Business Results for the Fiscal Year
2020 (Ended March 31, 2021)
May 18, 2021

Naotaka Miyauchi
Representative Director &President, The Japan SteelWorks, Ltd.

© The Japan Steel Works, Ltd. All Rights Reserved.

© The Japan Steel Works, Ltd. All Rights Reserved.

2

Our vision behind the FIRST ENGINEER

In any group of penguins that is out looking for food, there is a penguin who will take the lead injumping into the sea, despite the risk of encountering natural predators.

Using this brave penguin as an analogy, a pioneering company that taps an uncharted area canbe called the first penguin of the business world.

We believe that our mission is to take on the challenge to create new social value and open up
the future, despite facing challenges as first engineer just like the brave penguin does.

© The Japan Steel Works, Ltd. All Rights Reserved.

3

Note

The performance forecasts and other forward-looking statements included in this report are based on theinformation that was available to The Japan Steel Works, Ltd. (the “Company”) and certain assumptions
deemed to be reasonable at the time this report was prepared, and the actual results may differ
significantly from these forecasts due to a variety of reasons.

© The Japan Steel Works, Ltd. All Rights Reserved.

4

PART Ⅰ
Results for FY2020

07 Status of Orders Received, Net Sales and Profits
08 Reasons for Changes in Operating Income
09 Results by Segment
10 Industrial Machinery Products Business
11 Material and Engineering Business
12 Status of Capital Investment, Depreciation, Cash
Flows, Financial Position and R&D Expenses

PART Ⅱ
Forecast for FY2021

14 Forecasts for Orders, Net Sales and Profits
15 Reasons for Changes in Operating Income
16 Results by Segment
17 Industrial Machinery Products Business
18 Material and Engineering Business19 Trends in Order Backlogs

PART Ⅲ
Business Overview

PART Ⅳ
New Medium-Term Management Plan
JGP2025

26 Review on JGP2020
27 Recognition of Business Circumstances and theCompany's Business Opportunities and Risks
28 Environmental Actions Taken as Manufacturer ofGeneral Plastic Processing Machinery
29 Position of New Medium-Term Management Plan
JGP2025
30 JGP2025 Basic Policies
31 Segment Policies
32 Plastic production and processing machinery
33 Molding machines
34 Material and Engineering Business
35 Implementation of ESG Management
36 JGP2025 Numerical Targets (consolidated)
37 JGP2025 Numerical Targets (by segment)
38 Future Growth Envisioned
39 Financial Strategy
40 Dividend Policy

21 Overview of Orders Received in the Current Period for Reference Materials ( 42 - 45):
Main Products in the Industrial Machinery Products
Composition of the Business Segments and Main Products
Business/ Business Segment Change in the Hydrogen Business/
22 Overview of Orders Received in the Current Period for
Trends in Net Sales, Operating Income and Profit /Main Products in the Material and Engineering Business
Trends in Major Assets and Cash Flows / Corporate Code23 Film and sheet manufacturing equipmentof Behavior of JSW (revised on April 1, 2018)24 Molding machines© The Japan Steel Works, Ltd. All Rights Reserved.

5

Results for FY2020
PART I© The Japan Steel Works, Ltd. All Rights Reserved.

6

FY2020：Status of Orders Received, Net Sales and Profits

Orders received, net sales and profits decreased year on
year.
(in billions of yen)
FY2020Results for FY2019(A)

Previous forecast(B)

Results(C)

Change from theprevious year

Ratio to the previous
forecast(C)-(A)(C)-(B)

Orders received

211.5

205.0

181.0

(30.5)(24.0)Net sales

217.5

195.0

198.0

(19.5)

3.0

Operatingincome

18.7

10.0

10.2

(8.5)

0.2

(%)

8.6%

5.1%

5.2%

(3.4%)

0.1%

Ordinary income

19.9

10.0

10.7

(9.2)

0.7

Profit

9.3

6.5

6.8

(2.5)

0.3

Profit per share(yen)

126.66

88.40

93.76

(32.9)

5.36

Dividend pershare (yen)

45.0

35.0

35.0

(10.0)

0© The Japan Steel Works, Ltd. All Rights Reserved.

7

FY2020：Reasons for Changes in Operating Income
Operating income declined 8.5 billion yen due to decreases in production,
sales and prices, as well as the posting of retirement allowance reserves
18.7(in billions of yen)

(5.3)
(4.8)

(0.2)

0.7

2.2

(－)
（＋0.1）(△7.7)(＋1.9)

Increase/decreas
e in production,
sales and prices

Variable cost

Fixed cost

Impact ofexchangerate
fluctuations(1.1)(△1.6)
Provision ofretirement
benefits, etc.

