FY

2017 / JGP2020

Business Results for the Fiscal Year Ended March 31,2018

Medium-Term Management Plan “JGP2020”
May 18,2018
The Japan Steel Works,LTD.
Naotaka Miyauchi, Representative Director & President©2018 The Japan Steel Works, LTD. All Rights Reserved.

【Cautionary 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.
Unless otherwise noted, “previous forecast values” are those released on November 15, 2017.

©2018 The Japan Steel Works, LTD. All Rights Reserved.

1

INDEXＰＡＲＴ Ⅰ
Financial Results for FY2017 and Review of JGP2017
０４
０５
０６
０７
０８
０９
１０
１１

Consolidated Actual Results for FY2017
Increase/Decrease in Operating Income
Orders Received,Net Sales and Operating Income by Segment
Steel and Energy Products BusinessIndustrial Machinery Products Business
Review of Medium-Term Management
Plan”JGP2017”(FY2015~2017）
Capital Investment/Depreciation,Cash Flows,Financial Position
and R&D costs
Order Backlog Situation－Medium-Term Management Plan “JGP2020”－
ＰＡＲＴ Ⅱ
JSW’s History＜JSW’s Past, Present and Future＞
１３ JSW’s "Monozukuri" and Value creation
１４
Ⅰ Resolution of a National Issue Led to Foundation
１５
Ⅱ Shift to Meet Civilian Demand
１６
Ⅲ Toward a General Materials and Mechatronics Company
１７
Ⅳ Opening the Future of Manufacturing
１８ JSW Core Competence
１９ Manufacturing and Development Bases with Strong“Monozukuri”DNAＰＡＲＴ Ⅲ
JSW’s Value Creation＜JSW’s management”四方よし“＞

２１

The JSW Group’s Management Philosophy and Philosophy
System
２２ JSW’s management “四方よし”
２３ JSW's model of value creation
２４～２６ Actions for Continuously Increasing Corporate ValueＰＡＲＴ Ⅳ
Medium-Term Management Plan “JGP2020”＜JSW’s Future Vision＞
２８
２９

３０
３１
３２
３３
３４
３５
３６
３７
３８
３９
４０
４１

Corporate Vision for FY2030 and Basic Concept Behind JGP2020
Basic Concept Behind JGP2020 -Business scale and growthpotential by each productsTrend of Business Results by Segment (Net sales and Operating
Income)Concept of JGP2020
Numerical Target for JGP2020
3 Basic Policies (priority issues)
Optimize Management Resources and Strengthen Alliances ３①Steel and Energy Products Business①Collaboration with Tsukishima Kikai Co.,Ltd.
②Film and Sheet Equipment③Injection Molding Machines④Laser Aneealing Systems
Strengthen After-Sales Services (Stock-Based Business)
Step Up the Search for and Fostering of New Businesses
Financial Strategies

ＰＡＲＴ Ⅴ
Projection for the Fiscal Year Ending March 31,2019
４３
４４
４５
４６
４７
４８

Projection for FY2018
Forecast for Increase/Decrease in Operating Income
Changes in Categories in Disclosure of Forecast by Main
Product
Projected Orders received,Net sales and Operating income
by Segment
Forecast for Industrial Machinery Products
Forecast for Steel and Energy Products Business

Reference (52~54)：
Trends of Net Sale,Operating Income and Profit/Trends of assets
situation and cash flow/ Corporate Code of Behavior of JSW(revised on April 1,2018)©2018 The Japan Steel Works, LTD. All Rights Reserved.

2

Financial Results for the Fiscal Year Ended March 31, 2018
and Review of JGP2017©2018 The Japan Steel Works, LTD. All Rights Reserved.

3

Consolidated Actual Results for FY2017
Order received and net sales were better than expected,and profit
increased,reflecting improvement in costs（Unit：Billions of yen）
FY2017FY2016（A）

Previous
forecast（B）

Actual results（C）

Compared tothe previousyear（C）-（A）

Compared tothe previous
forecast（C）-（B）

Order received

177.5

220.0

236.0

58.5

16.0

Net sales
Operatingincome（ratio）
Ordinary income

212.4

210.0

212.9

0.5

2.9

12.3
5.8%

18.0
8.6%

21.3
10.0%

9.0

3.3

12.1

18.0

22.1

10.0

4.1

Profit(Loss)

△4.9

11.0

10.7

15.6

△0.3

Profit(Loss)per share(yen)△67.61※1

149.68145.77213.38△3.91

Dividends per
share(yen)25.0※135.0

37.5※212.5

2.5※1 The company conducted a 1-for-5 reverse common stock split effective on October 1,2016. For the sake of simplicity,the profit(loss) per share and dividends per share in the table above are calculated using the number of shares after the reverse stock split.
※2 The dividend for the fiscal year ended March 31, 2018 consists of an ordinary dividend of 35 yen per share, which is acombination of 17.50 yen per share paid at the end of the second quarter and another 17.50 yen per share paid at the end of the
fiscal year, and the 110th anniversary commemoration dividend of 2.50 yen per share.
©2018 The Japan Steel Works, LTD. All Rights Reserved.

4

Increase/Decrease in Operating Income for FY2017
Operating income increased 73% year on year thanks to increased production
and sales in Industrial Machinery Product Business and improvement in costs.
（Unit：Billions of yen）

+3.4
+3.1
+5.6
（+4.4）

12.3（△0.8）（+2.7）

Variable costs（+0.5）
Increase/decreasein production,sales
and price△0.6

Fixed costs

Foreignexchange
loss/gain△1.7（－）
Disposal of
inventories（steel andenergy products
business）

△0.8

21.3

（△1.1）
Unclassifiable
costs

Average exchange rate in sales at USD
FY2016：JPY112／USD
FY2017：JPY110／USD※（ ）・・・Compared to the previous forecast

FY2016©2018 The Japan Steel Works, LTD. All Rights Reserved.

FY20175

Orders Received,Net Sales and Operating Income by Segment for FY2017
Industrial Machinery Products Business posted gains in sales and income on theback of strong orders received, while Steel and Energy Products Business recorded
decreased sales.

