FY

2019 / JGP2019
Business Results for the First Half of the
Fiscal Year 2019 (Ending March 31,2020)
November 15, 2019
The Japan Steel Works,LTD.
Naotaka Miyauchi, Representative Director & President©2019 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 the informationthat 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 varietyof reasons.
Unless otherwise noted, values of “previous forecast” means those released on May 17, 2019.

©2019 The Japan Steel Works, LTD. All Rights Reserved.

1

INDEXPART I

Results for the First Half of FY2019
05
06
07
08
09
10

Results of Orders Received, Net Sales and Income
Results of Increase/Decrease in Operating Income
Results by Segments
Results in Industrial Machinery Products BusinessResults in Steel and Energy Products Business
Capital Investment, Depreciation, Cash Flows, Financial Position
and R&D costs

PART Ⅱ

Forecast for FY2019
12
13
14
15
16
17

Forecast of Orders Received, Net Sales and Income
Forecast of Increase/Decrease in Operating Income
Forecast by Segments
Forecast in Industrial Machinery Products Business
Forecast in Steel and Energy Products Business
Trends of Order Backlog

27 (i)-2 Strengthening of Alliances :Plastic Processing Machine
28 (i)-3 Strengthening of Alliances :M&A in Film and Sheet Manufacturing Equipment Business
29 (ii)-1 Strengthening After-sales Services :Increase in Sales Ratio
30 (ii)-2 Strengthening After-sales Services :Key Items
31 (iii)-1 Exploration and Development of New Businesses :Initiatives in the Six Fields
32 (iii)-2 Exploration and Development of New Businesses :Reorganization of Business Base in Crystal Business

Reference (35-38) :Change in Classification of Major ProductsTrends of Net Sales, Operating Income and Profit
Trends of Situation in Assets and Cash Flow
Corporate Code of Behavior of JSW (revised on April 1,2018)

PART Ⅲ

Medium-Term Management Plan
“JGP2020”
19
20
21
22
23
24
25
26

“JGP2020” and Corporate Vision for FY2030
Three Basic Policies (Priority Issues) in “JGP2020”
Revision of Numerical Targets in “JGP2020”
Conditions of Major Products in Industrial Machinery BusinessBusiness Overview : Film and Sheet Manufacturing Equipment
Business Overview : Pelletizers
Business Overview : Magnesium Injection Molding Machines(i)-1 Optimization of Management Resources :Initiatives for “Rebirth" in Steel and Energy Business©2019 The Japan Steel Works, LTD. All Rights Reserved.

2

Composition of Business Segments and Major Products
Business
Segments

Steel and Energy Products BusinessIndustrial Machinery Products Business

Other
Businesses

Business
Divisions

Steel BD

Machinery BD / Injection Molding Machinery BD /FPD System BD / Ordnance Business HQ

New Business
Promotion HQ

Muroran Plant

Hiroshima Plant

Yokohama Plant

Production
Bases[Steel castings and forgings]○Electric and nuclear power
・Parts for reactors（shell, head etc.）
・Parts for steam generators
・Rotor shafts ・Casings ・Other parts for power generation[Plastic Related Machinery]○Plastic production and processing
machinery・Pelletizers
・Film and sheet manufacturing equipment
・Twin-screw extruders (TEX・TEK)
・After-sales services○Molding machines
・Plastic injection
molding machines
・Blow molding machines
・Magnesium alloy injection
molding machines
・After-sales services

New
Business・Aircraft

・Hydrogen・Crystal・Thin film
・Advanced

Products

Markets○Others
・Pressure vessels for oil refineries ・Die Steel・Steel rolls for steel manufacturing
・After-sales services ・Other types of steel forgings[Clad Steel Products]○Clad steel plates and pipes

Electric Powerand SteelOil andNatural Gas©2019 The Japan Steel Works, LTD. All Rights Reserved.