10.2（＋10.0）(△1.4)
Unclassifiable
expenses

Average exchange rates for sales
in US dollars
FY2019: JPY108/USD
FY2020: JPY107/USD

Results for
FY2019*Values in the parentheses are previous forecasts.

© The Japan Steel Works, Ltd. All Rights Reserved.

Results for
FY20208

FY2020：Results by Segment

Orders received, net sales and operating income
decreased year on year in the two segments.
(in billions of yen)

Industrial Machinery Products Business
FY2020Change from the previous year
Results for FY2019(A)

Previous forecast(B)

Ratio to the previous
forecast(C)-(A)

Results(C)(C)-(B)

Orders received

162.6

153.0

145.2

(17.4)(7.8)

Net Sales

171.4

152.0

156.3

(15.1)

4.3

Operating income

19.2

15.0

13.9

(5.3)

(1.1)

(%)

11.2%

9.9%

8.9%

△2.3%

△1.0%

Material and Engineering Business
FY2020Results for FY2019(D)

Previous forecast(E)

Results(F)

Change from theprevious year

Ratio to the previous
forecast(F)-(D)(F)-(E)

Orders received

46.2

48.5

32.7

(13.5)（15.8)Net Sales

42.8

40.0

38.5

(4.3)

(1.5)

Operating income

2.7

1.5

1.8

(0.9)

0.3

(%)

6.3%

3.8%

4.7%

△1.6%

0.9%

© The Japan Steel Works, Ltd. All Rights Reserved.

9

FY2020：Industrial Machinery Products Business
Orders for plastic production and processing machinery were lower than
expected due to a lag in the expected posting of sales from large orders.
On the other hand, orders for molding machines recovered after hitting thebottom in the first quarter and increased year on year.
Net sales / Operating
incomeResults for
FY2019(A)

FY2020Previous
forecast(B)

Results(C)

Change from Ratio to thethe previous previous
year
forecast(C)-(A)(C)-(B)

58.8

(2.5)

(2.2)

50.0

54.5

(10.8)

4.5

44.8

41.0

43.0

(1.8)

2.0

Total

171.4

152.0

156.3

(15.1)

4.3

Operating income

19.2

15.0

13.9

(5.3)

(1.1)

Plastic production
and processing
machinery

61.3

61.0

Molding machines

65.3

Others© The Japan Steel Works, Ltd. All Rights Reserved.

(in billions of yen)Orders received
Results for
FY2019(D)

FY2020Previous
forecast(E)

Results(F)

Change from Ratio to thethe previous previous
year
forecast(F)-(D)(F)-(E)

60.8

60.0

47.4

(13.4)(12.6)

53.3

50.0

57.4

4.1

7.4

48.5

43.0

40.4

(8.1)

(2.6)

162.6

153.0

145.2

(17.4)(7.8)

10

FY2020： Material and Engineering Business

Orders for clad steel plates and pipes decreased significantly year
on year due to a lag in the expected posting of sales from large
orders.
Orders received

Net sales / Operating
incomeResults for
FY2019(A)

FY2020Changefrom theprevious
year

Ratio to theprevious
forecast

FY2020Results for
FY2019(D)

Previous
forecast(E)(in billions of yen)

Changefrom theprevious
year

Ratio to theprevious
forecast

Previous
forecast(B)

Results
(C)

19.6

20.5

19.9

0.3

(0.6)

22.9

21.0

21.9

(1.0)

0.9

Clad steel plates and
pipes

12.8

11.0

10.5

(2.3)

(0.5)

14.9

18.0

1.7

(13.2)(16.3)Engineering, etc.

10.4

8.5

8.1

(2.3)

(0.4)

8.4

9.5

9.1

0.7

(0.4)

Total

42.8

40.0

38.5

(4.3)

(1.5)

46.2

48.5

32.7

(13.5)(15.8)

Operating income

2.7

1.5

1.8

(0.9)

0.3

Steel castings andforgings© The Japan Steel Works, Ltd. All Rights Reserved.

(C)-(A)(C)-(B)

Results(F)(F)-(D)(F)-(E)

11

FY2020：Status of Capital Investment, Depreciation, Cash Flows, Financial Position and R&D
ExpensesCapital Investment

7.8

FY2016

Net Assets

12.5

10.5

9.9

9.5

Depreciation

6.4
4.0

4.4

FY2017FY20185.7

FY2019FY2020Interest-bearing debt.
132.4

129.8

118.6

6.0

(in billions of yen)

Financial Position

Status of Capital Investment and Depreciation

0.44

0.40
51.5

51.4

Net debt.
D/E Ratio
141.9

0.38
50.8

0.40
56.8

(22.8)(24.6)(27.6)(32.5)FY2017 ending FY2018 ending FY2019 ending FY2020 ending
March 31, 2018 March 31, 2019 March 31, 2020 March 31, 2021

Status of Cash Flows
Operating CF

Investing CF

Status of R&D Expenses
Industrial Machinery Products
New BusinessFree CF

26.7
18.9

21.7

4.3

4.5

4.7

4.6

FY2016FY2017FY2018FY2019FY202011.5
1.1 (0.2)
(5.0)

5.8

(1.3)

(13.6)FY2016

4.2
14.7

12.0

(1.6)

Material and Engineering(3.2)(13.1)FY2017FY2018FY2019© The Japan Steel Works, Ltd. All Rights Reserved.