（Unit：Billions of yen）

Steel and Energy Products Business
FY2017FY2016（A）
Ordersreceived
Net sales
Operatingincome（ratio）

Previous
forecast（B）

Actual results（C）

Compared tothe previousyear（C）-（A）

Compared tothe previous
forecast（C）-（B）

19.5

60.0

47.5

28.0

△12.5

51.2

44.0

40.8

△10.4

△3.2

△2.8
-5.5%

0.3
0.7%

△1.5
-3.7%

1.3

△1.8

Compared tothe previousyear（C）-（A）

Compared tothe previous
forecast（C）-（B）

Industrial Machinery Products Business
FY2017FY2016（A）
Ordersreceived
Net sales
Operatingincome（ratio）

Previous
forecast（B）

Actual results
（C）

156.2

158.5

186.9

30.7

28.4

159.3

164.5

170.2

10.9

5.7

15.1
9.5%

19.0
11.6%

23.8
13.9%

8.7

4.8

©2018 The Japan Steel Works, LTD. All Rights Reserved.

6

Steel and Energy Products Business for FY2017
Net sales tumbled despite brisk solid orders received overall, including growthof orders for clad steel pipes.
（Unit：Billions of yen)
Net sales・Operating income

Orders received
FY2017FY2017FY2016（A）

Previous
forecast（B）

Actualresults（C）

Compared Comparedto theto theprevious previous
year
forecast（C）-（A）（C）-（B）FY2016（D）

Previous
forecast（E）

Actualresults（F）

Compared Comparedto theto theprevious previous
year
forecast（F）-（D）（F）-（E）Electric andnuclear powerPressure
vessels for oil
refineries
Clad steel
plates and
pipes

19.3

17.5

17.2

△2.1

△0.3

11.1

15.0

13.0

1.9

△2.0

1.7

1.0

1.0

△0.7

0

0.5

1.0

3.6

3.1

2.6

13.5

10.0

7.0

△6.5

△3.0

8.2

29.0

13.9

5.7 △15.1 ※Wind turbines

3.9

1.0

1.6

△2.3

0.6

△13.3

1.0

1.5

14.8

0.5

Other

5.3

6.0

5.5

0.2

△0.5

5.4

6.0

7.0

1.6

1.0

Consolidated
group
companies,etc.

7.5

8.5

8.5

1.0

0

7.6

8.0

8.5

0.9

0.5

Total

51.2

44.0

40.8

△10.4

△3.2

19.5

60.0

47.5

28.0 △12.5

Operatingincome(loss)

△2.8

0.3

△1.5

1.3

△1.8

©2018 The Japan Steel Works, LTD. All Rights Reserved.

※failed in the contract of planned project in 3Q

7

Industrial Machinery Products Business for FY2017

Growth was driven by continued strong performances in film and sheet
manufacturing equipment and molding machines.
（Unit：Billions of yen）
Orders received

Net sales,Operating income
FY2017Compared Comparedto theto theprevious previous
year
forecast（C）-（A）（C）-（B）FY2016（A）

Previous
forecast（B）

Actualresults
（C）

36.1

50.0

50.2

14.1

57.6

61.0

64.5

Other

46.8

35.5

Consolidated
group
companies,etc.

18.8

Plastic
production andprocessing
machinery
Molding
machines(consol
idated)Total

OperatingincomeFY2017Compared Comparedto theto theprevious
previous
year
forecast（F）-（D） （F）-（E）FY2016（D）

Previous
forecast（E）

Actualresults
（F）

0.2

44.7

50.0

63.8

19.1

13.8

6.9

3.5

57.5

60.0

72.4

14.9

12.4

37.0

△9.8

1.5

34.2

30.0

30.5

△3.7

0.5

18.0

18.5

△0.3

0.5

19.8

18.5

20.2

0.4

1.7

159.3

164.5

170.2

10.9

5.7

156.2 158.5

186.9

30.7

28.4

15.1

19.0

23.8

8.7

4.8

©2018 The Japan Steel Works, LTD. All Rights Reserved.

8

Review of Medium-Term Management Plan (JGP2017／FY2015-2017)
Steel and Energy Products Business looks set to return to profitability in FY2018,
and Industrial Machinery Products Business achieved targets early and is expected to
grow even further.
Historical results

Steel and Energy Products Business

Increase profitability of existing businesses

Strategy for steady business growth and renewed growth
after JGP2017 through “defensive management”(Billions of yen）

FY2016FY2017

JGP2017（FY2017 forecast）

Net Sales

51.2

40.8

60.0

Operatingincome

△2.8

△1.5

0

Although fixed costs were reduced
due to an impairment loss,
an operating loss was posted,reflecting a significant decreasein sales of clad steel pipes for natural gas.

Impairment loss treatment was undertaken
for the third straight year. Its effect and the
movements of staff led to the shrinkage of
deficits.Even so, the target was not met due
to a sales decline. Improvement efforts
will be continued to attain profitability
in the next fiscal year.

Industrial Machinery Products Business
Identify growth opportunities and accelerate businessexpansion through “offensive management”(Billions of yen）

FY2016FY2017

159.3

170.2

158.0

Operatingincome

15.1

23.8

14.0

Performance will be strong, driven by film andsheet manufacturing equipment and molding
machines. Net sales and operating income
further exceeded the medium-term
management plan targets reached in FY2016.

©2018 The Japan Steel Works, LTD. All Rights Reserved.

Foster new products & businesses and make themcompetitive as soon as possible
・Slow in fostering new businesses generally
・R&D Headquarters was reorganized into
New Business Promotion Headquarters on
2nd half of FY2017 to promote development.
Need to promote and increase fostering of new businesses.

JGP2017（FY2017 forecast）

Net Sales

Both net sales and operating income in
FY2016 achieved the targets for the
final fiscal year of the medium-term
management plan a year ahead ofschedule on the back of strong orders.

・Achieved higher productivity and lower costs in film
and sheet manufacturing systems and injection
molding machines through capital investment
・Profitability also improved through expansion of service
business・Although market conditions in Steel and Energy Products
Business are challenging, a return to profitability through the
reduction of fixed costs is in sight in FY2018.

Reinforce Group management and promote alliances
・ Made steady progress investing management resourcesin Hiroshima Plant, improving profitability of affiliatedcompanies, and strengthening corporate governance.
・ Although small business acquisitions are underway,
far-reaching initiatives to strengthen alliances arelacking.
・ Muroran reconstruction project is advancing steadily.