NaturalEnergymaterials
・Metallic[Industrial Machinery]○FPD system
・Laser annealing (ELA) systems
・After-sales services

Petro-chemicals

materials○Others
・Defense equipment
・Compressors
・Railway products
・Other industrial machinery

Industrial
Automobiles
Machinery

IT

DefenseNew
Business

3

RESULTS FOR THE FIRST HALF OF
THE FISCAL YEAR 2019 (ENDING MARCH 31, 2020)
PART I©2019The Japan Steel Works, LTD. All Rights Reserved.

4

Results of Orders Received, Net Sales and Income
Orders received, operating income and orders received decreased year on year.
(Unit: 0.1 Billion yen)

FY2018FY2019First Half
Result（A）

Full year
Previous forecast(B)

First Half
Result(C)

Compared to theprevious year

Progress toward
the previous
forecast（C）-（A）(C) ÷ (B)

Orders received

1,237

2,350

1,128

-109

48.0%

Net sales

1,096

2,250

1,062

-34

47.2%

Operating income（ratio）

123

190

111

-12

58.4%

11.2%

8.4%

10.5%

-0.8%

-

Ordinary income

136

200

121

-15

60.5%

Profit(Loss)

119

140

52

-67

37.1%

Profit(Loss)
Per share(yen)162.52190.5070.82

109.17

37.2%

Dividends per
share(yen)

25.0

55.0

27.5

2.5

50.0%

©2019 The Japan Steel Works, LTD. All Rights Reserved.

5

Results of Increase/Decrease in Operating Income
Operating income decreased due to decrease in production, sales and prices.
(Unit: 0.1Billion yen)

123

△5
Increase/decreasein production,
sales and prices

5
Variablecosts△7

Fixed costs△4△1

Foreignexchange
gain/loss

111

Unclassifiable
costs, etc.

Average exchange ratein sales at USD

FY2018First Half
Result©2019 The Japan Steel Works, LTD. All Rights Reserved.

FY2018 ：JPY111/USD

FY2019 ：JPY107/USD

FY2019First Half
Result6

Results by Segments
Operating income decreased in both segments.
Orders received increased in Steel and Energy Products Business.
Industrial Machinery Products
Business(Unit: 0.1 (Unit:
BillionBillion
yen)
yen)

FY2018FY2019Full year
Previous forecast(B)

First Half
Result（A）

Compared to theprevious year

First Half
Result(C)（C）-（A）

Progress toward
the previous
forecast(C) ÷ (B)

Orders Received

1,037

1,900

865

-172

45.5%

Net Sales

849

1,800

872

23

48.4%

Operating Income

115

200

107

-8

53.5%

13.5%

11.1%

12.3%

-1.3%

-

（ratio）

Steel and Energy Products
Business
FY2018FY2019Full year
Previous forecast(E)First Half
Result（D）

Compared to theprevious year

First Half
Result(F)（F）-（D）

Progress toward theprevious forecast(F) ÷ (E)

Orders Received

165

400

242

77

60.5%

Net Sales

221

400

166

-55

41.5%

Operating Income

18

20

14

-4

70.0%

（ratio）

8.1%

5.0%

8.4%

0.3%

-

©2019 The Japan Steel Works, LTD. All Rights Reserved.

7

Results in Industrial Machinery Products Business
Orders received decreased significantly year-on-year due to downturn in themarket condition of molding machines.

(Unit: 0.1 Billion yen)Orders Received

Net Sales and Operating Income
FY2018FY2019Compared Progressto thetoward theFirst Half previous
previous
Resultyear
forecast（C）(C)-(A)(C)÷(B)

Compared Progressto thetoward theFirst Half previous
previous
Resultyear
forecast(F)(F)-(D)(F)÷(E)

Full year
Previous
forecast
（E）

338

670

319

-19

47.6%

403

650

291

-112

44.8%

61

150

39

-22

26.0%

41.3%

201

280

121

-80

43.2%

28

60.0%

34

150

95

61

63.3%

872

23

48.4%

1,037

1,900

865

-172

45.5%

107

-8

53.5%

Full year
Previous
forecast
（B）

244

620

296

52

47.7%

345

650

345

0

53.1%

FPD equipment(consolidated)

85

150

48

-37

32.0%

Other products

119

240

99

-20

Consolidated
subsidiaries,
etc.