FY202012Forecast for FY2021
PART Ⅱ© The Japan Steel Works, Ltd. All Rights Reserved.

13

FY2021：Forecasts for Orders, Net Sales and Profits
Orders received, net sales and profits are expected to increase
year on year.

(in billions of yen)

Change from the previous year

Forecast for FY2021（B）

Results for FY2020（A）(B)-(A)

Orders received

181.0

254.0

73.0

Net Sales

198.0

226.0

28.0

Operating income
(%)

10.2
5.2%

16.0
7.1%

5.8
1.9％

Ordinary income

10.7

16.0

5.3

Profit

6.8

11.0

4.2

93.76

149.60

55.84

35.0

45.0

10.0

Profit per share (yen)Dividend per share (yen)© The Japan Steel Works, Ltd. All Rights Reserved.

14

FY2021：Reasons for Changes in Operating Income
Increase of 5.8 billion yen mainly due to rises in production and net sales.
（Unit：billions of yen）

7.3

(2.5)
4.8

16.0

(3.0)
Variable cost

10.2

(0.8)
Fixed cost

Increase/decreas
e in production,
sales and prices

Impact ofexchange rate
fluctuations

Provision ofretirement
benefits, etc.

Average exchange rates for sales
in US dollars
FY2019: JPY107/USD
FY2020: JPY103/USD

Results for
FY2020© The Japan Steel Works, Ltd. All Rights Reserved.

Forecast for
FY202115

FY2021：Results by Segment

Orders received, net sales and operating income are
expected to increase year on year in the two segments.
(in billions of yen)

Industrial Machinery Products BusinessResults for FY2020（A）

Forecast for FY2021（B）

Change from the previous
year(B)-(A)

Orders received

145.2

207.0

61.8

Net Sales

156.3

176.0

19.7

Operating income
(%)

13.9
8.9%

17.8
10.1%

3.9
1.2％

Material and Engineering Business
Forecast for FY2021

Results for FY2020
（A）

（B）

Change from the previous
year(B)-(A)

Orders received

32.7

43.0

10.3

Net Sales

38.5

46.0

7.5

Operating income
(%)

1.8
4.7%

1.9
4.1%

0.1
(0.6%)© The Japan Steel Works, Ltd. All Rights Reserved.

16

FY2021：Industrial Machinery Products BusinessEconomic conditions will be strong from the perspective of orders for plastic
production and processing machinery as well as molding machines.

Orders received

Net sales / Operating income

Results for FY2020（A）
Plastic
production andprocessing mach
inery

Forecast for
FY2021（B）

Change from theprevious year(B)-(A)

Results for FY2020（C）

Forecast for
FY2021（D）(in billions of yen)

Change from theprevious year(D)-(C)

58.8

64.0

5.2

47.4

97.0

49.6

Molding
machines

54.5

66.0

11.5

57.4

70.0

12.6

Others

43.0

46.0

3.0

40.4

40.0

(0.4)

Total

156.3

176.0

19.7

145.2

207.0

61.8

Operatingincome

13.9

17.8

3.9

© The Japan Steel Works, Ltd. All Rights Reserved.

17

FY2021：Material and Engineering Business

Orders for clad steel plates and pipes are expected to rise
sharply due to the posting of sales from orders carried overfrom the previous year.
Orders received

Net sales / Operating income

Results for FY2020（A）

Steel castings
and forgings

Forecast for
FY2021（B）

Change from theprevious year(B)-(A)

Results for FY2020（C）

Forecast for
FY2021（D）(in billions of yen)
Change from theprevious year(D)-(C)

19.9

24.0

4.1

21.9

20.0

(1.9)

Clad steel plates
and pipes

10.5

11.6

1.1

1.7

15.0

13.3

Engineering, etc.

8.1

10.4

2.3

9.1

8.0

(1.1)

Total

38.5

46.0

7.5

32.7

43.0

10.3

Operatingincome

1.8

1.9

0.1

© The Japan Steel Works, Ltd. All Rights Reserved.