9Capital Investment /Depreciation, Cash Flows, Financial Position and R&D costs（Unit：Billions of yen)

Financial position

Capital investment and depreciation

20

Capital investment
15

14.0

12.9
11.0

10

140

Depreciation120

Net assets
Net interest -bearing debt
111.3

100

10.7

9.5

7.9

Interest-bearing debt
D/E ratio
118.6

107.5

0.60

0.48

0.45

0.70

0.44

0.50

80

7.8
6.4

5.2

4.0

5

51.0

49.6

60

0.40

51.4

0.30

40

0.20

20

0.10

0
△ 20

0
FY2013

FY2014FY2015FY2016FY2017

△12.3

△ 40

FY20150.00△8.7
FY2016△27.6△ 0.10FY2017

Cash flows
30
20

Operatin cash flows

Investing cash flows

19.7

Free cash flows

26.7

R&D costs
Industrial Machinery Products Business

21.7

10

4.0

7.6

△5.0

△ 10

FY20154.2

4.2

FY2014FY2015FY2016

4.3

2.0

△ 1.5

△ 12.1

3.8

4.1

3.0

0

△ 20

Steel and Energy Products Business

5.0

12.0

△13.5
FY2016©2018 The Japan Steel Works, LTD. All Rights Reserved.

1.0
0.0

FY2017FY2013

FY201710

FY2017: Order Backlog Situation
Trends for Order Backlog by Segment

300.0

Steel and Enegry Products BusinessIndustrial Machinery Products Business

Real Estate and Other Businesses（Unit：Billions of yen）

250.0

210.9
200.0

0.7

199.2

187.4

0.6

164.4
150.0

0.6

105.6

174.4

0.4

0.5

129.1
125.9

100.0

50.0

130.3

142.6

104.6
69.5
37.8

43.6

44.4

FY2016FY2017 end of Sep.

FY20170.0
FY2014FY2015©2018 The Japan Steel Works, LTD. All Rights Reserved.

11

－JGP2020 MEDIUM-TERM MANAGEMENT PLAN－
JSW’s History
JSW’s Past, Present and Future©2018 The Japan Steel Works, LTD. All Rights Reserved.

12

JSW’s "Monozukuri" and Value creation

市場を創るものづくり
Innovation / Market Creation©2018 The Japan Steel Works, LTD. All Rights Reserved.

13

I. Resolution of a National Issue Led to Foundation
JSW started as a pioneering joint venture involving overseas businesses.
JSW was founded though the joint investment of three companies – Hokkaido Colliery & Steamship Co., Ltd. and two
British firms, namely Sir W G Armstrong Whitworth & Co Ltd and Vickers Ltd. Its head office and plant were located in the
Hokkaido city of Muroran. Its business was started as a national project aimed at resolving the issue of attaining thedomestic production of weapons. Later, it enhanced its technologies and skills in materials and machinery products.

1907

1930

5.0

40

35
4.0
30
3.0

25

2.0

20

Hiroshima Plant

15

Yokohama Plant
1.0

10

JSW manufactured forged steel and bulletproof steel plates fromwhich the main guns of battleships were produced. It worked
5 hard to establish a method of manufacturing large-sized steel
ingots for large diameter gun barrels.

The Hiroshima Plant engaged in machining and assembling gun
barrels, while the Yokohama Plant undertook the production ofmachine guns.
0.0
Through integrated production from materials, JSW
accumulated technologies and skills for both materials andmachinery products.
-1.00©2018 The Japan Steel Works, LTD. All Rights Reserved.

14

II. Shift to Meet Civilian Demand
Using excellent manufacturing steel technologies for general industry
After World War II, JSW began to meet civilian demand with the use of technologies and skills nurtured through weaponry
manufacturing. It expanded its business horizons into power generation, the chemical industry, steel manufacture,
shipbuilding and other domains to solidify its footing as a civilian manufacturer. In addition, it introduced the latest
technologies from overseas in accurate anticipation of needs in the days towards the high growth period and embarked on
the manufacture and sales of injection molding machines. With its high level of prescience, JSW established its foundation
to stand as today’s general plastic machinery manufacturer.

1940

1960

70,0005,000.0

60,0004,000.0

50,0003,000.0

40,0002,000.0

30,000Extruder20,000JSW manufactured extruders with the use of machining andcontrol technologies it had accumulated since the pre-war
period through artillery production. This triggered JSW’s
10,000expansion of the plastic business.

0©2018 The Japan Steel Works, LTD. All Rights Reserved.

Injection Molding Machine

1,000.0

JSW introduced technologies from West Germany to embark on
the manufacture of injection molding machines. It
subsequently enriched its lineup of blow molders and various0.0
other molding machines. With plastic and rubber manufacturingsystems, it established its position as a general plastic-1,000.0
machinery manufacturer.

-2,000.0

15

Ⅲ. Toward a General Materials and Mechatronics Company

Serving all industrial domains as a general materials andmechatronics company
In the high growth period, JSW was highly regarded in Japan and overseas for its long-accumulated forging and welding
technologies.
With growing demand for clad steel pipes and overseas sales of pressure vessels for oil refining, it developed a special
forging method to become the world’s first company to succeed in forging integrated materials for nuclear reactor pressure
vessels. By establishing original sophisticated technologies, it won an increasing number of orders for power generation
1970 infrastructure from around the world.
2000

12,000.0

250,000

10,000.0
8,000.0

200,000

6,000.0
4,000.0

150,000
Clad pipes

Demand for clad pipes increased for the transportation ofnatural gas. They became a mainstay product. Based on forging
100,000
and welding technologies, large pressure vessels for oil refining
were highly rated outside Japan.
50,000Forging process
2,000.0

JSW developed a special forging method for manufacturing
large diameter ring materials. It paved the way for integrated
0.0
forging from large steel ingots. This brought a massive increasein orders for power generation infrastructure to JSW.

-2,000.0-4,000.0-6,000.00©2018 The Japan Steel Works, LTD. All Rights Reserved.

-8,000.0

16

Ⅳ. Opening the Future of Manufacturing

Establishing a brand-new JSW with its growth driven by the Industrial
Machinery Products Business
Amid the change in industrial structure following the spread of information and communication technologies, JSW attains
considerable sales growth of large-sized pelletizers, twin-screw extruders, film and sheet equipment, injection molding
machines and other plastic machinery, and has gained a large market share. JSW will be making a bigger leap toward
being a world-leading general plastic machinery manufacturer with its growth driven by these products.

2000

2018

250,000

Injection Molding Machine

40,000.0

35,000.0
200,000
30,000.0

25,000.0

150,000

Film and sheet equipment

JSW has an extensive lineup of film and sheet equipment that
100,000

meets a wide range of needs, including the need for sheets forgeneral and industrial use, packaging materials, separators andother materials for industrial use and high functional films for
optical applications.