56

140

84

Total

849

1,800

Operatingincome115

200©2019 The Japan Steel Works, LTD. All Rights Reserved.

FY2019First Half
Result（D)

First Half
Result（A)
Plastic
production andprocessing
machinery
Molding
machines(consolidated)

FY20188Results in Steel and Energy Products Business
Sales decreased and orders received increased year-on-year.

Orders Received

Net Sales and Operating Income
FY2018FY2019Compared Progressto the toward theFirst Half previous previous
Resultyear
forecast(C)(C)-(A)(C)÷(B)First Half
Result(A)

Full year
Previous
Forecast(B)

Steel castings andforgings

104

170

108

4

Clad steel plates
and pipes

90

160

29

Consolidated
subsidiaries, etc.

27

70

221

18

Total

Operating income(Unit: 0.1 Billion yen)

FY2018FY2019Compared Progressto the toward theFirst Half previous previous
year
forecast
Result(F)-(D)(F)÷(E)(F)

First Half
Result(D)

Full year
Previous
Forecast
(E)

63.5%

65

180

120

55

66.7%

-61

18.1%

73

150

93

20

62.0%

29

2

41.4%

27

70

29

2

41.4%

400

166

-55

41.5%

165

400

242

77

60.5%

20

14

-4

70.0%

©2019 The Japan Steel Works, LTD. All Rights Reserved.

9Capital Investment, Depreciation, Cash Flows, Financial Position
and R&D costs(Unit: 0.1 Billion yen)
Financial position
Capital investment and depreciation
200
Capital Investment

Depreciation

140

150

1,600

New assets

Interest-bearing debt

Net interst-bearing debt

D/E ratio

0.60

1,353

1,298

1,281
1,200

120

107

99

95

100

78

64

0.40
528

515

513

0.40

0.39

400

54

44

40

50

0.40

800

0.20

0
0

△ 400
FY2015FY2016FY2017FY2018△ 353
FY2018FY2019(forecast)

Operating cash flows

Investing cash flows

73

24
0

11
△2

FY2018End of Sep.
©2019 The Japan Steel Works, LTD. All Rights Reserved.

42

42

42

FY2014FY2015FY2016FY2017

45

30
20

△ 13
△ 52

FY2018

42

40

18

△ 100

End of Sep.

Industrial Machinery Products Business
Steel and Energy Products Business
New BusinessFree cash flows

70

97

FY2019R&D costs

50
100

0.00

△ 228

FY2018End of Sep.

Cash flows
200

△ 228

FY2019End of Sep.

100
FY2018

10

FORECAST FOR THE FISCAL YEAR 2019
(ENDING MARCH 31, 2020)
PART II©2019 The Japan Steel Works, LTD. All Rights Reserved.

11

Forecast of Orders Received, Net Sales and Income
Both orders received and net sales are expected to increase year-on-year.
(Unit: 0.1 Billion yen)

FY2019FY2018Result(A)

First Half
ResultSecond Half
Forecast

Full Year
Forecast(B)Compared to theprevious year(B)-(A)

Orders Received

2,161

1,128

1,172

2,300

139

Net Sales

2,201

1,062

1,188

2,250

49

242

111

79

190

-52

11.0%

10.5%

6.6%

8.4%

-2.6%

Ordinary income

279

121

79

200

-79

Profit(Loss)

199

52

58

110

-89

Profit(Loss)per share (yen)271.69

70.82

79.00

149.65(122.04)

Dividends per
share(yen)

55.0

27.5

27.5

55.0

0.0

Operating income（ratio）©2019 The Japan Steel Works, LTD. All Rights Reserved.