18Order backlog trends and forecast(in billions of yen)

Trends in Order Backlogs by Segments
Industrial Machinery Products

164.4

Material and Engineering

187.8

183.7

43.7

36.5

37.8

125.9

FY2016

Others

188.8

177.7
160.8
40.6

143.0

145.1

136.4

FY2017FY2018FY2019

31.9

34.9

156.2
125.2

FY2020

FY2021(Forecast)© The Japan Steel Works, Ltd. All Rights Reserved.

19

Business Overview
PART Ⅲ© The Japan Steel Works, Ltd. All Rights Reserved.

20

Overview of Orders Received in the Current Period for Main Products in the
Industrial Machinery Products BusinessIndustrial Machinery
Products BusinessBusinesssentiment(Year-on-yearcomparisons)Film and sheet manufacturing
equipment

Pelletizers

Twin-screw extruders

Molding machines

FPD equipment

After-sales services© The Japan Steel Works, Ltd. All Rights Reserved.

Economic conditions from the perspectives of orderacquisition Market conditions for equipment for separators are favorable,
reflecting active investments against the backdrop of an increasein EV production.

 Market conditions continues to be favorable mainly in China,
among other countries.

 The market is on a path toward recovery from the slump causedby the impact of COVID-19.

 The market has recovered and continues to be strong.
 The FPD market continues to be tough despite recovery indemand for smartphones, among other products, because theappetite for new investment is still weak.
 The market is on a path to recovery after hitting bottom in thefirst quarter of the previous year (April to June in 2020) due tothe impact of COVID-19.

21

Overview of Orders Received in the Current Period for Main Productsin the Material and Engineering Business

Material and Engineering
Business

Businesssentiment(Year-on-yearcomparisons)Economic conditions from the perspectives of order acquisition

Steel castings and forgings

 The market is gradually recovering for the impact of COVID-19.

Clad steel plates and pipes

 Business conditions are difficult in terms of order acquisition due
to the postponement and review of the natural gas project.

Engineering, etc.

© The Japan Steel Works, Ltd. All Rights Reserved.

 Orders for plant repair work continues to solid and those forpublic works are expected to contribute.

22Film and sheet manufacturing equipment
Forecast of the number of EV (PHEV andEV) produced (*)
Market-based forecast (Previous forecast)Market-based forecast (New forecast)

Policy-base forecast (Previous forecast)）

Our strategy

Policy-base forecast (New forecast)）(Thousandunits)

35,0001

30,000Develop facilities to respondto an increase in battery
density in cooperation withcustomers.

25,000Upturn due to theaccelerated trend inelectrification amid
the COVID-19
pandemic.

20,00015,0002

10,0005,000
0Strengthen measures to
respond to enhancements
in quality

Strengthen our ability to provide
competitive maintenance services.
Strengthen the service
structures in China and Europe.

2020

2021

2022

2023

2024

2025

2030 （year）

The market is responding to EV promotion policies launched inmany countries in the world.
Business conditions are improving in terms of acquiring orders
for our film sheet manufacturing equipment.
Source: Data for the previous forecast and new forecast have been cited, respectively, from the "2020 CURRENT STATUS AND FUTURE
PROSPECTS OF XEV LIB MARKET ～the 1st HALF REPORT”, and the on the "Automotive Lithium-ion Battery Market 2020-2021” issued by
Yano Research Institute Ltd. The report on data for the new forecast reflects trends, such as the economic effects of COVID-19, observed after
the issuance of the report on data for the previous forecast(*) The policy-based forecast is based on the scenario in which relative high growth rates are maintained, providing that targeted numbers ofxEV (electric vehicles) introduced by automobile manufacturers and governments of respective countries will be in line with their projections.
The market-base forecast is based on the scenario in which growth rates are lower than those in the policy-based forecast, taking into
consideration a certain amount of time required to address a range of issues for the popularization of xEV and expansion of the market
thereof. "Previous" data is the estimated value for 2020, predicted value after 2021 (as of July 2020), this data is the actual value for 2020, predicted value after 2021 (as ofFebruary 2021)© The Japan Steel Works, Ltd. All Rights Reserved.

Film and sheet manufacturing equipment

23

Molding machines

Quarterly Results and Forecastswith Respect to Orders for Molding
Machines(in millions of yen)
25,00020,00015,00010,000

5,000

18.3期
FY2017
1Q

2Q

3Q

4Q

19.3期
FY2018
1Q

2Q

3Q

4Q

FY2019
20.3期
1Q

2Q

3Q

4Q

FY2020
21.3期
１Q

2Q

3Q

4Q

FY202122.3期
1Q(Forecast)Market Outlook

Our initiatives / Target markets

The market, which had been sluggish for more than
two years, is recovering after hitting bottom in thefirst quarter of the fiscal year ended March 31, 2021.