50,000JSW offers electric injection molding machines of various 20,000.0
sizes, from small ones to ultra-large ones. Among others,
large and ultra-large ones are the driving force of theindustry. While primarily meeting the needs of the
15,000.0
automotive industry, they are also matched with manydifferent areas including home electric appliances, electronic
devices, daily necessities, precision devices and medical
10,000.0
equipment.
5,000.00©2018 The Japan Steel Works, LTD. All Rights Reserved.

0.0

17

JSW Core Competence
A company that, alongside its customers, embarks on “first steps” that areahead of the times
JSW is a company that “creates value” through “monozukuri” (good manufacturing practices). DNA that refuses to compromiseon quality plus a high level of technological strength demonstrated even when faced with unprecedently difficult requests,
attention to detail distinctive of Japanese companies, and a strong customer base built up precisely because JSW has tirelessly
continued to meet highly technical requirements - this is why customers choose JSW as their partner when embarking on firststeps.

技術力

先見力

イノベーション力

Technology

PrescientInnovation

Accurately reading the current of
the times and resolutely taking
on unprecedented challenges

Leveraging technological strength andexpertise to establish new technologies
and open up new markets

The DNA of a “monozukuri” company is
to make products that are durable,
unbreakable and good quality©2018 The Japan Steel Works, LTD. All Rights Reserved.

18

Manufacturing and Development Bases with Strong “Monozukuri” DNA“Mastery” supporting JSW in Becoming “No. 1 Global Company in Monozukuri”

Hiroshima Plant
As an expert in plastic machinery, JSW has
been successively creating cutting-edgemachinery with high precision, highreliability and high energy efficiency.
Supplying a broad array of pelletizers, twinscrew extruders, film and sheet equipment
and injection molding machines of various
sizes from small ones to ultra-large ones,
this plant drives the world leading generalplastic manufacturer.

Muroran Plant

Yokohama Plant

Since founding, the Muroran Plant has
played a valuable part in thedevelopment of Japan′s heavy andchemical industries as a steel products
production center. Making use of large
production facilities, such as a 14,000ton hydraulic press, and cutting-edge
equipment, including a 150-ton electroslag remelting furnace, the plant supplies
the world with high-quality products that
include variety of sizes of cast and forgedsteel products, steel plates and pipes andothers for the energy field.

Our excimer laser annealing (ELA) system
for IT products, enabling mass productionof high-quality LCD panels and organic EL
panels, has the top share of its market.
And they're major products in Yokohama
plant.
We are also developing andcommercializing systems for the needs forthe next generation of panels.

©2018 The Japan Steel Works, LTD. All Rights Reserved.

19

JSW’s Value Creation
JSW’s “四方よし(Yonpo Yoshi)” management©2018 The Japan Steel Works, LTD. All Rights Reserved.

20

The JSW Group’s Management Philosophy and Philosophy System
The ideal image of a corporation to which to aspire：
A company that creates changes with creative technology,
and contributes to the development of societyManagement
philosophy

Management
philosophy

１） Continue to provide clients with surprise and excitement
２） Coexist with society and sustain profits
３） Believe in constant change

MissionMission四方よし
Yonpo yoshi「While aiming to achieve stable growth as a company
through monozukuri and value creation, we willcontribute to society by performing our obligations onfour different fronts, ensuring satisfaction for customers,
employees and shareholders as well as fulfilling our
responsibilities to society.

Corporate codeof behavior

Corporate code of
behavior©2018 The Japan Steel Works, LTD. All Rights Reserved.

With the understanding that the unfailing observance of the
Corporate Code of Behavior is the way of meeting our corporatesocial responsibility for achieving a sustainable society, we will
pursue management in consideration of the environment, society
and governance (ESG).
21

JSW’s management “四方よし(Yonpo Yoshi)”
Aiming to achieve stable growth
as a company through“monozukuri” and “value creation”.

買い手よし（Customers
Satisfaction）

Strength

株主よし Monozukuri＋Value creation売り手よし（Shareholders
Satisfaction）

Technology

PrescientInnovation（Employees
Satisfaction）

世間よし（ Fulfilling our responsibilities to society ）Representative Director &President

NAOTAKA MIYAUCHI©2018 The Japan Steel Works, LTD. All Rights Reserved.

22

JSW's model of value creation
Main social issue

JSW’s pursuit of management

Value offered to societythat performs our obligations on four different fronts

Climate change・Environment load issue・
Nature Destruction

Society
Customers

Steel andEnergyProducts

買い手よし（Customer
satisfaction）

Society

Technology

PrescientInnovation

売り手よし（Employeesatisfaction）

Effective corporate governance andan appropriate system of information disclosure©2018 The Japan Steel Works, LTD. All Rights Reserved.

FPD
equipment

Work-life balance
Declining birthrate andaging population
Reform work style

Defenseequipment

世間よし（Fulfilling our responsibilities to society）

Customers

Stock Business | New Business

Energy-saving
countermeasure
Resource Depletion and
Nuclear power

Strength
Monozukuri＋Value creation

Injection
molding
machines（Shareholders
satisfaction）

Plastic
production
andprocessing

Corporate ethics

株主よし・Supply products
contributed to the reductionof CO2・Injection Molding Machines（Promotion of light-weightvehicle）
・Clad Steel Pipes（Spread of natural gas）

Offering cutting-edge
technologies and productsthat are indispensable forthe next generation
・Film and sheet equipment(separators for automotive
batteries)
・FPD equipment（Spread of OLED panels）

Society
Customers
Globally offering
products that help
spread clean energy
・Clad steel pipes（Transport pipes fornatural gas）
・Hydrogen station（Spread of hydrogenenergy）

Employees
Shareholders
Accomplish atransformation into
an attractive firm
and increase
stakeholders’satisfaction andcorporate value

23

Actions for Continuously Increasing Corporate Value－Aiming to be an earth-friendly “monozukuri” company －E

Environmentally friendly
actions

Environmentally friendly
products●Environment Management▷Electric Injection Molding Machine

Acquire and continuously maintain of ISO14001 at

Compared to the conventional hydraulic typeeach plant（since 1998）

・Variation in molding mass reduced by 80%
・Cut power consumption (1/2～1/3）●Activities for Environment Management

Formulate and implement a medium-term
environmental plan
●Reduction of environmental load substances▷Film and Sheet equipment
Helping increase the use of high capacity
lithium-ion batteries for electric vehicles▷Clad Steel Pipes

