facilities through the introduction of the latest facilities and refurbishing of existing facilit ies.
Relining of a blast furnace at Hokkai Iron & Coke Corporation, which handles the Muroran Works’ up stream processes,
and of a coke oven at the Nagoya Works are among these initiatives. The decline in Japan’s working population was also
addressed with activities to secure enough workers and to ensure succession to the next generation. They included
promotion of diversity in hiring, succession of technical skills fro m a long-term perspective, personnel development
measures, labor-saving measures (use of IT and automation) to cope with the worker shortage caused by the decline in
the population, more stable production, and an increase in productivity.

Concerning overseas operations, NSSMC focused on deploying management resources in markets showing steady
growth in demand and fields where it can apply the strengths of its technology and products , seeking to contribute toself-sufficient production in the countries concerned and increasing the profitability of its own overseas businesses at thesame time. Since fiscal 2018, NSSMC has carried out and still continues proceedings for the joint acquisition of
EssarSteel India Limited, an integrated blast furnace steelmaker in India, with ArcelorMittal to secure an integrated
steelworks base in the growing Asian market. Upon completion of the acquisition, NSSMC and AcelorMittal will beable to capitalize on India’s growing steel demand in the mediu m- to long-term as a steel manufacturer with an
integrated steelworks facility in India.
Ongoing initiatives were also carried out to strengthen the group’s business structure. Nisshin Steel Co., Ltd. was made awholly-owned subsidiary in January 2019 and the NSSM C Group’s stainless steel business was restructured in April byreorganizing and integrating the stainless steel sheet business and the welded stainless steel pipe business , with the aimof further enhancing the competitiveness of these businesses. In the special steel business, Sanyo Special Steel Co., Ltd.
became a subsidiary of NSSMC in March and Ovako AB, a Swedish special steel manufacturer that became a whollyowned subsidiary of NSSM C last June, was again made into a wholly-owned subsidiary of Sanyo Special Steel. Thesechanges are intended to enhance the technological strength and cost competitiveness of our bearing steel and otherspecial steel products.

The Steelmaking and Steel Fabrication segment expanded the provision of solutions, such as in material development
and processing technology, to address increasingly diversified, advanced changes in society and industries. In addition to
the development of advanced materials, NSSMC has proposed new potentials for steel in a variety of fields . Examp les
include NSafeTM-AutoConcept, a new concept for next-generation vehicle structures that realizes a reduction in
automobile body weight and the enhancement in collision safety by combining parts structure with processing
technologies; COR-TENTM, a material with four to eight times the weather resistance of conventional steel, which was
adopted in the Second Torii Gate of Izu mo Taisha Grand Shrine; and SMart BEAM TM, a lightweight welded steel H-

3

Nippon Steel Corporation (5401)
Fiscal 2018beam that achieves a significant reduction in the weight of steel materials, adoption of which is increasingin

construction of roadside convenience stores.

Concerning the promotion of world-leading technology development, at the 65th Okochi Awards, which recognizes
outstanding achievements in fields such as production engineering, NSSMC won the Okochi Memorial Production
Award for its “development of an ultra-high-tensile material for bridge cables that will reduce impact on theenvironment.” NSSM C also received two awards at the traditional and prestigious 51st Ichimura Awards, which
recognize technical developers who have contributed to progress in science and technology and advancements inindustries. Specifically, they were the Ichimura Prize in Industry for Distinguished Achievement for the “development of
thick, high-ductility steel plates to improve safety in collisions between boats,” and the Ichimura Prize in Industry
against Global Warming for Distinguished Achievement for the “development of high-strength stainless steel for highpressure hydrogen to accelerate initiatives to achieve a hydrogen society.”

With regard to environmental initiatives, NSSM C has been contributing to the conservation of energy, the reduction of
CO2 emissions, and the building of a recycling-oriented society. In fiscal 2018 NSSM C achieved a total of three million
tons on an accumulated basis of plastic recycling using its method of converting raw chemical materials in coke ovens
that was launched in 2000. This has resulted in a reduction of around 9.6 million tons of CO2 emissions and preventionof around 12 million cubic meters of waste that would otherwise have been sent to landfills.

