March 5, 2021
Company name: Nippon Steel Corporation
Name of representative: Eiji Hashimoto, Representative Director and President
Code number: 5401 TSE 1st Section, NSE, FSE, and SSE
Contact: Shinnosuke ARITA, General Manager, Public Relations Center
Telephone: +81-3-6867-2135, 2146, 2977, 3419

Nippon Steel Corporation Announces Medium- to Long-term Management Plan

Nippon Steel Corporation announced the subject of the title.
Please refer to the next page for details.

March 5, 2021
Nippon Steel Corporation

Nippon Steel Corporation Announces Medium- to Long-term Management Plan
With the aim 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, Nippon SteelCorporation has developed its new medium- to long-term management plan.
I. Planning Policies
Steel demand in Japan is expected to decrease due to its declining population, the expansion of overseas
local production by Japanese customers, and other reasons. Global steel demand is expected to continue
to grow steadily, particularly in Asia, and notably including India.
In Japan where demand is shrinking, we have maintained our domestic production capacity by raising
our export ratio. However, it is now necessary to assume that the current business model will be difficult
to sustain because competition in the overseas market is expected to intensify, mainly as demand in
China, which represents 60% of the world’s steel production, seems to have already peaked, while weare entering a period which will require our main steelworks to provide large-scale investments forrenewal of their aging facilities.
In order to appropriately respond to these circumstances, in the domestic steel business we willthoroughly promote the strengthening of operations, notably by concentrated production throughselection of products and facilities, thereby building a strong framework enabling us to manufacture
products of the highest grade, in the form of mother mills which play a key role in our global steelmaking
strategy. In the overseas steel business, we will expand our integrated production framework in the centerof demand, such as by capacity expansion of AM/NS India, and ensure that local demand is captured in
growing markets. By implementing these strategies, our plan is to achieve 100 million tons of global crude
steel capacity per annum for the Nippon Steel Group (the “Group”) by combining the efforts of our mothermills in Japan and local mills located overseas.
In addition, we will continue to respond to climate change. In exerting our efforts toward a decarbonizedsociety, we are taking on the bold challenge of developing and industrializing new CO2 reduction
technologies, in cooperation with various measures taken by the Japanese government, and aim toachieve carbon neutrality by 2050 in order to win competitions on the development of new CO2 reduction
technologies with Europe, the United States and China and to continue to lead the world's steel industry.
We will also contribute to the realization of carbon neutrality in Japan by utilizing our technological and1© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

product capabilities through development of and supply capacity increase of our high-performance
products, such as ultra-high-tensile steel sheets for vehicle weight reduction, and high-performanceelectrical steel sheets for drive motors used in electric vehicles.
Moreover, we will push hard for digital transformation. We aim to become a digitally advanced company
in the steel industry, and we will work on production and business process innovations and promotemeasures that contribute to the fundamental strengthening of decision-making and problem-solving
capabilities through full use of digital transformation technologies and data.

II. Four Pillars of the Medium- to Long-term Management Plan
Our medium- to long-term management plan has been developed with the following four pillars based on
our policies described above:
1. Rebuilding our domestic steel business and strengthening our group’s management
2. Promoting a global strategy to deepen and expand our overseas business3. Taking on the challenge of zero-carbon steel
4. Promoting digital transformation strategies
Measures for all four pillars will be implemented according to our roadmap, and based on our long-term
outlook. Particularly, with regard to pillar 1 (Rebuilding our domestic steel business and strengthening ourgroup’s management), our plan is to complete the relevant measures by the end of fiscal 2025 in orderto establish an efficient and strong production framework at an early stage, and to rebuild the earnings
base of our domestic mother mills.
III. Major Features of Specific Measures
1. Rebuilding our domestic steel business and strengthening our group’s management(1) Rebuilding our domestic steel business and early recovery of profitability
The Group’s basic policies are “to realize a higher-level order mix through aggressive investment instrategic products,” “to renew and improve facilities to ensure technological strength leading to profit
generation,” and “to make the production framework streamlined and more efficient by selective
concentration on certain products and facilities.” Based on these overall basic policies, we will strive tobuild an optimal production framework for our domestic steel business, strengthen our earnings base by
re-establishing cost competitiveness, which will overwhelm our competitors, and secure appropriate
margins.

2© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

For the purpose of building an optimal production framework, we will implement the following specificmeasures:[Measures to streamline the production framework in manufacturing processes]

1)

Plate businessTo strengthen our steel plate business, in addition to the already-announced shutdown of the steel
plate mill at the Nagoya Works, the steel plate mill in the East Nippon Works Kashima Area will be shut
down, and its production will be transferred to the steel plate mills in the East Nippon Works Kimitsu
Area and the Kyushu Works Oita Area.
[Relevant steelworks][Relevant facility]

Steel
plate

[Time of shutdown]
By around theEast Nippon Works Kashima

Steel plate millAreasecond half offiscal 2024

[Measure announced on February 7, 2020]
Steel
plate

Steel plate mill

Nagoya Works

By around the endof fiscal 2021

Steel plate mills: [Before implementation of the measures] 4 mills→ [After implementation of the measures] 2 mills

2)

Construction products businessTo strengthen our construction products business, the shape mills in the Kimitsu Area and Kashima
Area of the East Nippon Works will be shut down, and their production will be transferred to the shapemills in the Kansai Works Wakayama Area (Sakai) and the Kyushu Works Yawata Area.
In addition, in the East Nippon Works Kimitsu Area, the continuous casting machine, which
manufactures large-shaped steel pieces, will be shut down along with the shutdown of the shape mill.

[Relevant steelworks]

Construction

East Nippon Works Kimitsu

products

Area[Relevant facility]
Shape mill
No.1 continuous castingmachineEast Nippon Works Kashima
Area

3

Shape mill[Time ofshutdown]
By around the endof fiscal 2021
By around the endof fiscal 2024

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Shape mills: [Before implementation of the measures] 4 mills→ [After implementation of the measures] 2 mills

3)

Pipe & tube businessA) Seamless steel pipe businessIn the Kansai Works Wakayama Area (Kainan), of the two mills, East and West, the West smalldiameter seamless pipe mill will be shut down in order to optimize and improve the efficiency of the
production framework.
B) Large-diameter pipe businessWe have decided to withdraw from the UO steel pipe business as we consider that there are noprospects for securing stable profit, taking into account the medium- to long-term demand outlook. As
a result, the UO pipe mill in the East Nippon Works Kimitsu Area will be shut down.
[Relevant steelworks][Relevant facility][Time of shutdown]

Kansai Works Wakayama

Small-diameter seamless

By around the end ofArea(Kainan)

pipe mill (West)fiscal 2025

Pipe & Tube

East Nippon Works Kimitsu

UO pipe millArea

By around the end of
fiscal 2021

Seamless pipe mills: [Before implementation of the measures] 3 mills→ [After implementation of the measures] 2 mills
UO pipe mill: [Before implementation of the measures] 1 mill
→ [After implementation of the measures] None
4) Flat products businessAlong with concentrating orders into competitive production lines, the measures below will be taken inorder to become more oriented toward production close to centers of demand, in addition to thealready-announced shutdown of the hot strip mill and the pickling line in the Setouchi Works Kure Area.
Some of the facilities of the hot-dip galvanizing line in the East Nippon Works Kimitsu Area and the
pickling line in the Kashima Area of the same works will be shut down, and their production will betransferred to other lines in Kimitsu, Nagoya, and elsewhere.

4© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

[Relevant steelworks]
East Nippon Works
Flat

Kimitsu Area

[Relevant facility][Time of shutdown]
By around the end of

No. 1 hot-dip galvanizing line

fiscal 2024

products

By around the end of

East Nippon Works

No. 1 pickling line

Kashima Area

the first half of fiscal
2022

Some of the hot-dip galvanizing lines in the Setouchi Works Hanshin Area (Sakai) will be shut down,
and their production will be transferred to other production lines in Sakai and the Kyushu Works Yawata
Area.