12Forecast of Increase/Decrease in Operating Income
Operating income is expected to decrease due to decrease in production,
sales, and prices, as well as increase in fixed costs.

242（Unit: 0.1 Billion yen）

△32

13

△19
△6

(△35)

(+7)

Increase/decrea
se in production,
sales and prices

Variablecosts(△ 16)(△ 2)

Fixed costs

Foreignexchange
gain/loss

△8

190

(△ 6)
Undistributable
costs, etc.

Average exchange ratein sales at USD
FY2018 ： JPY111/USD
FY2019 ： JPY108/USD

FY2018Result

FY2019Forecast※( ) is the previous forecast©2019 The Japan Steel Works, LTD. All Rights Reserved.

13

Forecast by Segments
Net sales and orders received are expected to increase in both segments.
In particular, orders for steel products will be strong.
(Unit: 0.1 Billion yen)

Industrial Machinery Products Business
FY2018Result(A)FY2019Forecast(B)Compared to the previous(B)-(A)

Orders Received

1,757

1,800

43

Net Sales

1,736

1,750

14

Operating income

235

200

-35

13.5%

11.4%

-2.1%

(Ratio)Steel and Energy Products Business
FY2018Result(C)FY2019Forecast(D)Compared to the previous(D)-(C)

Orders received

341

450

109

Net Sales

412

450

38

Operating income

26

20

-6

6.3%

4.4%

-1.9%

(Ratio)©2019 The Japan Steel Works, LTD. All Rights Reserved.

14

Forecast in Industrial Machinery Products Business
Orders received in total is expected to increase, covering the decline inmolding machines with other products.
(Unit: 0.1 Billion yen)Orders Received

Net Sales and Operating Income
FY2018Result(A)

FY2019Forecast(B)

Compared tothe previous(B)-(A)FY2018Result(C)

FY2019Forecast(D)

Compared tothe previous(D)-(C)

Plastic production
and processing
machinery

525

610

85

593

650

57

Molding machine(Consolidated)

727

660

-67

706

630

-76

FPD Equipment(Consolidated)

164

110

-54

60

120

60

Other Products

204

220

16

281

250

-31

Consolidated
subsidiaries, etc.

116

150

34

117

150

33

1,736

1,750

14

1,757

1,800

43

235

200

-35

Total

Operating Income©2019 The Japan Steel Works, LTD. All Rights Reserved.

15

Forecast in Steel and Energy Products Business
Orders received are expected to increase significantly year-on-year.
(Unit: 0.1 Billion yen)

Net Sales and Operating Income
FY2018Result(A)

FY2019Forecast(B)

Orders Received

Compared to theprevious(B)-(A)FY2018Result(C)

FY2019Forecast(D)

Compared to theprevious(D)-(C)

Steel castings andforgings

220

230

10

151

210

59

Clad steel plates
and pipes

130

160

30

126

180

54

Consolidated
subsidiaries, etc.

62

60

-2

64

60

-4

Total

412

450

38

341

450

109

Operating income

26

20

-6

©2019 The Japan Steel Works, LTD. All Rights Reserved.

16

Trends of Order Backlog

Trends of Order Backlog by Segments(Unit: 0.1 Billion yen)

3,000

Steel and Energy

2,000

1,878

Industrial Machinery

1,835

Other Bsinesses

1,902

1,888

1,444

1,452

1,644

1,430
1,000

1,259

1,451

378

437

365

442

416

FY2016FY2017FY2018FY2019FY2019end of Sep.

forecast0©2019 The Japan Steel Works, LTD. All Rights Reserved.

17

MEDIUM-TERM MANAGEMENT PLAN “JGP2020”
AND BUSINESS OVERVIEWPART III©2019 The Japan Steel Works, LTD. All Rights Reserved.