Furthermore, NSSMC also continued to strive to reduce raw material and fuel costs and improve production yield, fro m
the perspective of cost reduction, and to seek the understanding and cooperation of its customers in adjusting steel
product prices, given the surge in raw material prices and other factors. The Steelmaking and Steel Fabrication segment
recorded revenue of ¥5,454.5 billion and business profit of ¥274.6 billion.
Engineering and Construction
Nippon Steel & Su mikin Engineering Co., Ltd. ( renamed Nippon Steel Engineering Co., Ltd. as of April 1, 2019) builds
and operates plants in the steelworks, environmental and energy fields, and provides total engineering technology
worldwide in a variety of fields such as large-scale steel structures in buildings, ultra-high-rise buildings and pipelines.
In fiscal 2018, due to a steady stream of orders received in the domestic energy field and the continued solid businessenvironment in the domestic construction and environment-related sectors, the company achieved a high-level of orders
similar to that in fiscal 2017. Strict control of project execution led to steady progress toward project completions. As aresult, the Engineering and Construction segment recorded revenue of ¥356.7 billion and business profit of ¥9.4 billion.

Chemicals and Materials
Nippon Steel Chemical & Material Co., Ltd. was formed through a merger of two group companies in October 2018.
The company continued to perform well in both the domestic and overseas markets with its needle coke, the mainstay of
its coal tar chemicals business, due to ongoing demand for graphite electrode materials. In the chemicals business,styrene monomer prices fell briefly due to a price decrease and a weaker supply and demand balance for crude oil, but
prices are now on a recovery trend. In the functional materials business, some signs of weakness were seen in sales of4

Nippon Steel Corporation (5401)
Fiscal 2018

materials for smartphones and semiconductors, but steady sales were achieved in resists for LCDs, organic EL materials
and metal foils. The composite materials business achieved its record-high sales due to a growth in sales of carbon fiber
composite materials for the civil engineering and construction fields, primarily in the areas of repairs and reinforcements.
The Chemicals and Materials segment posted revenue of ¥247.0 billion and business profit of ¥25.0 billion.
System Solutions
NS Solutions Corporation (renamed Nippon Steel Solutions Co., Ltd. as of April 1, 2019) provides advanced solution
services and other comprehensive solutions in the planning, configuration, operation, and maintenance of IT systems forclients in a wide range of business fields. During fiscal 2018, against the backdrop of robust system investments
stemming main ly fro m customers’ advanced operational needs, the company’s business environment continued to befavorable. In addition to developing safe, protective solutions at factories and other work sites that make use of IoTtechnology and developing platforms to analyze data based on AI technology, NS Solutions proceeded proactively inmaking changings to the company’s systems following the corporate name change to Nippon Steel Corporation and thereorganization of the group. The System So lutions segment recorded revenue of ¥267.5 billion and business profit of¥26.5 billion.

Revenue and Profit
Consolidated results for fiscal 2018 were main ly affected by natural disasters such as heavy rains and typhoons , anoverall cost increase, stemming fro m a surge in prices of primary raw materials, rises in costs of commodity materials,
other material procurement costs, and distribution costs, and by the negative impact of differences in inventory
evaluations by NSSM C and its group companies . Meanwhile, in addition to corporate-wide efforts to imp lement
measures to stabilize facilities and operations and the steady execution of cost reduction measures, positive factors
included an improvement in steel product prices, driven mainly by a rise in overseas markets, especially in the first halfof fiscal 2018, and profit improvement in business segments other than Steelmaking and Steel Fabrication. As a result,
NSSM C posted revenue of ¥6,177.9 billion, business profit of ¥336.9 b illion and profit for the year attributable toowners of the parent of ¥251.1 billion.

Assets, Liabilities, Equity, and Cash Flows
Consolidated total assets as of March 31, 2019 were ¥8,049.5 billion, an increase of ¥293.3 billion as compared to as ofMarch 31, 2018. This increase was primarily due to a rise in trade and other receivables of ¥136.2 billion , the inventoriesof ¥167.2 billion and property, plant and equipment of ¥122.8 b illion mainly resulting fro m acquisition of Sanyo Special
Steel Co., Ltd. and Ovako AB, which offset a decrease in other financial assets (non-current) of ¥194.9 billion caused bya fair value decrease and sales of investment securities.