Comply with the standards for the emission of air

Pipelines for natural gas as clean energy forpollutants, water contaminants and specified

which high demand is expectedchemical substances●Prevention of Global Warming▷Accumulator and Unit for
Hydrogen Station
Products necessary for the development ofReduction of consumption of energy andinfrastructure for fuel cell vehicles ascarbon dioxide discharge

ultimate●Reduction of waste
Promotion for 3R (Reuse/Reduce/Recycle）©2018 The Japan Steel Works, LTD. All Rights Reserved.

green vehicles
Package Unit
for Hydrogen Station

24

Actions for Continuously Increasing Corporate Value- Actions for Fulfilling Social Responsibility -S

Reform work style
Enabling work styles in which employees’
diversity, dignity and personality are
respected and ensuring favorable working
environments●Improvement in labor productivity
Promotion of improvement by utilizing
IT tools etc.
⇒ Building the foundations for corporate
development●Actions for diversity
・ Empowerment of women
Increase the number of female employees,
create an employment environment wherefemale staff can work enthusiastically andpromote them actively
・ Continue recruiting personnel fromaround the world to strengthen thedevelopment and exchange of personnelof foreign nationalities●Improvement in employees satisfaction
Encouragement to take paid leave,reductionof overtime work,and examine
flexible work style©2018 The Japan Steel Works, LTD. All Rights Reserved.

Community
contribution activities
Participate in the community and contributeto its development as a corporate citizen.
●Regional exchange
Regularly exchange with community
through cleanup campaigns andother events●Plant tours, vocational experience
Welcoming schoolchildren from neighboring
elementary and junior high schools forplant tours,Vocational experience events
open to the public

Plant tours,welcoming schoolchildren from the elementary school25

Actions for Continuously Increasing Corporate Value
Establish effective corporate governance and an appropriate system of information
disclosure
Establishing governance for a new era

G

Motonobu Sato
Outside Director

JSW is required to conduct bold management in drastically changing
markets. For this purpose, it is vital to establish solid governance.
Outside directors understand that their duties are to attend weekly
strategic meetings in addition to Board of Directors’ meetings and to
take an active role in substantial discussions on the basis of earning
capacity as the basis of governance.
With a long history and technologies accumulated throughout its
history, JSW is capable of achieving further growth that can beattained by long-established companies. We will make utmost efforts
to establish governance for a new era and lead the reforms ofexisting businesses.

Appropriate risk management and complianceKazuya Jono
OutsideCorporate Auditor©2018 The Japan Steel Works, LTD. All Rights Reserved.

JSW’s Board of Directors has been undertaking active discussions,and outside executives vigorously express their views. Two of thefour corporate auditors are from outside the JSW Group.
We will closely exchange information at the Board of Corporate
Auditors, work with the audit corporation and the internal audit
department, take part in different meetings and carry out individual
audits in a continuous effort to monitor corporate management fromoutsiders’ point of view to ensure appropriate risk management,compliance, and management effectiveness and efficiency.

26

NEW MEDIUM-TERM MANAGEMENT PLAN ‟JGP2020”
JSW’s Future Vision©2018 The Japan Steel Works, LTD. All Rights Reserved.

27

Corporate Vision for FY2030 and Basic Concept Behind JGP2020

ＪＧＰ２０２０

Building foundations for new growth

FY2030

Building foundations to ensure the unfailing growthof the JSW Group for the next ten years

Toward a stable businessportfolio

New business,M&A
Industrial Machinery Products Business
Steel and Energy Products Business～JGP2017

Expand existing business

JGP2020『Aggressive management』
Sowing and nurturing seeds
for expanding businessdomains

Expand business scale

Foster new business
Promotion of restructuringof production system©2018 The Japan Steel Works, LTD. All Rights Reserved.

Attaining stable profitability with the current
business scale
Discovering and developing opportunities for
growthFirmly maintaining existing
businesses

28Basic Concept Behind JGP2020－Business scale and growthpotential by each products
Growth potential

Film and sheet
equipment※

Pelletizer・
Twin-Screw
Extruders※

Injection molding
machines※

FPD equipment※（Laser annealing
systems etc.

Clad steel plates
and pipes
Electric andnuclear power
products※consolidated including after-sales services

Business scale©2018 The Japan Steel Works, LTD. All Rights Reserved.

29

Trend of Business Results by Segment (Net sales and Operating income)

Major business changed from steel energy products to industrial
machinery products
Net sales

Operating income
Steel and Energy Products Business

Steel and Energy Products Business（Billions of yen）
180.0

170.2

35.0

30.1

159.3

30.0

160.0
144.3
140.0

130.1
121.9
112.9

120.0

97.6

100.0
80.0

25.0

23.8

25.0

126.3
118.3

113.9

Industrial Machinery Products Business（Billions of yen）

Industial Machinery Products Business

20.0

16.7

105.0
15.0

88.2
77.3

74.8

67.6

12.1

11.5

11.3

10.0

66.2

60.0

15.1
12.4

3.2

5.0

51.2

1.3

40.8
0.0

40.0

0.7

-0.5
-3.6

-3.9

2013

2014

-2.8

-1.5

-5.0

20.0
0.0

-10.0
FY2009 2010

2011

2012

2013

2014

©2018 The Japan Steel Works, LTD. All Rights Reserved.

2015

2016

2017

FY2009 2010

2011

2012

2015

2016

2017

30

Concept of JGP2020“Growth” in Industrial Machinery Products Business, “Rebirth” in Steel andEnergy Products BusinessIndustrial Machinery Products
Business

Steel and Energy Products Business

Growth Rebirth©2018 The Japan Steel Works, LTD. All Rights Reserved.

31

Numerical target for JGP2020（Unit：Billions of yen)JSW
FY2017

Consolidated
operating incomes

Consolidated sales

≧

260.0

≧

30.0

JGP2020

Consolidated sales

212.9≧260.0Consolidated
operating income

21.3

≧30.0

Ratio of operating
profit on sales

10.0%≧11.5%

ROA

3.7％

≧7％

ROE

9.6％

≧14％

billions of yen

billions of yen

11.5 % ）（ＲＯＳ ≧

Industrial Machinery Products Business

Steel and Energy Products Business

FY2017FY2017

JGP2020

JGP2020

Consolidated
sales

170.2

≧205.0Consolidated
sales

40.8

≧45.0

Operating income

23.8

≧28.0

Operating income

△1.5

≧3.0

Ratio of operating
profit on sales

13.9%≧13.6%

Ratio of operating
profit on sales

-3.7%

≧6.6%

©2018 The Japan Steel Works, LTD. All Rights Reserved.