18

Mid-Term Management Plan “JGP2020” and Corporate Vision for FY2030

Developing Foundations for Growth
JGP2020 To establish the ground to realize our growth

FY2030in the “Next 10 Years”
JGP2020
Industrial Machinery Products Business
Steel and Energy Products Business

JGP2017

Apr. 2019
Absorption mergerof Nikko
Information
System Co.

Apr. 2019
Acquisition of
GM Engineering
Co.

Nov. 2019
Acquisition of
Nichiyu Machinery
Co. , Ltd.

2018～2020
Investment for greater production capacity
at Hiroshima plant

Expansion of theexisting businessRestructuring of the
production system“Aggressive Management”
Sowing and nurturing of seeds
for expansion of our business fields
Securing profitability in the current scale
Exploration of the new opportunities
Apr. 2019
Cooperation with
Tsukishima Kikai Co.
2018～2021©2019 The Japan Steel Works, LTD. All Rights Reserved.

Jul. 2019
Establishment of
Muroran Copper
Alloy, Co.

New business,
M&A

2020
Absorption merger
with Meiki Co.
(Plan)

Expansion of the businessscalesFosteringnew businessContinuous profit making
from the existing business
Apr. 2020
Establishment of new company
and integration of subsidiaries(Plan)

Investment for clad steel business

19

JGP2020：3 Basic Policies (priority issues)

JGP2020 ～Developing foundation for 2030～◆ ”Growth” in Industrial Machinery Products Business,“Rebirth in Steel and Energy Products Business

I.

Optimization of Management Resources and Strengthening of Alliances
Optimization through rearrangement of the resources⇒ Active investment for industry machinery product business,
Rebuild of cost structure in the steel and energy products business that suits the current sales scale
Expansion of the businesses through alliance and M&A⇒ Breaking free of adherence toward self-sufficient policies

II. Strengthening after-sales services (stock-based business)
Enhancement of service force mainly in industrial machinery⇒ Securing stable profitability, improvement of customer satisfaction
Strengthening customer relationship through service business⇒ Development of foundations for the next businessIII. Increase exploration and fostering of new businesses
Exploration of new businesses from the view point of mega trends
Fostering and commercialization in the 4 fields (aircrafts, hydrogen, crystals and thin films) + α©2019 The Japan Steel Works, LTD. All Rights Reserved.

20

Revision of Numerical Targets in “JGP2020”
The Whole JSW

Industrial machinery Products business

Consolidated
Sales

235

Consolidated
Operating Income

Billion yen

21

Billion yen

Consolidated
Sales

185 Billion yen

Operating
Income21 Billion yen

Steel and Energy Products Business(ROA 5 %)(ROE 11 %)Consolidated
Sales

42 Billion yen

Operating
Income2.5 Billion yen

After 2021, following the basic strategy of JGP2020, we are going to formulate
the next mid-term management plan and proceed with its measures.

©2019 The Japan Steel Works, LTD. All Rights Reserved.

21

Conditions of Major Products in Industrial Machinery BusinessIndustrial machinery
business

Previous
Prospects(May.2019)

Current
Prospects

Market Conditions

Film and sheet
manufacturing
equipment

Market in Japan and Korea will be brisk.
Market in China is bottoming out and increasein orders is expected.

Pelletizer

Increase in orders is expected due to brisk
market conditions mainly in China and other
Asian countries.

Twin-screw extruders

Increase in orders for medium- and largesized machines is expected for the highperformance resins used for 5G, EV.

FPD Equipment

While market for smartphones is recovering,
the FPD equipment market is still severe. We
await for recovery due to 5G and 8K TVs.

Molding machine

Downturn in Market conditions began insecond half of FY2018. The situation is still
uncertain.

©2019 The Japan Steel Works, LTD. All Rights Reserved.

22

JGP2020 Overview of Film and Sheet Manufacturing Equipment

Trend of wet process battery separator film
manufacturing equipment market

Market Conditions for battery
separator film equipment

Indexation by using the value for FY2016 as 1

2.00

1 Japan and South Korea
Demand for films for in-vehicle applications (highend products) remains steady.

1.50

We have solidified our position as the top-ranking
manufacturer.