Consolidated total liabilit ies as of March 31, 2019 were ¥ 4,442.1 billion, an increase of ¥210.9 billion as compared to asof March 31, 2018. This increase was primarily due to a rise in interest -bearing liabilities of ¥211.4 billion, fro m¥2,157.7 billion as of March 31, 2018 to ¥2,369.2 billion as of March 31, 2019.

5

Nippon Steel Corporation (5401)
Fiscal 2018

Consolidated total equity as of March 31, 2019 was ¥3,607.3 b illion, an increase of ¥82.4 billion as compared to as ofMarch 31, 2018. Th is increase was primarily due to profit for the year attributable to owners of the parent of ¥251.1
billion and disposals of treasury stock of 73.3 billion, which offset a decrease in fair value of financial assets measured atfair value through other comprehensive income of ¥86.6 billion, foreign exchange differences on translation of foreign
operations of 60.5 billion and dividends of ¥70.7 billion.
As a result, total equity attributable to owners of the parent at the end of fiscal 2018 amounted to ¥3,230.7 billion, andthe ratio of interest-bearing debt to total equity attributable to owners of the parent (D/E ratio) was 0.73 times.

Cash flows from operating activities in fiscal 2018 amounted to an inflow of ¥452. 3 billion. The main factors were
inflows of ¥248.7 billion fro m profit before income taxes , depreciation and amortization of ¥408.6 billion andadjustment of ¥49.4 b illion fro m losses from reorganization, as well as outflows from an increase in inventories of¥129.4 billion and income taxes payment of ¥80.8 billion.

Cash flows from investing activities amounted to an outflow of ¥381.8 billion, as outflows from capital investments of¥438.7 billion, investments in subsidiaries and associates of 38. 4 b illion such as Sanyo Special Steel Co., Ltd. andOvako AB, and other items exceeded inflows which included proceeds of ¥87.6 billion fro m sales of investment
securities.
The result was a free cash inflow of ¥70.5 billion in fiscal 2018 (compared to an inflow of ¥122.3 billion in fiscal 2017).

Cash flows from financing activities amounted to an outflow of ¥42.9 billion (compared to an outflow of ¥104.9 billion
in fiscal 2017), largely due to the effective increase of interest-bearing debt of ¥134.7 billion after deducting the impact
of increase in interest-bearing debt of ¥76.7 billion with the effect of acquisition of Sanyo Special Steel Co., Ltd. andOvako AB. Other factors included the payment of cash dividends of ¥70.7 billion for the end of fiscal 2017 and 1st halfof fiscal 2018.

As a result of these cash flows, cash and cash equivalents at the end of the fiscal year stood at ¥163.1 billion.

6

Nippon Steel Corporation (5401)
Fiscal 2018

Basic Profit Distribution Policy and the Year-End Dividend Distribution
NSSM C’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 such factors ascapital requirements for investment and other activities aimed at raising corporate value and performance prospects,
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
of dividends from distributable funds in consideration of the consolidated operating results.”

The level of the first-half dividend is determined based on consideration of interim performance figures and forecasts forthe full fiscal year performance.

Concerning dividend distribution, in accordance with the basic profit distribution policy described above, NSSMC paid a
dividend of ¥40 per share for the end of the first half (interim). Regarding the fiscal year-end dividend, following thepreviously stated policy and as announced at the time of third quarter performance result (February 6, 2019), theCo mpany now plans to request the approval of the General Meeting of Shareholders to distribute a year-end dividend
payment of ¥40 per share (bringing the dividend for the full year to ¥80 per share and representing a consolidated payout
ratio of 28.4%).

(2) Outlook for the Fiscal Year Ending March 31, 2020 (Fiscal 2019)
Outlook for Operations in Fiscal 2019NSSM C anticipates that the overall global economy will continue to grow moderately , as the government in China has
been focusing on implementing various measures to support its economy and the United States is likely to sustain stableeconomic conditions. The Japanese economy is also expected to maintain its recovery, supported by further
improvements in the employment environments.

In Japan, demand for steel and steel market prices are forecast to remain firm. While overseas steel demand and market
conditions remain strong at present, there is a risk of economic downturn depending on the success or failure of
economic measures by the Chinese government and the direction take n regarding the US-China trade issues.
Developments will require close monitoring.