[Relevant steelworks][Time of shutdown]

No. 1 hot-dip galvanizing lineFlat
products[Relevant facility]

Setouchi Works Hanshin
Area (Sakai)

By around the end of
fiscal 2024

No. 1 hot-dip galvanizing and

By around the end ofaluminizing line

fiscal 2022

All facilities in the Setouchi Works Hanshin Area (Osaka) will be shut down and all of the flat steel sheetlines in the Kansai Works Wakayama Area will be shut down. Their production of high-carbon products
will be transferred to the Setouchi Works Hanshin Area (Sakai). High-carbon products will be
manufactured at two bases, the Setouchi Works Hanshin Area (Sakai) and Kyushu Works Yawata Area

Setouchi Works Hanshin

All lines

By around the end of the first half of

Flat

Area (Osaka)

fiscal 2023 to the end of fiscal 2023

products

Kansai Works

All of flat steel

By around the end of the first half ofWakayama Area

sheet lines

fiscal 2024

[Measure announced on February 7, 2020]
Flat

Setouchi Works Kure

Hot strip mill andBy around the end of the first half ofproducts

Area

pickling line

fiscal 2023

Hot strip mills: [Before implementation of the measures] 7 mills→ [After implementation of the measures] 6 mills
Cold-rolling mills: [Before implementation of the measures] 17 mills→ [After implementation of the measures] 15 mills
Galvanizing lines: [Before implementation of the measures] 19 lines→ [After implementation of the measures] 16 lines

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5) Titanium and special stainless steel1 business
1: Ultra-thin stainless steel sheet (around 0.2 mm in thickness) used in the precision processing field of automotive parts,
electronic devices, etc.)

To improve the efficiency of the production framework, some manufacturing facilities of special stainlesssteel sheet products will be shut down at the East Nippon Works Naoetsu Area and their production
will be transferred to the Yamaguchi Works (Shunan Area) of Nippon Steel Stainless Steel Co., Ltd.
Moreover, in addition to the already-announced shutdowns of the titanium round bar manufacturing
special facility in the Kansai Works Osaka Area and the titanium welded pipe manufacturing line in the
Kyushu Works Oita Area (Hikari Pipe & Tube), the titanium raw material plant in the Kansai Works
Osaka Area will be shut down.

Specialstainlesssteel[Time of

[Relevant steelworks][Relevant facility]

East Nippon Works Naoetsu

Cold-rolling mill, annealing

By around the end

Area

and finishing lines, etc.

of fiscal 2021

shutdown]

By around the end
Titanium

Kansai Works Osaka Area

Titanium raw material plantof the first half offiscal 2022

[Measures announced on February 7, 2020]
Kansai Works Osaka Area

Titanium round bar

By around the end

manufacturing special facilityof fiscal 2022

Titanium
Kyushu Works Oita Area

Titanium welded pipe

(Hikari Pipe & Tube)

manufacturing line

By around the endof the first half offiscal 2021

Special stainless steel cold-rolling mills: [Before implementation of the measures] 4 mills→[After implementation of the measures] 2mills
Titanium raw material plant: [Before implementation of the measures] 1 plant
Titanium round bar manufacturing special facility: [Before implementation of the measures] 1 line
Titanium welded pipe manufacturing line: [Before implementation of the measures] 1 line→[After implementation of the measures] All shut down

6

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6) Nippon Steel Stainless Steel Corporation
To increase the efficiency of the production framework, the cold-rolling mill and the annealing line of
Nippon Steel Stainless Steel’s Kinuura Works will be shut down and the production will be transferred
to its Yamaguchi Works. This will result in the shutdown of all production facilities of the Kinuura Works,
including the shutdown of its hot strip mill which was announced in 2020.
The electric furnace in the Yamaguchi Works and some of the cold-rolling and annealing facilities at
the Yamaguchi Works and the Kashima Works will also be shut down.

[Relevant[Relevant facility]

steelworks][Time of shutdown]

All lines (the coldKinuura Works

By around the end ofrolling mill and all

fiscal 2021

other lines thereafter)
A part of the coldStainless

Nippon SteelStainless

From the end of Marchrolling and annealing 2021 to the end of June
Yamaguchi

facilities

2026

Works
1 electric furnace

Kashima Works

By around the end of
fiscal 2023

A part of annealing

By around the end offacilities

June 2021

Stainless cold-rolling mills: [Before implementation of the measures] 13 mills→ [After implementation of the measures] 9 mills
Electric furnaces: [Before implementation of the measures] 4 units→ [After implementation of the measures] 3 units[Measures to streamline upstream facilities]
The following measures will be implemented in addition to the already-announced shutdown of all
upstream facilities (2 blast furnaces, sintering, and steelmaking) in the Setouchi Works Kure Area andupstream facilities (1 blast furnace and related facilities) in the Kansai Works Wakayama Area.
1)

Strengthening the upstream facilities in the East Nippon Works

Taking into consideration the upstream facility balance after the shutdown of the steel plate mill and shape7© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

mill in the East Nippon Works Kashima Area, as well as the area’s integrated production and shipping
capacity, costs, and other factors, the No. 3 blast furnace and related facilities will be shut down.
In the East Nippon Works Kimitsu Area, the continuous casting machine that manufactures large-shaped
steel pieces will also be shut down along with the shutdown of its shape mill (mentioned above).