32

JGP2020： 3 Basic Policies (priority issues)

JGP2020～Lay foundations looking ahead to 2030～◆ ”Growth” in Industrial Machinery Products Business,“Rebirth in Steel and Energy Products Business(1) Optimize management resources and strengthen alliances
Rationalization through reallocation of management resources⇒ Actively invest in Industrial Machinery Products Business and restructure Steel and Energy Products
Business according to sales
Scale up business by promoting alliances and M&A⇒ Move away from principle of self-sufficiency(2) Strengthen after-sales services (stock-based business)
Strengthen foundations of service structure focusing on Industrial Machinery Products Business⇒ Generate stable profits and increase customer satisfaction
Build strong customer base through service business⇒ Lay foundations for next businesses(3) Increase exploration and fostering of new businesses
Explore new businesses with an eye on megatrends
Foster and develop business in four areas: aircraft components,hydrogen, crystal device and deposition systems©2018 The Japan Steel Works, LTD. All Rights Reserved.

33

Optimize Management Resources and Strengthen Alliances①Steel and Energy Products Business
Basic
policy● Building a structure for stable profitability toward FY2019 with the current
business portfolio and scale● Commercializing products in new domains
Measures1

Collaboration in manufacturing field with Tsukishima Kikai
Co.,Ltd. .
Establishment of cooperative framework to start operation from April,20192

Improvement of fixed costs
Downsizing 150 employees in Muroran plant group
Liquidation of idle equipment for rightsizing

3

Rapid launch of new businesses
Strengthen framework of new businesspromotion, building of foundations for growth©2018 The Japan Steel Works, LTD. All Rights Reserved.

(Billions ofyen)

FY2017
Results

FY2018Plan

FY2020Plan

Net sales

40.8

45.0

≧ 45.0Operatingincome

△1.5

0.5

≧ 3.0

34

①Steel and Energy Products Business－Collaboration with Tsukishima Kikai Co.,Ltd.－
Concluded a basic agreement regarding collaboration in manufacturing
field with Tsukishima Kikai Co.,Ltd.

Tsukishima Kikai Co.,Ltd.

Producing synergy inthe manufacture oflarge-sized equipment●Efficiency of production system（strengthen competitiveness）●Increase operating throughconsignments from JSW（large-sized pressure vessels,tube sheet）©2018 The Japan Steel Works, LTD. All Rights Reserved.

●Effective use of production
resources with poor operation rates(factory lease,loan personnel to TSK）

●Employing TSK’s technologies tobroaden the array of products forwhich orders can be received

35

Optimize Management Resources and Strengthen Alliances②Film and sheet equipment
Basic
policy● Establish a system for increased production to meet strong demand for separators● Enrich the product lineup with an eye on future hit products to follow the separator

Measures1

Early establishment of increased production system
Doubling production capacity compared to FY 2017
Further increase production capacity to meet special
demand for separators

Production capacity（Index：FY2015=1）
10Previous
forecast

ResultsAheadof schedule8

2Technology development in anticipation ofmarket needs

6

Rapidly ascertain market needs with an eye on future hit
4
Products to follow the separator through joint developmentwith leading companies and create optimal products using
2
the latest technologies
3

Introduce peripherals and technologies
Expand the business by M&A and alliance etc.

©2018 The Japan Steel Works, LTD. All Rights Reserved.

0
FY2015

2016

2017

2018

2019

2020

36

Optimize Management Resources and Strengthen Alliances③Injection Molding Machines
Basic
policy● Build well-established JSW molding machine brands throughmass customization strategy【Mass customization strategy】

Measures1

Bolster products that meet demand for lower weight
and are suited to the era of electric vehicles

Provide differentiated,customized
machines based on a common base tomeet the needs of areas and customers- Increase small-, large- and ultra-large-sized equipment
Expand sales of small-sized products (e.g. for sensors for automotive cameras)
Rapidly market large-sized magnesium injection molding machines (e.g. lamps, electronic devices and casings)
Introduce ultra-large equipment with space-saving features (two-platen)(Shift to large interior and exterior items made of resin)
Millions ofTrends in the number ofcar/yearvehicles sold2

Focus strength on 4 priority regions：Japan ,North America,China and Southesast Asia
Increase production capacity in Hiroshima plant
Increase the production capacity of plants in China and the models thatthey can produce
Build up local customization capacity in the United States

Gasolinecar

EV

EV shareSource：Bloomberg New Energy Finance©2018 The Japan Steel Works, LTD. All Rights Reserved.

37

Optimize Management Resources and Strengthen Alliances④Laser annealing systems
Basic
policy●Enhance existing products by means of differentiation●Introduce new products through the evolution of proprietary
technologies and M&A/alliances1

Implement a differentiation strategy
Broaden the product lineup (support for OLED,
improvement of productivity and upsizing)

2

Commercialize products underdevelopment and create new products

Pannel (unit:hundreds)

MeasuresMarket forecast of OLED for smart phone

OLED

LCD

2,000

1,500

Commercialize systems supporting next-generation displays 1,000

Rapidly commercialize OLED laser applications

Complement technologies through M&A/alliances
50002016 2017 2018 2019 2020 2021 2022

（Source: JSW)©2018 The Japan Steel Works, LTD. All Rights Reserved.

38

Strengthen After-Sales Services (Stock-Based Business)● Strengthen the foundations for a service structure focusing on the Industrial Machinery Products Business-> Generate stable profits and increase customer satisfaction● Build a strong customer base through the service business -> Lay the foundations for the next businesses

Measures

Plastic production and processing

Sales of Service business（Index：FY2012=1)

Expand business by strengthening service structure
Establish of short lead time system

Injection molding machines

2.5

2Strengthen global structure
1.5
Strengthen proposal-based services using IoT
and others for expanding business(e.g. preventive maintenance and other maintenance1
services)

Laser plasma related equipment
Enhance the technical support system in the Chinese
market and rapidly establish a system for the instantdelivery of components©2018 The Japan Steel Works, LTD. All Rights Reserved.