NSSMC is unable at this time to establish reasonably accurate earnings estimates for fiscal 2019. This is due to ongoing
initiatives to secure appropriate margins that enable us to sustain business, and the fact that NSSMC is under negotiation
with customers regarding possible improvement of steel product prices, in light of the impacts of increased costs,
stemming from a rise in prices of primary raw materials as well as rises in costs of commodity materials, other material
procurement, and distribution. We will disclose earnings forecasts when reasonable estimates become possible.

7

Nippon Steel Corporation (5401)
Fiscal 2018

Through the execution of the 2020 Mid-Term Management Plan, the NSSMC Group will continue to forge
manufacturing capabilit ies in its Japanese mother mills while addressing megatrends sparked by major social andindustrial changes such as rapid innovation in IT, automakers’ growing need for lighter and stronger vehicles and a shift
to electric and other new energy vehicles. NSSMC is also striving to advance towards its aim of being “the best
steelmaker with world-leading capabilities” by further improving its capabilit ies through tireless pursuit of threeelements — technological innovation, cost competitiveness, and global reach — and by “creating the value of steel”.

While NSSMC achieved a certain level of consolidated results in fiscal 2018, its non-consolidated results have stayed ata low level in the last few years, and we recognize that we need to rebuild and strengthen our profit base. With many of
its steelworks, which began operation during Japan’s postwar high economic growth period, celebrating a 50-year
milestone of their operation, and with a generation change under way in its workforce, NSSMC intends to overcome amajor structural reform, which may be described as its second foundation stage, and restore its profit base in order tosecure appropriate sales prices to secure appropriate margins that enable us to sustain business.

Specifically, in addition to the steady execution of various measures set out in the Mid-Term Management Plan, which
are aimed at rebuilding NSSMC’s “strength in manufacturing” and enhancing its “strength in market ing and sales,” wewill further enhance asset compression measures and raise the efficiency of capital investment to reinforce the plan,
while promoting drastic measures to strengthen our profit base.
In April 2019 the company name was changed to “Nippon Steel Corporation,” this signifies that while inheriting what
biologists call “hybrid vigor,” we will move forward and grow in the world market, as a global steelmaker with origins
in Japan.

Outlook for Distribution of Dividends for Fiscal 2019
Nippon Steel has not determined a dividend distribution plan for fiscal 2019 due to the inability to establis h reasonableearnings forecasts, as stated above. The dividend distribution plan will be disclosed when it becomes available.

8

Nippon Steel Corporation (5401)
Fiscal 2018

2. Basic Rationale for Selection of Accounting Standards
NSSM C has applied the International Financial Reporting Standards (IFRS) to financial statements for the fiscal year
ending March 31, 2018 onwards for purposes such as to increase corporate value through enhancement of global businessdevelopment and improve international comparability of financial information in capital markets.

The Company has set the date of transition to the IFRS as April 1, 2016 in the Registration Statement on Form F -4 (the“Form F-4”) that the Co mpany filed with the U.S. Securit ies and Exchange Co mmission (the “SEC”) on November 2,
2018. The Co mpany has started to prepare its consolidated financial statements by adopting the IFRS since theconsolidated fiscal year ending March 31, 2018.
The provisions regarding the first-time adoption, provided in IFRS 1, were adopted to the consolidated financial
statements for the consolidated fiscal year ending March 31, 2018 in Form F -4, and the reconciliations from the Japanese
GAAP to the IFRS have been prepared for the date of the transition to the IFRS, the consolidated fiscal year ending
March 31, 2017, and the consolidated fiscal year ending March 31, 2018.
For this reason, the preparation of the consolidated financial statements for this fiscal year prepared in accordance with the
IFRS do not fall under a first-time adoption. Therefore, the Company did not prepare th e reconciliations from theJapanese GAAP to the IFRS for this fiscal year, wh ich are required by IFRS 1 to be prepared upon the first-time adoptionof the IFRS.
A copy of the registration statement on Form F-4 can be reviewed and obtained on EDGAR, the SEC’s Electric Data
Gathering, Analysis, and Retrieval system.
(https://www.sec.gov/Archives/edgar/data/1140471/000119312518316702/0001193125 -18-316702-index.ht m)