1

Domestic demand will remain strong, mainly due todemand associated with stay-at-home requirements
and automotive-related orders are expected torecover fully in the current fiscal year.

2In the second half of the fiscal year ended March 31,
2021, the overseas market will remain strong, mainly
in China and the United States, which have achieved arecovery ahead of other countries.

© The Japan Steel Works, Ltd. All Rights Reserved.

2Q(Forecast)

3

Strengthening the household goods andsundries sector, which is expected to growdue to a rise in demand associated withstay-at-home requirements
Targeting the automotive sector(i) Introducing a new series of large machines.
(ii) Expand the lineup of 2 Platen Ultra Large
Injection Molding Machine.
(iii) Introduction of a large-scale magnesium
alloy injection molding machines.
Establish global production
systems and increase production
capacity24

New medium-term
management plan
JGP2025
PART Ⅳ© The Japan Steel Works, Ltd. All Rights Reserved.

25

Review on JGP2020

JGP2020: 3 Basic Policies (priority issues)
Optimization of Management Resources andStrengthening of Alliances

1

Achievements•

Expanded the plastic processing machine complex
Made GM Engineering Co., Ltd. into a subsidiary, and executed absorption-typemergers with Nichiyu Machinery Co., Ltd. and Meiki Co., Ltd.

•

Spun off the material and engineering business (into Japan Steel Works M&E,
Inc.)

•

Started collaboration with Tsukishima Kikai Co., Ltd.

•Set up a joint venture with JX Nippon Mining & Metals Corporation

Strengthening of After-Sales services(Stock-Based Business)

2

Achievements•

Launched parts centers in Japan and in Europe•

Built a plant dedicated to services•

Commenced operation of remote maintenanceAcceleration in Exploration and Developmentof New Businesses

3•

Launched a hydrogen-related business and transferred it to Japan Steel Works
M&E, Inc.

•

Decided on focus on three business domains of photonics, composite materials
and metal materials.

Achievements© The Japan Steel Works, Ltd. All Rights Reserved.

Issues still to beaddressed•

Press further ahead with theshift to plastic processing
machine complex•

Increase competitiveness ofexisting products•

Create new core businesses
that will follow plastic
processing machinery•

Generate constant profit in
the Material and Engineering
Business•

Swiftly attain profitability innew businesses

26

Recognition of Business Circumstances and the Company's Business
Opportunities and Risks

Climate change,
natural disasters andinfectious diseases

Disposal of plastic
waste in the sea

Spread of 5G

Acceleration ofcarbon-free shift

Business reform
through digitaltransformation (DX)

Opportunities Electric vehicle (EV) market expansion
 Emergence of biodegradable plastics
 Full-scale investment in 5G infrastructure Advancement of artificial intelligence (AI)and Internet of Things (IoT) technologies
 Expansion of consumption chiefly inemerging economies© The Japan Steel Works, Ltd. All Rights Reserved.

Spread of renewableenergyIncrease in remote
working

Divides in international
community and ineconomyDiversification of
consumption

Risks
 Demand shrinkage for plastic processing
machines amid a trend towards reducing
plastic consumption
 Reduction in investment in thermal power
generation and oil and gas applications amid atrend towards decarbonization
 Contraction of demand for separator films
after widespread use of all-solid batteries

27

Environmental Actions Taken as Manufacturer of General Plastic
Processing Machinery
Environmental
considerations

Workability

Low weight

Characteristicsof plastics
Insulation

JSW
Technology

Economic
efficiency

Advancing technological capabilities cultivated as a manufacturer ofgeneral plastic processing machinery to address environmental issues
Continuously supporting manufacturing essential to all parts of society

IT

Home electric
appliances© The Japan Steel Works, Ltd. All Rights Reserved.

Automobile-related
products

Food packages

Healthcare-related
products

28

Position of New Medium-Term Management Plan JGP2025• A company with job satisfaction

Towards anunprecedented
manufacturer of generalplastic processing
machinery in the world

Building foundations
for solid growth of
the JSW Group in thenext ten years

and excitement for employees• Growing to a business scale of
300 billion yen

From April 2026
Long-Term Vision

JGP2025

From April 2021 to March 2026

JGP2020

From April 2018 to March 2021

© The Japan Steel Works, Ltd. All Rights Reserved.

29

JGP2025 Basic Policies

Towards the unprecedented generalmanufacturer of plastic processing
machinery in the world

Increase competitiveness to holdthe largest global market sharewith existing products

Accelerate the shift to plastic
processing machine complex

Make constant profit inMaterial and Engineering
Business

1

2
JGP2025
Basic
Policies

Create new corebusinesses

New industrial machinery products

Photonics

Composite materials



Metal materials

3© The Japan Steel Works, Ltd. All Rights Reserved.