0.5

0FY2012FY2017

FY202039

Step Up the Search for and Fostering of New Businesses● Search for new businesses in view of major trends⇒Foster and develop businesses in four segments(aircraft, hydrogen, crystal, and deposition system) and an additional segment
New Business Promotion Headquarters
Aircraft

Under the guidance of apartner company, JSW willbuild a factory for aircraftcomponents, make capital
investments and acquirecertification to produce
cladding metal products andmulti-material products at
Muroran. JSW will constructa mass production system
for multi-material products
for commercial aircraft for
which demand is expected
to grow in the future.

Hydrogen

JSW will expand and step up
the hydrogen station
business centered onpressure accumulators andcompressors, incorporating
its own hydrogen-resistantmaterial technologies. JSW
will spread MH tanks basedon hydrogen storing alloytechnologies into thedomains of energy storage
and supply systems and fuelcell applications.

©2018 The Japan Steel Works, LTD. All Rights Reserved.

CrystalThe development of
infrastructure and terminals
ready for the fifth-generation
communication standard (5G)
is gathering pace. The
applications of crystal
materials have expanded in
the areas of opticalcommunication, wirelesscommunication and sensing.
JSW is working to develop
composite substrates for SAW
devices, composite substrates
for optical communicationand gallium nitride (GaN)
crystal substrates matchedwith the aforementioned
applications.

Deposition
systemThe electron cyclotron
resonance (ECR) deposition
system deposits high quality
films such as semiconductor
laser coatings withexpanding applications andprotection layers forelectronic devices. JSW will
work to further expand salesof ECR systems andbroaden the lineup ofdifferent deposition systems
for wafers, including atomic
layer deposition (ALD)
systems and electron beam
evaporation systems.

40

Financial Strategies
Enhance corporate value by strengthening cash-generating ability and utilizing
cash flows effectively.
Returning
to shareholders

FY20207％
ROE ≧ 14％
ROA ≧●Improvement of CCC（Cash Conversion Cycle）●Evaluation of profitability
based on ROIC

Increase operating
income（Target：30％ payout ratio）

Operating Cash Flows

Improvement ofasset efficiency●Implement stable dividends

Effective investment ofmanagement resources【Capital Investment】●Systematic capital investment●Improvement of productivity andexpansion of capacity【R&D Investment】

30

billions of yen

20billions of yen●Strengthening of basic technologies（FY2020）over 30 billions ofyen©2018 The Japan Steel Works, LTD. All Rights Reserved.

Investment in Growth●Fostering of new businesses●Target of operating income
・Improve gross profit
・Enhance productivity
・Cut costs※Consider total-return ratio
in balance with growth investment【Alliance】●M&A, capital alliance, businessalliances, production alliances

20

billions of yen

Creation of new seeds
41

PROJECTION FOR THE FISCAL YEAR ENDING
MARCH 31, 2019©2018 The Japan Steel Works, LTD. All Rights Reserved.

42

Projection for FY2018
Net sales and operating income are forecast to remain at the high levels
attained in the preceding year.
（Unit：Billions of yen）

FY2017（A）

FY2018 forecastFirstfiscal half

SecondFiscal half

Full year（B）

Compared tothe previous
year（B）-（A）

Order received

236.0

110.0

120.0

230.0

△6.0

Net sales
Operatingincome(ratio）
Ordinary
incomeProfit(Loss)

212.9

110.0

110.0

220.0

7.1

21.3
10.0%

10.0
9.1%

12.0
10.9%

22.0
10.0 %

0.7

22.1

10.0

12.0

22.0

△0.1

10.7

8.0

7.0

15.0

4.3

Profit(Loss)per share(yen)145.77108.8695.25

204.11

58.34

Dividends per
share(yen)

37.5

25

25

50

12.5

©2018 The Japan Steel Works, LTD. All Rights Reserved.

43

Forecast for Increase/Decrease in Operating Income for
FY2018Operating income will grow 3% year on year, despite negative factors such as
soaring procurement expenses and investment in increased production.
（Unit：Billions of yen）

21.3

+0.9
Increase/decrease inproduction,sales andprices△0.7
Variable
costs

△0.8
Fixed
costs

+1.7
+0.3
Foreginexchange
loss/gain

△0.7

22.0

Unclassifiablecosts
Disposal of
inventories（steel andenergy products
business）

Average exchange rate in sales at USD
FY2017：JPY110／USD
FY2018：JPY111／USD

FY2017©2018 The Japan Steel Works, LTD. All Rights Reserved.

FY2018
Forecast

44

FY2018：Changes in Categories in Disclosure of Forecast
by Main ProductIndustrial Machinery Products Business

Steel and Energy Products Business

Former disclosure

New disclosure

Former disclosure

New disclosure

categories(～FY2017)

categories(FY2018～)

categories(～FY2017)

categories(FY2018～)

Plastic production and

Plastic production andprocessing machinery
Molding

processing machinery
Molding

Electric and nuclear power

Electric and nuclear powermachines(consolidated)machines(consolidated)
FPD equipment

Other（consolidaated） ※Consolidated group

Other

companies ,etc.

Consolidated groupcompanies,etc.

Pressure vessels for oil
refineries
Clad steel plates and pipes
Wind turbines

Clad steel plates and pipes
Other
Consolidated groupcompanies,etc.

Other
Consolidated group※FPD（Flat Panel Display）equipment(consolidated）：
Laser annealing systems＋Laser applications＋Related services
Products,affiliated companies

Disclosure categories
former⇒new

Laser annealing system

Other ⇒FPD

（including applications）

equipment(consolidated)

JSW

IT

Service Co.

1 affiliated company

Affiliated companies⇒FPD
equipment（consolidated）
Consolidated group companies⇒Other Businesscompanies ,etc.
Products,related companies

former⇒newPressure vessels for oil

Pressure vessels for oil

refineriesrefineries⇒OtherWind turbines

Wind turbines⇒Other Business

3 affiliated companies

Consolidated group companies⇒Other Business

Real Estate and Other Business
Former disclosure

New disclosure

categories(～FY2017)

categories(FY2018～)

Real estate and Other
business©2018 The Japan Steel Works, LTD. All Rights Reserved.