[Relevant steelworks][Relevant facility][Time ofshutdown]

One series of upstream
facilities (No. 3 blast furnace,
Upstream

East Nippon Works Kashima

facilities

Area

No. 2-ABCD coke ovens, No. 3
sintering machine, and No. 1
steelmaking plant (1 basic

By around the endof fiscal 2024

oxygen furnace, 2 continuous
casting machines, etc.))
East Nippon Works Kimitsu

No.1 continuous casting

By around the end

Areamachine (mentioned above)of fiscal 2021

[Measures announced on February 7, 2020]
All facilities (incl. No.1 and
By around the end

No.2 sintering machines, andof the first half ofNo.1 and No.2 steelmaking

fiscal 2021

Setouchi Works Kure Area

No.2 blast furnaces, No.1 andplants)
By around the endof the first half of

Upstream
No. 1 blast furnace, No. 5 cokefacilities

oven, and No. 5-1 sinteringmachineKansai Works Wakayama Area

fiscal 2021 (moved
ahead from aroundthe end of the firsthalf of fiscal 2022,
as announced on
Feb. 7, 2020)8

No. 4 coke oven and No. 3

By around the first

casting machine - 1 strand

half of 2022

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Blast furnaces: [Before implementation of the measures] 15 units*→ [After implementation of the measures] 10 units
Continuous casting machines: [Before implementation of the measures] 32 units*→ [After implementation of the measures] 24 units* One blast furnace and one continuous casting machine in the Kyushu Works Yawata Area
(Kokura) were shut down in fiscal 2020.
After implementing the above measures, the annual domestic crude steel production capacity (simple
sum of Nippon Steel and Nippon Steel Stainless Steel) will be reduced by approximately 10 million tons
(from 50 million tons to 40 million tons).
2)

Change in the supply arrangement of steel billets to the East Nippon Works Kamaishi Area andpartial steelworks reorganization.

The main supply base of steel billets for wire rods for the East Nippon Works Kamaishi Area is the
Kimitsu Area of the same works; however, to improve the efficiency of the upstream facility for the entire
bar and wire rod business, the main supply base will be changed to the Muroran Works by 2025.
In line with this change, the structure of our steelworks will be reorganized by April 2022 as follows.
[Now][After reorganization]

Muroran Works

North Nippon Works Muroran Area

East Nippon Works Kamaishi Area

North Nippon Works Kamaishi Area

[Partial advance in schedule of previously announced measures]
Based on the immediate trends in supply and demand and other factors, and in order to improve theefficiency of the production framework at an earlier stage, among the upstream facilities of the Kansai
Works Wakayama Area which were previously announced, the shutdown of the No. 1 blast furnace, No.
5 coke ovens, and No. 5-1 sintering machine will be moved up one year ahead of the original schedule(from around the end of the first half of fiscal 2022, as announced on Feb. 7, 2020 to around the end of
the first half of fiscal 2021.). The shutdown schedule for the No. 4 coke oven and No. 3 casting machine- 1 strand remains unchanged and will continue until around the first half of fiscal 2022, as announced on
Feb. 7, 2020.

[Investment in strategic products: renewal and improvement of facilities, and higher-level order mix]
1) Strategic investment in a hot strip mill at the Nagoya Works
As global environmental regulations and collision safety standards continue to become stricter in theautomotive industry, demand for high-performance materials is expected to increase further in

9© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

response to the need for more lightweight and stronger automotive bodies. With regard to electricvehicles such as electric cars which are expected to become widespread, the need for the reduction ofvehicle weight and an increase in body strength is expected to increase due to issues related to mileage
and battery weight.
In response to these needs, we intend to dramatically strengthen production capability of ultra-hightensile strength steel sheets2 at the Nagoya Works, which is our center for the manufacture ofautomobile steel sheets. We have therefore decided to make a strategic investment in building a nextgeneration hot strip mill. After the next-generation hot strip mill is launched, the existing hot strip mill
will be shut down. We will carry out detailed studies to enable rapid implementation.
2: Ultra-high-tensile strength steel sheets have a tensile strength of more than 1.0 GPa.