4
Implementation of ESG
management

30

Segment policies

Segment

Industrial
Machinery
Products
Business

Material andEngineering
Business

Sub-segment

Business policy

Plastic production andprocessing machinery

Increase the competitiveness of existing products, expand plastic
processing machine complex and expand the service business toplay the role of a core business and drive growth.

Molding machines

Increase production capacity and strengthen sales efforts in key
areas with the aim to be among the world's top five
manufacturers.

Other machinerySpread existing products centering on ELA systems and createa core business subsequent to plastic processing machinery.

Steel castings andforgings
Clad steel plates andpipes

Strengthen the production system and implement strict cost
control to consistently generate profit.

Engineering services
and others

New Business© The Japan Steel Works, Ltd. All Rights Reserved.

Focus on three domains and swiftly attain profitability in each.

31

Industrial Machinery Products Business

Plastic production and processing machinery

Drive growth as JSW's core businessPriority measures
1. Increase the competitiveness of existing products.
(1) Pelletizers
Continue to increase the market share mainly in the brisk Chinese
market.
(2) Twin-screw extruders
Step up overseas expansion chiefly in China and Southeast Asia.
(3) Film and sheet manufacturing equipment
Step up actions to high-quality separator films for lithium-ion batteries.
Focus on growth areas such as 5G-related films with a view to develop
a post separator film business.
2. Expand to plastic processing machine complex.
Boost and capture demand for new products through mergers andacquisitions.
3. Enlarge the after-sales service business.
Expand the service structures in China and Europe.
Make use of the factory dedicated to services to shorten delivery lead times
and to satisfy customer needs.
© The Japan Steel Works, Ltd. All Rights Reserved.

32

Industrial Machinery Products Business

Molding machines

Aim to be among the world's top five
Priority measures
1. Plastic injection molding machines(1) Optimize global production systems and increase production capacity
Hiroshima Plant:
Increase production capacity, mainly for small-sized machines as well as
the capacity to supply to Japan and overseas.
Meiki Plant:
Boost the capacity as a production base for ultra-large machines andspecial machines.
Overseas production bases:
Increase production in China and the United States and commence
production in Europe.
(2) Strengthen sales efforts in key areas
Japan, the United States, China, Southeast Asia and Europe
2. Magnesium alloy injection molding machines
Expand sales of ultra-large machinery to the automobile sector.
3. Blow molding machines
Expand business in the Asia region, including China.

© The Japan Steel Works, Ltd. All Rights Reserved.

33

Material and Engineering Business

Enhance and reform the structure for consistently generating a profit.
Priority measures
1. Steel castings and forgings
Gain orders for high value-added functional materials to boost revenue.
Establish production systems for small and midsize products and mass
produced products to win more orders.
2. Clad steel plates and pipes
Build a production system resilient to fluctuations in operation loads by
reducing the variable and fixed expenses of plants.
3. Engineering service
Increase competitiveness of hydrogen-related products and market
them outside Japan.
Win projects on welded structures for plants and infrastructure geared
to the National Resilience Policy.
Expand the inspection service business using original technologies.

© The Japan Steel Works, Ltd. All Rights Reserved.

34

Implementation of ESG management
Creation of the ESG Promotion
Committee
Set up a cross-departmental committee in April 2021
to carry out ESG activities effectively.

SocialEnvironment

Creation of a humanresourse base forcontinuous growth

Conduct business activities
with environmental
considerations.
 Reduce CO2 emissions
 Move forward with conservation andrecycling of resources (to lower
environmental impacts).
 Step up efforts for carbon neutral
products and environmentallyfriendly products.

 Actions to shift the focus fromwork styles to job satisfaction
 Advancement of the safety
culture Development of next-generation
leaders
 Securing of diversity in theworkforce© The Japan Steel Works, Ltd. All Rights Reserved.

Governance

Practice managementwith greater awareness ofcapital costs for increasing
corporate value
Secure both growth potential
and capital profitability
 Assess the business portfolio withthe use of a four-quadrant
framework Establishment and of criteria forbusiness withdrawal
 Toughening of criteria of investment

35

JGP2025 Target Values (consolidated)

FY2025Net Sales

Ending Mar. 2026

270 billion yen

ROEOperating income

10％27 billion yen

FY2019FY2020

FY2023

FY2025Results

Results

Plan

Plan

Change from
FY2019Net Sales

217.5 billion
yen

198 billion 250.0 billion 270.0 billion
yen
yen
yen

+ 24%

Operatingincome18.7 billionyen

10.2 billion
yen

20.0 billion 27.0 billion
yen
yen

+ 44%

Operatingincome ratio

8.6%

5.2%

8.0%

10.0%

＋1.4PP

ROE

7.2%

5.1%

8.5%

10.0%

+ 2.8PP© The Japan Steel Works, Ltd. All Rights Reserved.