Disclosure categories

Other Business（Real estate will be
non-operating ）45

Projected Orders received,Net sales and Operating income by
Segment for FY2018
The Industrial Machinery Products Business will continue to achieve high performance,
driving profit, and the Steel and Energy Products Business will attain profitability.
（Unit：Billions of yen）

Industrial Machinery Products Business
FY2017※1（A）

Orders received
Net sales
Operatingincome（ratio）

FY2018
Forecast
（B）

185.5
168.9

180.0
170.0

△5.5
1.1

23.7
14.0%

23.5
13.8%

△0.2
-0.2%

※1：excluding 1 affiliated company

Steel and Energy Products Business
FY2017※2（A）
Orders received
Net sales
Operatingincome（ratio）

Compared to theprevious year（B）-（A）

FY2018
Forecast（B）

Compared to theprevious year（B）-（A）

43.0
36.3

45.0
45.0

2.0
8.7

△0.9
-2.5%

0.5
1.1%

1.4
3.5%

※2：excluding wind turbines and 3 affiliated companies©2018 The Japan Steel Works, LTD. All Rights Reserved.

46

Forecast for Industrial Machinery Products for FY2018

Sales of plastic production and processing machinery will compensate for the
decline in sales of defense-related equipment.
（Unit：Billions of yen）

Orders received

Net sales,Operating income
FY2017※（A）

FY2018
Forecast（B）

Compared tothe previous
year（B）-（A）

FY2017※（C）

FY2018
Forecast（D）

Compared tothe previousyear(D）-（C）

Plastic production
and processing
machinery

50.2

61.0

10.8

63.8

67.0

3.2

Molding machines(consolidated)

64.5

65.0

0.5

72.4

67.0

△5.4

FPD equipment（consolidated）

15.1

15.0

△0.1

14.2

17.0

2.8

Other

28.4

18.0

△10.4

22.9

18.0

△4.9

ConsolidatedGroup
companies,etc.

10.7

11.0

0.3

12.2

11.0

△1,2

168.9

170.0

1.1

185.5

180.0

△5.5

23.7

23.5

△0.2

Total

Operating income©2018 The Japan Steel Works, LTD. All Rights Reserved.

※ excluding 1 affiliated company
47

Forecast for Steel and Energy Products Business for FY2018
Net sales,operating income and orders received are expected to increase year
on year due to increased sales in clad steel pipes.

（Unit：Billions of yen）

Net sales,Operating income
FY2017※（A）
Electric andnuclear power

FY2018
Forecast（B）

Orders received

Compared tothe previous
year（B）-（A）

FY2017※（C）

FY2018
Forecast(D）

Compared tothe previousyear（D）-（C）

17.2

16.0

△1.2

13.0

15.0

2.0

Clad steel
plates and
pipes

7.0

13.0

6.0

13.9

15.0

1.1

Other

6.2

10.0

3.8

10.3

9.0

△1.3

ConsolidatedGroup
companies,etc.

5.9

6.0

0.1

5.8

6.0

0.2

Total

36.3

45.0

8.7

43.0

45.0

2.0

Operatingincome

△0.9

0.5

1.4

©2018 The Japan Steel Works, LTD. All Rights Reserved.

※ excluding wind turbines and 3 affiliated companies

48©2018 The Japan Steel Works, LTD. All Rights Reserved.

49©2018 The Japan Steel Works, LTD. All Rights Reserved.

REFERENCE©2018 The Japan Steel Works, LTD. All Rights Reserved.

51

Trends of Net sale, Operating income and Profit（Unit：Billions of yen)
FY2012Net Sales

FY2013

FY2014FY2015FY2016FY2017

220.6

188.7

194.6

223.3

212.4

212.9

Steel and Energy Products Business

88.2

67.6

66.2

74.8

51.2

40.8

Electric and nuclear power

37.4

22.6

27.4

19.2

19.3

17.2

Pressure vessels for oil refineries

4.3

4.1

4.2

1.4

1.7

1

Clad steel plates and pipes

29.3

26.7

16.2

39.3

13.5

7

Wind turbines

1.1

1.7

5.7

1.2

3.9

1.6

Other

12.3

7.2

7

6.9

5.3

5.5

Consolidated Group companies, etc.

3.8

5.3

5.7

6.8

7.5

8.5

130.1

118.3

126.3

144.3

159.3

170.2

Plastic production and processing machinery

37

28.3

32.5

36.4

36.1

50.2

Molding machines(consolidated)

40.9

47

53.6

56.4

57.6

64.5

Other

37.7

31.8

25

32.6

46.8

37

Consolidated Group companies, etc.

14.5

11.2

15.2

18.9

18.8

18.5

2.2

2.7

2

4

1.8

1.7

16.6

8.8

7.5

14.4

12.3

21.3

Steel and Energy Products Business

-0.5

-3.6

-3.9

0.7

-2.8

-1.5

Industrial Machinery Products Business

16.7

12.1

11.3

12.4

15.1

23.8

Real Estate and Other Businesses

0.8

1.1

0.9

2

0.9

0.8

8.2

5.5

-5.3

-16.6

-4.9

10.7

Industrial Machinery Products Business

Real Estate and Other Businesses
Operating Income

Profit©2018 The Japan Steel Works, LTD. All Rights Reserved.

52

Trends of assets situation and cash flow
（Unit：Billions of yen）

FY2012

Total assets

FY2013

FY2014FY2015FY2016FY2017

303.9

293.1

319.6

293.1

275.3

297.4

Steel and Energy Products
Business

120.2

111.5

111.4

60.2

37.5

40.3

Industrial Machinery Products
Business

96.8

99.3

108.4

124.3

123.7

128.1

Real Estate and Other
Businesses

13.3

12.9

13.0

12.0

11.8

11.7

Net assets

134.3

139.2

138.2

111.3

107.5

118.6

Net assets per share (JPY)※Since FY2016,amount is after
reserve split of stocks

359.29372.83368.81

299.41

1,446.44

1,592.47

Equity ratio（％）

43.83

47.09

42.72

37.53

38.6

39.3

ROE（％）

6.35

4.07

-3.88

-13.46-4.6

9.6

Operating cash flow

23.7

11.5

11.5

19.7

12.0

26.7

Investing cash flow

-5.8

-5.7

-2.6

-12.1

-13.5

-5.0

Financial cash flow

-15.2

-15.0

-2.9

4.7

-1.2

-2.4

Cash and cash equivalents at endof period

50.9

42.2

49.1

61.4

58.6

77.8

©2018 The Japan Steel Works, LTD. All Rights Reserved.

53

Corporate Code of Behavior of The Japan Steel Works, Ltd.
(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, andfulfill our social responsibilities with a strong sense of ethics in Japan and overseas as a company that aims to realize asustainable society based on 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 and haveconstructive 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 basedon 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 take theinitiative in solving the problem, investigating the cause and preventing recurrence to fulfill our responsibility.
©2018 The Japan Steel Works, LTD. All Rights Reserved.

54