2) Strengthening production framework of high-grade electrical steel sheets
Regulations on electric transformer efficiency have been strengthened in a number of countries as apart of decarbonization initiatives taken at a high pace around the world. As such, the need for highgrade materials with low energy loss is expected to increase, for products including grain-oriented (GO)electrical steel sheets used in electric transformer iron hearts. In addition, in the field of non-oriented(NO) electrical steel sheets used for steel motors, demand for high-efficiency and high-grade materials
is expected to grow dramatically, as demand for electric vehicles is expected to accelerate due tostricter regulation of CO2 emissions and fuel consumption of automobiles.
By November 2020, we decided to adopt measures to improve the capacity and quality of electricalsteel sheets in the Setouchi Works Hirohata Area and the Kyushu Works Yawata Area. We are currently
working on measures to realize this by the first half of fiscal 2023. In addition, we have decided toswiftly respond to market demand for these sheets by improving the production capacity in the Setouchi
Works Hirohata Area. We will carry out detailed studies to enable rapid implementation.
Through the above various measures, the DX measures described below and other measures, we will
reduce the number of necessary personnel by a total of more than 20% in us and our business partners(on-site contractors) for the period from fiscal 2021 to the end of fiscal 2025.
In order to build an optimal production framework, we will continue to examine and analyze demand
trends and other factors in a timely and accurate manner, and continue to develop necessary
measures.
(2) Strengthening our group management
In order to improve our consolidated business profitability and maximize our corporate value, we will striveto 1) strengthen the competitiveness and profitability of each group company; 2) optimize the group10© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

structure through concentration on core business operation; and 3) deepen group collaboration andimprove and strengthen the management base, among others.
With respect to group companies in the steel business, we will strengthen each company’s profitability
integrated with Nippon Steel’s relevant product business units and other parts of the business, whileclarifying the mission of each company, and continue to advance concentration on core business
operations of our group companies, by taking into account sustainability and other factors.
With regard to the three non-steel group companies, Nippon Steel Engineering Co., Ltd. and Nippon Steel
Chemical & Material Co., Ltd. will implement measures to precisely coordinate the various issues related
to the steel business, and endeavor to increase their profits based on their own “concentration on corebusiness operations. “Nippon Steel Solutions Co., Ltd. will make a significant contribution to thedevelopment of our digital transformation strategy for the entire group based on the technology andexperience it has accumulated, and will continue to grow its business notably by ensuring growing market
needs are captured.

2. Promoting our global strategy to deepen and expand our overseas business
Global steel consumption is expected to continue to grow at a moderate pace toward 2025, furthermore,
2030. We have developed our business mainly in Asia (especially China, the ASEAN countries and India),
whose market size and growth rate is relatively large globally, and we are well positioned to profit fromthe scale and growth of this market.
In order to further improve our profitability in this environment, we will move away from our traditional
business of exporting steel products, mainly high-grade steel, and supplying by overseas companies incharge of producing predominantly cold-rolled and plating products, and will move toward a full-scale
overseas business that enables local demand to be captured in it’s entirety and provides added value toour products.
The Group aims to achieve 100 million tons of global crude steel capacity per annum3, which is our vision,by capturing demand in growth markets through the sale of products from our strong domestic mothermills and local mills overseas, and we will promote measures to expand the capacity of AM/NS India andconsider acquisition of, and equity participation (brownfield investment) in integrated steel mills in China,
ASEAN countries and others.
With regard to existing overseas businesses, we have concentrated operations, and narrowed our focus
to certain businesses, as we have almost completed the reorganization of our overseas tinplate businessand our withdrawal from VSB４ and other businesses which would not be economically viable for us tocontinue. Going forward, we will aim to increase profits by strengthening the business bases of AM/NS
India and OVAKO, which are large-scale acquisitions, and in the case of each overseas business11© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

company, by taking advantage of our advanced technology and capturing the growth of the markets as acompany in each country.
3: Simple sum of crude steel production at full capacity of i) companies in which we have 30% or more equity interests(including USIMINAS) among companies subject to World Steel Association’s crude steel production statistics; and ii)
our equity method affiliates with less than 30% equity interests to which we provide semi-finished products.
4: Vallourec Soluçoes Tubulares do Brasil S.A. (VSB) is an integrated joint venture of seamless steel pipes and tubes.
Nippon Steel has decided to sell its equity stake to Vallourec, a JV partner, by around the end of March 2021.