36

JGP2025 Target Values (by segment)
Material and Engineering BusinessIndustrial Machinery Products Business
Plastic production andprocessing machinery(in billions of yen)

Molding machines

Net Sales

Steel castings andforgings

Other machineryOperating incom

500

50.0

210.0
190.0

40.0
400

171.4
27.0

150.0
1,500

1,000
100.0

30.0
300

21.0
200
20.0

0.00

FY2019 Results

FY2023 Plan

FY2025 Plan

© The Japan Steel Works, Ltd. All Rights Reserved.

(in billions of yen)

60.0
600

12.0
120

50.0

50.0

10.0
100

42.8

40.0
400

8.0
80

30.0
300

6.0
60

100
10.0

0
0.0

Operating income

140
14.0

20.0
200
500
50.0

Engineering services

700
70.0

50.0
500

19.2

Net Sales(in billions of yen) (in billions of yen)

2,500
250.0

200.0
2,000

Clad steel plates and
pipes

2.7

3.5

4.0

4.0
40

100
10.0

2.0
20

0.00

00.0

FY2019 Results

FY2023 Plan

FY2025 Plan

37

Future Growth Envisioned
Net Sales

Inorganic growth (e.g. M&A）
New BusinessIndustrial Machinery Products Businesssales:￥270 billion
ROE:10%Material and Engineering BusinessApprox. 220 billion yen

Now© The Japan Steel Works, Ltd. All Rights Reserved.

2025
38

Financial Strategy

Ensure a proper balance between growth investment andreturn to shareholders for the purpose of continuously
increasing corporate value
Growth investment
Capital investment:

45 billion yen

R&D investment:

Revenue frombusiness activities

30 billion yen

M&A investment:••

Effective use of assets
Sales of cross-holding
sharesUse of cash anddeposits© The Japan Steel Works, Ltd. All Rights Reserved.

30 billion yen

Expansion of plastic processing
machine complex
Non-plastic industrial machinery

Return to Shareholders
Dividend* 20 billion yen* Consolidated dividend payout ratio: 30% or more

39

Dividend Policy

Dividend policy in the period of JGP2025
Paying dividends at a level that ensures dividend on equity (DOE) is 2%
or higher while aiming for a consolidated dividend payout ratio of 30% or more.
■ Schematic of dividend policy
Dividends

ProfitLower-limit dividend(DOE of 2％)© The Japan Steel Works, Ltd. All Rights Reserved.

Performance-based dividend(Payout ratio of 30%)40

REFERENCE© The Japan Steel Works, Ltd. All Rights Reserved.

41

Composition of Business Segments and Major Products
Business
Segments

Industrial Machinery Products Business

Organizations

Plastic Machinery B.D. / Injection Molding Machinery B.D.
/ Industrial Machinery B.D. / Ordnance Business H.Q.

Hiroshima

Yokohama

Material and Engineering BusinessJapan Steel Works M&E, Inc.

Nagoya(Meiki)

Other
Businesses
NewBusiness
Promotion
H.Q.

MuroranProduction
Bases

Plastic production and processing
machinery・Pelletizers
・Film and sheet
manufacturing equipment
・Twin-screw extruders
・After-sales services

Molding machines
・Plastic injection molding
machines
・Magnesium alloy injection
molding machines
・Blow molding machines
・After-sales services

・Rotor shafts・Parts for reactors
・Turbine casings(shell, head etc.)
・Die steel
・Parts for steam generators ・Steel rolls for steel
manufacturing

Clad steel products
・Clad steel plates
・Clad steel pipes

Products

Other machinery・Excimer laser annealing(ELA) systems
・Defense equipment
・Railway products・Hot press devices

Markets

Steel castings andforgings

Petrochemi
cals

Industrial
Machinery

New BusinessPhotonics
Composite materials
Metal materials

Engineering services

・Steel structure for plant and infrastructure
・Non-destructive inspection and analyticalinspection services
・Steel pressure vessels for hydrogen storage
and hydrogen storage tanks using hydrogen
absorbing alloys

・Laminators
・Deposition systems
・After-sales services

Automobiles© The Japan Steel Works, Ltd. All Rights Reserved.