9Nippon Steel Corporation (5401)
Fiscal 2018

3. Consolidated Financial Statements and Major Notes(1) Consolidated Statements of Financial Position

March 31, 2018ASSETS
Current assets :Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets(Millions of Yen)
March 31, 2019

142,869
832,040
1,399,821
19,178139,066

163,176
968,333
1,567,116
16,915
143,669

2,532,977

2,859,211

3,123,857
42,263
97,131
799,239
1,007,627
109,01034,944
9,082

3,246,669
52,803
106,131
793,146
812,668
82,24788,357
8,292

Total non-current assets

5,223,157

5,190,316

Total assets

7,756,134

8,049,528

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

10Nippon Steel Corporation (5401)
Fiscal 2018

March 31, 2018

LIABILITIES(Millions of Yen)
March 31, 2019

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

1,580,597
505,384
674
45,35028,1891,611,403
515,355
1,017
38,71934,042

Total current liabilities

2,160,194

2,200,538

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

1,652,371
6,572
173,619
95,351
143,127

1,853,876
6,501
186,755
28,253
166,235

Total non-current liabilities

2,071,043

2,241,622

Total liabilities

4,231,238

4,442,160

419,524
386,867
2,141,658(132,162)
321,101

419,524
393,9172,300,175(58,831)
176,000

3,136,991

3,230,788

387,905

376,579

Total equity

3,524,896

3,607,367

Total liabilities and equity

7,756,134

8,049,528

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

11Nippon Steel Corporation (5401)
Fiscal 2018

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

(Millions of Yen)
Fiscal 2017

Revenue
Cost of sales
Gross profit

Fiscal 2018

5,712,965(4,948,883)
764,082

6,177,947(5,391,493)
786,453

Selling, general and administrative expenses
Share of profit in investments accounted for using the equity method
Other operating income
Other operating expenses
Business profit(533,787)
65,657
91,521(98,773)
288,700(568,409)
86,411
102,606(70,120)
336,941

Losses on natural disaster
Losses from reorganization
Operating profit－－
288,700(22,349)(49,480)
265,111

Finance income
Finance costs
Profit before income taxes

7,644(24,584)
271,760

6,104(22,445)
248,769

Income tax expense
Profit for the year

(59,549)
212,210

8,809
257,579

Profit for the year attributable to :Owners of the parent
Non-controlling interests

180,832
31,377251,169
6,409

Earnings per share
Basic earnings per share (Yen)

204.87281.77

Consolidated Statements of Comprehensive Income or Loss

(Millions of Yen)
Fiscal 2017

Profit 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 items that cannot be reclassified to profit or loss

Fiscal 2018

212,210257,579

65,222(104,557)

19,422(3,531)

5,125(2,953)89,770(111,042)

1,788
10,592

1,522(41,256)(2,602)(21,687)

9,778(61,421)

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

99,548311,759(172,464)
85,114Comprehensive income for the year attributable to:
Owners of the parent
Non-controlling interests

272,150
39,60984,126988

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 items that might be reclassified to profit or loss

12

Nippon Steel Corporation (5401)
Fiscal 2018

(3) Consolidated Statements of Changes in Equity
Fiscal2017(Millions of Yen)
Equity attributable to owners of the parent

Balance at beginning of the year

CommonCapitalRetainedstock

surplusearnings

419,524

386,869

Other components of equity
Changes in fairvalue of financial
Treasury
assets measured at Remeasurements offair value throughdefined benefit
stock
other
plans
comprehensive
income(132,063)
277,939－2,000,336

Changes of the year
Comprehensive income
Profit for the year

180,832

Other comprehensive income
Total comprehensive income

－

－

－

180,832

63,963

19,581

63,963

19,581(7,201)(19,581)Transactions with owners and otherCash dividends(66,293)

Purchases of treasury stock(102)

Disposals of treasury stock

1

Changes in ownership interests in subsidiaries(3)

Transfer from other components of equity
to retained earnings

3

26,783Business combinations and others
Subtotal transactions with owners and other
Balance at end of the year

0
－

(1)

(39,510)(98)(7,201)(19,581)419,524

386,867

2,141,658(132,162)