3. Taking on the challenge of zero-carbon steel
As a part of our widespread efforts toward achieving a decarbonized society, by adopting “Nippon SteelCarbon Neutral Vision 2050 – A Challenge of Zero-Carbon Steel” as our own new initiative, we willconsider and implement various measures as a top priority management issue in order to win
development competitions with our competitors in Europe, the United States, China and South Korea andto continue to lead the world's steel industry.
By 2030, our plan is to achieve reduction of CO2 emissions by 30% compared to 2013 through thepractical implementation of COURSE505 into the current blast furnace and basic oxygen furnace
processes, reduction of CO2 emissions in existing processes, and establishment of an efficient production
framework.
Toward 2050, we will take on the challenge of adopting ultra-innovative technologies such as mass
production of high-grade steel in electric furnaces, drastic reduction of CO2 emissions through SuperCOURSE506 and other developments in hydrogen reduction methods, and production of direct reductioniron using hydrogen, and we will aim to achieve carbon neutrality by taking a multi-aspect approach,including measures to offset carbon through CCUS7 and other methods.
In particular, the 100% hydrogen direct reduction method of steelmaking, which is the ultimate zerocarbon steelmaking technology, is an unprecedented technology that is not yet proven and possesses
extremely high innovation hurdles. In addition, the mass production of high-grade steel by electric
furnaces requires the development and use of extremely complex technology, an increase in size andefficiency, and the establishment of technology for eliminating harmful elements from hazardous materials.
Realization of the blast furnace hydrogen reduction method will also require the establishment oftechnology related to hydrogen heating and blowing of endothermic reactions during hydrogen reduction.
These innovations will require R&D expenses of approximately ¥500 billion and ¥4 to 5 trillion in
investments in facilities. Moreover, it is possible that the production cost of crude steel even in the bestcase scenario as of 2050, which factors in potential external conditions, will be more than double that ofcurrent costs.

12© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

The above mentioned zero-carbon steel cannot be achieved by the steel industry alone. The list ofpremises for realization includes. 1) long-term and continuous government support for research anddevelopment of non-continuous innovation and equipment implementation. 2) establishment of
inexpensive and stable large-scale hydrogen supply infrastructure. 3) realization of carbon free power at
an internationally competitive cost. 4) promotion of national projects for the development andcommercialization of economically viable CCUS; 5) securing equal-footing in international competition;and 6) establishment of a system that enormous costs will be borne by society as a whole.
In addition to promoting fundamental technological innovations in the steelmaking process, Nippon Steelwill contribute to the realization of carbon neutrality with our products contributing to CO2 emission
reduction, through development and supply capacity increase of high-performance products such as
ultra-high-tensile strength steel sheets for body weight reduction and high-performance electric steel
sheets for drive motors which are used in electric vehicles, by building the next-generation hot strip millat the Nagoya Works and the strengthening of the production framework for electric steel sheets.
5:

COURSE50 is a project to develop technology to partially use hydrogen in the blast furnace reduction of iron ore,instead of coking coal.
6:

Super-COURSE50 is a subsequent project to develop technology to raise the hydrogen reduction ratio in theblast furnace steelmaking method.
7:

Carbon dioxide capture, utilization and storage (CCUS) is a technology which separates and recovers CO2 ingases, utilizes it in the form of chemicals and fuels, or stores it underground.

4. Promoting digital transformation strategies
Over the next five years, we will invest ¥100 billion or more into our digital transformation strategy, withthe aim of becoming a digitally advanced company in the steel industry. Specifically, we will strengthen
our business competitiveness by making full use of data and digital technologies and implementing thefollowing production and business process innovations.
First, we will realize smart manufacturing by utilizing advanced digital technologies such as AI and theInternet of Things (IoT) in order to advance the innovative evolution of our “strength in manufacturing.” Through this initiative, we will expand the formalization and standardization of our technology, including
our implicit knowledge of know-how, improve labor productivity through automation and predictive
detection, and achieve production stability and further improvements to quality through the advancementof manufacturing technology. In addition, we will establish a foundation for remote operations
management that will ensure the same level of operation and quality at our overseas facilities as that inJapan.
Second, as a measure to improve customer responsiveness, we will build an integrated production

13© 2021 NIPPON STEEL CORPORATION All Rights Reserved.

planning platform from order to production to delivery, thereby strengthening our flexible and optimal
supply framework. In addition, we will develop a linkage relationship with supply chain information andother information, and work to create new value which we intend to pass on to our customers.
Third, as a measure to enhance our global management base, we will build an integrated data platformthat provides real-time visibility of various management information and KPIs, enabling rapid
improvement action, and strengthening business intelligence (a data-based management support
system). This will accelerate our decision-making from the management level to the front line and improve
problem solving.