2 China

1.00

The oversupply of equipment is being eliminatedas a result of market rationalization through M&As.
Orders for equipment
Conditions remain flat in FY2019.
Moderate increases are expected in FY2020
and beyond.

0.50

0.00
2016

2017

2018

2019

2020

2021

2022

2023

(Year)

Forecast by
JSW©2019 The Japan Steel Works, LTD. All Rights Reserved.

23

JGP2020 Overview of Pelletizer Business
Market size by region
CIS

Americas

China

Asia

MiddleEast

AfricaEuropeIndexation by using the value for
FY2016 as 1

Market conditions for pelletizers

2.50

The market size is expected to increase twofoldfrom the level in FY2016.

2.00
1.50
1.00

China and Asian countries will continue to show
strong performance.

0.50
0.00
2016

2017

2018

Priority investment regions
according to China’s 13th FiveYear Plan

2019

2020

2021

(FY)

* Graphs for the period from FY2016 to FY2018 reflect
actual results. Those for the period from FY2019 toFY2021 show forecasts.

The 13th Five-Year Plan has been driving growth indemand in China.

Liaoning Province
Hebei Province

Seven petrochemicalbases in China

In terms of the supply-demand balance, equipment
shortages (production) are extremely serious in
China.

Asian countries will continue to show strong
performance going forward, because new andexisting facilities have been constructed or
expanded mainly for exporting equipment to China.

Jiangsu Province
Shanghai City
Zhejiang Province* The 13th Five-Year Plan
The official policy of the Chinese government for the five-year period
from 2016 until 2020.

Fujian Province
Guangdong Province©2019 The Japan Steel Works, LTD. All Rights Reserved.

24

JGP2020 Overview of Magnesium Injection Molding Machine BusinessRespond to demand for large-sized equipment in consideration of increasingneeds in the automotive industry.
Commenced the sale of a large-sized magnesium injection molding machine with clamping capacity of 1,300
tons in June 2019. The development of a larger-sized molding machine is underway.
Sales of magnesium injection
molding machines
Indexation by using the value for FY2016 as 1
2016年度を1.00とした場合の指数500ﾄﾝ以上のサイズの受注台数比率

Magnesium injection molding machine withclamping capacity of 1,300 tons
(JLM1300MG2eL)

Ratio of orders in units for machineswith capacities greater than 500 tons

2.00

100%
92%

92%

87%

90%

1.50
81%
80%
1.00
70%

0.50
60%

Casings for large-sized head-up display units(Approx. 500 mm x 400 mm x 200 mm）
0.00
2016

2017

2018

(FY)

2019

* Graphs for the period from FY2016 toFY2018 reflect actual results. Those for
FY2019 show forecasts.

©2019 The Japan Steel Works, LTD. All Rights Reserved.

50%

Contribute to enhancements in the environmental performance ofautomobiles through weight reductions and improvements in heat-releasing
characteristics with respect to head-up display components, etc.

25

(i)-1 Optimization of Management Resources :Initiatives for “Rebirth" in Steel and Energy Business
Strengthening earning base through reorganization of business portfolio

RebirthSteel Castings andForgings
Reorganize product portfolio
and expand product line up.

For reorganization of theentire group in steel andenergy products business,
new company is to beestablished.
(Scheduled in April 2019)

Engineering
Services
Establish the third pillar in thefield of plant, infrastructure,
construction, maintenance,
testing and inspection services

Clad Steel Plates
and Pipes
With investment for production
efficiency, further strengthen
our "strong products" that are
expected to grow.

©2019 The Japan Steel Works, LTD. All Rights Reserved.

26

(i) - 2 Strengthening of Alliance – Plastic Processing Machines

Further expand the plastic processing machine complex.
①
Acquired abusiness from
Mitsubishi Heavy
Industries, Ltd.