334,701－

Equity attributable to owners of the parent
Other components of equity
Foreignexchange
Changes in fairdifferences onvalue of cashtranslation offlow hedges
foreign
operations
Balance at beginning of the year

Total

(9,253)(12,117)

256,568

Other comprehensive income

2,653

5,118

91,317

Total comprehensive income

2,653

5,118

91,317

Total equity
attributable toowners of theparentNon-controllinginterests

Total equity

2,931,234

356,072

3,287,307

180,832

31,377212,21091,317

8,231

99,548272,150

39,609311,759(66,293)(7,406)(73,700)

Changes of the year
Comprehensive income
Profit for the year

Transactions with owners and otherCash dividends
Purchases of treasury stock(102)

Disposals of treasury stock

4

Changes in ownership interests in subsidiaries

(3)

(766)

(769)

0

396

397

Transfer from other components of equity
to retained earnings
Subtotal transactions with owners and other4－(26,783)

Business combinations and others
Balance at end of the year

(102)

－

－

(26,783)(66,393)(7,776)(74,170)(6,600)(6,998)321,101

3,136,991

387,905

3,524,896

13

Nippon Steel Corporation (5401)
Fiscal 2018

Fiscal2018(Millions of Yen)
Equity attributable to owners of the parent

Balance at beginning of the year

CommonCapitalRetainedstock

surplusearnings

419,524

386,867

Other components of equity
Changes in fairvalue of financial
Treasury
assets measured at Remeasurements offair value throughdefined benefit
stock
other
plans
comprehensive
income(132,162)
334,701－

2,141,658

Changes of the year
Comprehensive income
Profit for the year

251,169

Other comprehensive income
Total comprehensive income

－

－

－

251,169(104,254)(4,369)(104,254)(4,369)17,573

4,369

Transactions with owners and otherCash dividends(70,710)Purchases of treasury stock(82)

Disposals of treasury stock(1,427)

Changes in ownership interests in subsidiaries

8,477

Transfer from other components of equity
to retained earnings

73,656(21,942)

Business combinations and others
Subtotal transactions with owners and other
Balance at end of the year

(242)
－

7,050

(92,652)

73,331

17,573

4,369

419,524

393,9172,300,175(58,831)

248,020－

Equity attributable to owners of the parent
Other components of equity
Foreignexchange
Changes in fairdifferences onvalue of cashtranslation offlow hedges
foreign
operations
Balance at beginning of the year

Total

Total equity
attributable toowners of theparentNon-controllinginterests

387,905

Total equity(6,600)(6,998)321,101

3,136,991

3,524,896

251,169

6,409

257,579

Other comprehensive income

2,166(60,586)(167,043)(167,043)(5,420)(172,464)

Total comprehensive income

2,166(60,586)(167,043)

84,126988

85,114(70,710)(7,604)(78,315)

Changes of the year
Comprehensive income
Profit for the year

Transactions with owners and otherCash dividends
Purchases of treasury stock

(82)

(82)

Disposals of treasury stock

72,22872,228Changes in ownership interests in subsidiaries

8,477(94,092)(85,614)(242)

89,38389,140Transfer from other components of equity
to retained earnings
Subtotal transactions with owners and other
Balance at end of the year－

21,942Business combinations and others－－

21,942

9,670(12,314)(2,643)(4,433)(67,585)

176,000

3,230,788

376,579

3,607,367

14

Nippon Steel Corporation (5401)
Fiscal 2018

(4) Consolidated Statements of Cash-Flows
Millions of yen
Fiscal 2018

Fiscal 2017
Cash flows from operating activities :Profit before income taxes
Depreciation and amortization
Finance income
Finance costs
Share of profit in investments accounted for using the equity method
Gains on sales of property, plant and equipment and intangible assets
Losses from reorganization(Increase) decrease in trade and other receivables(Increase) in inventories
Increase 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 sale of property, plant and equipment and intangible assets
Purchases of investment securities
Proceeds from sales of investment securities
Purchases of investments in associates
Proceeds from sale of investments in associates
Purchases of shares of subsidiaries resulting in change in scope of consolidation
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 :Increase 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
Payments from changes in ownership interests in subsidiaries that do not result inchange 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 year15271,760
366,565(7,644)
24,584(65,657)(9,312)931(165,166)
92,326
18,674
527,062
5,644
45,775(26,506)(66,435)
485,539