IV. Investment Plan and Financial Targets(1) Aggressive growth investment plan in management resources (fiscal 2021-2025)
Through the implementation of the measures outlined above, we will aim to achieve the following targets
in fiscal 2025:


We will implement capital expenditures of ¥2,400 billion over the next five years, as we will invest in
rebuilding our strong domestic production framework, and contribute to measures for strategic
products.



We will make investments in business of ¥600 billion over the next five years, in preparation for thesteady promotion of AM/NS India capacity expansion measures and acquisition of, and equity
participation (brownfield investment) in integrated steel mills in countries, such as China and ASEAN
countries.

(2) Financial targets and shareholder return (fiscal 2025)
We will aim to achieve the following financial targets in fiscal 2025 in order to be prepared for a worsening
business environment, such as a decline in domestic steel demand and intensified competition in theoverseas markets, and ensure sufficient financial strength (an international credit rating of “A”) andrecover our corporate value in anticipation of, among other things, full-scale investments in facilities
related to zero-carbon steel, which is expected to kick off in or after fiscal 2025

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Fiscal 2025 Plan

2H Fiscal 2020 Forecasts

Targets
ROS (Return on

About 10%

5.2%

About 10%

About 6%

D/E Ratio8

0.7 or less

About 0.7

Payout Ratio

Around 30%

Year-end dividend of ¥10/share (plan)

Sales)ROE (Return on
Equity)8: After recognizing equity credit attributes of the subordinated loans

The Group plans, by steadily promoting this management plan, to achieve 100 million tons of global crude
steel capacity per annum through the combined efforts of its strong mother mills in Japan and local mills
overseas, and to achieve business growth and reduce our impact on the environment, by taking on thechallenge of the “Nippon Steel Carbon Neutral Vision 2050 – A Challenge of Zero-Carbon Steel.”
Through digital transformation, which will contribute to the strengthening of our decision-making andproblem solving capabilities, and diversity and inclusion initiatives, we will strive to become a company
with diverse employees who are empowered and willingly work with pride.
The Group will always endeavor to pursue the world’s best technology and strength in manufacturing
and contribute to the development of society by providing world class products and services. Based on
this basic policy, and through the implementation of the management plan, we will continually grow to“become the best steelmaker with world-leading capabilities” that contributes to Japan’s industrial
competitiveness from the present and into the future.
End
For inquiries
Public Relations Center

Tel.: +81-3-6867-2135, 2146, 2977, 3419

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accuracy or completeness of the information contained herein.

No warranty is given as to theInvestors and prospective investors in securities of any

issuer mentioned herein are required to make their own independent investigation and appraisal of the business andfinancial condition of such company and the nature of the securities.

Any decision to purchase securities in the context

of a proposed offering, if any, should be made solely on the basis of information contained in an offering circular publishedin relation to such an offering.

By participating in this document, you agree to be bound by the foregoing limitations.

This document contains statements that constitute forward looking statements.

These statements appear in a numberof places in this document and include statements regarding the intent, belief or current expectations of Nippon SteelCorporation or its officers with respect to its financial condition and results of operations, including, without limitation,
future loan loss provisions and financial support to certain borrowers.

Such forward looking statements are notguarantees of future performance and involve risks and uncertainties, and actual results may differ from those in suchforward looking statements as a result of various factors.

The information contained in this document, is subject tochange, including but not limited, to change of economic conditions, financial market conditions, and change of legislation/ government directives.
Any statements in this document, other than those of historical facts, are forward-looking statements about future
performance of Nippon Steel Corporation and its group companies, which are based on management’s assumptions andbeliefs in light of information currently available, and involve risks and uncertainties. Actual results may differ materiallyfrom these forecasts.

16© 2021 NIPPON STEEL CORPORATION All Rights Reserved.