Pelletizer④

Twin screw
extruderProvide added value
to basic materials

Produce basic
plastic materials

Cutting/coolingequipment

FeederVibrating filter
dryer

Gear pumpSpinning
extruderNon-oriented
filmSequentially oriented
film equipment

Simultaneously
oriented film
equipment

Sheetequipment

Profile/blowing
extruding machine

Sheet molding
machineWinderRoll temperature
controller

Inflation film
equipment

CalendarSlitter

Extrusion
laminate⑦
Acquired Nichiyu
MachineryCo., Ltd.

⑥
Acquired GM
Engineering Co., Ltd

Screenchanger

Materials
transportationequipment

Into molded
items

Polymer Polymerization reactor(Petrochemical plant)

1,500

Into films

Converted SM Platek(Korea) into a subsidiary③
Acquired a businessfrom Hitachi Plant
Mechanics

Film sheet manufacturing
equipment

Biaxialdecelerator⑤
Acquired Meiki Co., Ltd.

Injector molding
machineMolding die

Blow molding
machineMolding dietemperature
controller

Unloadingrobot②
Acquired Tahara
Machinery Co, Ltd.

Injection blow
Stretch blow

Trend in sales of plastics manufacturing machines
Molding
成形機
machine

1,000

Subsidiaries related to
成形機関連会社
molding machines

Plastic production
樹脂製造・加工and processing
machinery⑤④③

Subsidiaries related to plastic
樹脂製造・加工関連会社
production and processing
machinery

⑥

⑦

②
①

500

0

1975

1980

1985

©2019 The Japan Steel Works, LTD. All Rights Reserved.

1990

1995

2000

2005

2010

2015

2020

27

(i) - 3 Strengthening of Alliance –M&A Related to Film Sheet Manufacturing Equipment Business
Acquired Nichiyu Machinery Co., Ltd., a manufacturer specializing in winders.
Further strengthened the capability to offer the entire range of film sheet manufacturing
equipment.
Improved product appeal by comprehensively optimizing the development and control processes ofequipment
Expanded business opportunities through the manufacture and sale of standalone units of winding
equipment

Twin screw rotary winder
Conceptual image of film sheet manufacturing equipment

Twin screw turret winder©2019 The Japan Steel Works, LTD. All Rights Reserved.

28

(ii) - 1 Strengthening of After-Sales Services –Aiming to Increase Sales Ratio
Increase the sales ratio of after-sales services in the industrial machinery
business to at least 30%.
Ratio of after-sales services to industrial machinery sales

Approx.

20％

30
Actual result in
FY2018©2019 The Japan Steel Works, LTD. All Rights Reserved.

％ or higher

Medium- to longterm target

29

(ii) - 2 Strengthening of After-Sales Services – Priority Items
Strengthen

Outline of the after-sales service business
Description of services

Production strategy
Inventory strategy

Geographical strategy

Sale of consumables and spare parts●●

Periodic maintenance(Overhaul)●

Remodeling with the latest technology

●

●

●

Technical consultation

●

●

●

Comprehensive maintenance contract●●

Solution

For pelletizers
AmountConceptual image of after-sales services for pelletizer

Motor

Cylinder and screws

Remodeling work

Screenchanger

Decelerator

Periodical maintenance work
Motor

Parts for periodical replacement
Consumables for replacement through the year
Cutting device©2019 The Japan Steel Works, LTD. All Rights Reserved.

3 yrs 5 yrs

10 yrs

15 yrs

20 yrs

25 yrs

30 yrsNumber ofyears ofuse

30

(iii) - 1 Exploration and Development of New Businesses
We have established promotion offices to tap into six areas and are in the process offacilitating the commercialization of their products.
Crystal Business
Promotion Office

Metallic Materials
Business
Promotion Office

Aircraft Business
Promotion Office

Advanced
Materials Business
Promotion OfficeHydrogen
Business
Promotion Office

Fine Crystal Co.,Ltd.