248,769
408,616(6,104)22,445(86,411)(5,801)49,480(114,662)(129,483)
81,05821,640489,547
5,796
57,088(19,278)(80,811)452,341(411,926)
13,908(3,169)39,936(4,940)
9,522
289
473
(6,688)2,878(3,455)(363,170)(438,758)
12,841(8,362)
87,693(2,787)
5,348(35,658)
3,575(11,870)
3,948
2,223
(381,805)

50,026
247,507(257,212)
40,000(140,000)(96)(66,293)(7,406)

67,401
285,857(192,799)
60,000(85,700)(55)(70,710)(7,604)(740)(4,874)29,245(104,969)
1,540
18,940123,929
142,869(94,415)(42,900)(7,328)20,306
142,869
163,176

Nippon Steel Corporation (5401)
Fiscal 2018(5) Notes to the Consolidated Financial Statements(Going Concern Assumption)
None(Changes in Accounting Policies Required by the IFRS)The Company has adopted IFRS 15 “Revenue from Contracts with Customers” from the fiscal year
ended March 31, 2019.
In applying IFRS 15, the Company elected to apply the cumulative effect transition method where
the cumulative effect of applying the standard is recognized at the date of initial application. The
Company expects that the adoption of the standard had no significant effect on each amountrecognized in the consolidated financial statements.

(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 product and service,
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 segment

Principal businesses

Steelmaking and steel
fabrication

Manufacturing and marketing of steel products

Engineering andconstruction

Manufacturing and marketing of industrial machinery and equipment as well as
steel structures, performance of construction work under contract, waste
processing and recycling, and supplying electricity, gas, and heat

Chemicals andMaterials

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

System solutions

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

16

Nippon Steel Corporation (5401)
Fiscal 2018

2) Information on the amounts of revenue and profit for reportable segments
Fiscal 2017 (April 1, 2017―March 31, 2018)(Millions of Yen)
Reportable segment
IFRS
Steelmaking Engineering
Chemicals
and steelandand Materials
fabrication construction

Systemsolutions

Subtotal

Adjustments

Total

Consolidated
Adjustment

Revenue
Revenue fromexternal customers

4,983,335

260,908

234,108

190,310

5,668,663-

5,668,663

44,302

5,712,965

Inter-segment
revenue or transfers

33,91033,3603,709

53,889124,868(124,868)---

5,017,245

294,268

237,817244,200

5,793,531(124,868)

5,668,663

44,302

5,712,965

245,708

9,110

17,39923,292295,5102,030

297,541(8,840)288,700

Total
Segment profit<Business Profit>** Segment profit for each reportable segment is measured using ordinary profit under Japanese GAAP, which isadjusted to Business Profit on IFRS-based consolidated statement of profit or loss.
Fiscal 2018 (April 1, 2018―March 31, 2019)(Millions of Yen)
Reportable segment
Steelmaking Engineeringand steelandfabrication construction

Chemicals andMaterials

Systemsolutions

Total

Adjustments

Consolidated

Revenue
Revenue from external customers

5,408,633

321,346

243,014204,952

6,177,947-

6,177,947

Inter-segment revenue or transfers

45,90235,3604,052

62,550147,867(147,867)-

5,454,536

356,707247,067

267,503

6,325,814(147,867)

6,177,947

274,672

9,474

25,095

26,576

335,818

1,122

336,941

Total
Segment profit<Business Profit>

17

Nippon Steel Corporation (5401)
Fiscal 2018

(Earnings per Share)
1. Profit for the year attributable to common shares of parent(Millions of Yen)
Fiscal 2017
(April 1, 2017－March 31, 2018)

Fiscal 2018
(April 1, 2018－March 31, 2019)180,832

251,169--

180,832

251,169

Fiscal 2017
(April 1, 2017－March 31, 2018)

Fiscal 2018
(April 1, 2018－March 31, 2019)882,629,157 Shares

891,387,729 Shares

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

2. Average number of outstanding common shares during the period

Average number of outstanding common shares during
the period

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

(Significant Subsequent Events)
None18