IT

DefenseElectric Powerand SteelOil andNatural Gas

NaturalEnergyNew
Business

42

Trends in Net Sales, Operating Income and Profit
FY2015Net Sales
Industrial Machinery Products
Business
Plastic production andprocessing machinery
Molding machines
FPD equipment
OthersConsolidated subsidiaries,
etc.
Material and Engineering
Business
Steel castings andforgings
Electric and nuclear
power
Pressure vessel for oil
refineries
Clad steel plates andpipes
Engineering, etc.
Wind turbines
OthersConsolidated subsidiaries,
etc.
Other Businesses
Operating income
Industrial Machinery Products
Business
Material and Engineering
Business
Other Businesses
Profit

FY2016FY2017(Unit: billions of yen)
FY2018FY2019FY2020

223.3

212.4

212.9

220.1

217.5

198.0

144.3

159.3

170.2

173.6

171.4

156.3

36.4

36.1

50.2

52.5

61.3

58.8

56.4
32.6

57.6
46.8

64.5
37.0

72.7
16.4
20.4

65.3
44.8

54.5
43.0

18.9

18.8

18.5

11.6

-

-

74.8

51.2

40.8

41.2

42.8

38.5

-

-

-

-

19.6

19.9

19.2

19.3

17.2

12.5

-

-

1.4

1.7

1.0

-

-

-

39.3

13.5

7.0

13.0

12.8

10.5

1.2
6.9

3.9
5.3

1.6
5.5

9.5

10.4
-

8.1
-

6.8

7.5

8.5

6.2

-

-

4.0
14.4

1.8
12.3

1.7
21.3

5.2
24.2

4.6
18.7

3.1
10.2

12.4

15.1

23.8

23.5

19.2

13.9

0.7

(2.8)

(1.5)

2.6

2.7

1.8

2.0
(16.6)

0.9
(4.9)

0.8
10.7

0.3
19.9

(0.4)
9.3

0.0
6.8

© The Japan Steel Works, Ltd. All Rights Reserved.

43

Trends in Main Assets and Cash Flows(Unit: billions of yen)
FY2015FY2016FY2017FY2018FY2019FY2020Total Assets

293.1

275.3

297.4

305.5

297.1

316.2

Net Assets

111.3

107.5

118.6

129.8

132.4

141.9

299.41

1,446.44

1,592.47

1,746.91

1,778.94

1,908.76

Equity Ratio （％）

37.5

38.6

39.3

42.0

44.0

44.4

Return on Equity （％）(13.5)

(4.6)

9.6

16.3

7.2

5.1

Operating Cash Flow

19.7

12.0

26.7

1.1

18.9

14.7

(12.1)(13.5)

(5.0)

(1.3)

(13.1)

(3.2)

4.7

(1.2)

(2.4)

(3.7)

(6.1)

2.7

61.4

58.6

77.8

73.8

74.4

88.7

Net Assets per Share (yen) ** Since FY2016, amounts are after
reserve split of stocks

Investing Cash Flow
Financing Cash Flow
Cash and Cash Equivalents
at End of the Period© The Japan Steel Works, Ltd. All Rights Reserved.

44

Corporate Code of Behavior of JSW (revised on April 1, 2018）
At The Japan Steel Works, Ltd., we will comply with all laws and international rules, both to the letter and in spirit, and fulfill oursocial responsibilities with a strong sense of ethics in Japan and overseas as a company that aims to realize a sustainable society basedon the following ten principles.

1.

To promote sustainable economic growth and the resolution of social issues, we will develop useful products, technologies andservices that give consideration to safety through innovation and provide them to society.

2.

We will conduct appropriate transactions and responsible procurement based on fair and free competition. We will also maintainsound relationships with political and government bodies.

3.

To enhance our corporate value, we will make appropriate corporate information available to the public willingly and fairly a ndhave constructive dialogues with a wide range of stakeholders.

4.

We will respect the human rights of all people.

5.

We will earn the trust and satisfaction of society and customers by responding promptly to inquiries from customers after reflecting
the market and customer needs in our products, technologies and services.

6.

We will provide a sound working environment by developing workstyles that respect the diversity, personality and individuality of
employees.

7.

We will take actions proactively, recognizing that addressing environmental issues is an important duty for us as a company.

8.

We will participate in the community and contribute to its development as a corporate citizen.

9.

We will conduct thorough and systematic crisis management against antisocial forces, terrorism, cyberattacks and natural
disasters, etc. that will pose a threat to civil society and corporate activities.

10. Recognizing the realization of the spirit of this code of behavior as its own role, our management will make it fully known to theemployees of the Company and its affiliates after establishing effective governance and encourage the chains to perform acts
based on the spirit of this code of behavior
If any situation that will lose the trust of society occurs in conflict with the spirit of this code of behavior, our management will takethe initiative in solving the problem, investigating the cause and preventing recurrence to fulfill our responsibility.
© The Japan Steel Works, Ltd. All Rights Reserved.

45

©
© The
The Japan
Japan Steel
Steel Works,
Works, Ltd.
Ltd. AllAll Rights
Rights Reserved.
Reserved.