JSW Muroran

JSW Muroran

JSW Hiroshima

JSW MuroranFilm-forming equipment
such as ECR filmforming equipment and
ALD equipment

Development andprocessing of artificial
crystals and lithium
niobate crystals

Manufacture of copper
alloys and other different
types of new metalmaterials

Semiconductors
and electronic
devices

Cameras, 5G
and sensing

Electronic partsand metal
materials

Thin Film Business
Promotion Office

JSW Afty Co.,Ltd.

Manufacture ofcomponents andmaterials for privately
operated aircraft using
CFRP composite
materials, among othermaterials

Manufacture of organic
composite materials forautomotive and battery
applications

Aircraftequipment andparts

Automobiles andbatteries

Manufacture of highly
durable hydrogenpressure
vessels/storage tanks

HydrogenenergyNew materials
Mobility

Telecommunications & 5G

Environment & Energy

Megatrends
Increase in population and change in structure
Progress of urbanization

Progress of technologies

Climate change andresource shortages

We will contribute to providing solutions to future social issues with an eye on the megatrends.
We will contribute to the sustainable growth of society and achieve the sustainable enhancement ofcorporate value.
©2019 The Japan Steel Works, LTD. All Rights Reserved.

31

(iii) - 2 Exploration of New Businesses – Restructuring of Bases in the Crystal
Business
Contribute to the development of telecommunications with a focus on the manufacture of two
mainstay products: crystals and LN crystals.
Improve the three manufacturing bases in Muroran, Iwaki and China’s Zhejiang Province to address new demand.

Fine Crystal Co., Ltd.
Head office: Muroran, Hokkaido
Established: August 1980
(Wholly owned by JSW）

Manufacture ofartificial crystals
Applications
Optical low-pass filters for
digital cameras
Sensors
Crystaloscillators

Alliance

Head office: Iwaki Fukushima
Established: August 2017
(Wholly owned by JSW)

Accelerate the development andcommercialization of crystal
products that support 5G bycomprehensively leveraging thestrengths of three companies

JMF(Zhejiang) Opto-ElectronicCo., Ltd (Haining)
Head office: Haining, China
Established: April 2019
（JSW: 48％, FCC: 1％)
Chinese-Foreign Equity Joint Venture©2019 The Japan Steel Works, LTD. All Rights Reserved.

Manufacture of lithium niobate(LN) crystals
Applications
Optical low-pass filter for
digital cameras
Circuit boardsfor opticalmodulators

SAW
filtersetc...

Fine Crystal Iwaki Co., Ltd.

Commence of full-scale crystal processing
business is planned in January 2020.

Development crystal
composite materials

Sensorsetc...

32

©2019 The Japan Steel Works, LTD. All Rights Reserved.

REFERENCES©2019 The Japan Steel Works, LTD. All Rights Reserved.

34

Change of disclosure categories for financial results of main products

Materials and Energy Business

Old disclosure category（-FY2018）

New disclosure category（FY2019 -）Electric power and nuclear
power

Steel castings and forgings

Clad steel plates and pipes

Clad steel plates and pipes

Other products

Steel castings and forgings

Consolidated subsidiaries, etc.

Consolidated subsidiaries, etc.

©2019 The Japan Steel Works, LTD. All Rights Reserved.

35

Trends of Net Sales, Operating Income and Profit（Unit: 0.1 Billion yen）

FY2013
Net Sales

FY2014FY2015FY2016FY2017FY2018FY2019(Forecast)

1,887

1,946

2,233

2,124

2,129

2,201

2,250

1,183

1,263

1,443

1,593

1,702

1,736

1,750

Plastic production and processing
machinery

283

325

364

361

502

525

610

Molding machine (consolidated)

470

536

564

576

645

727

660

FPD equipment (consolidated)

-

-

-

-

-

164

110

Other products

318

250

326

468

370

204

220

Consolidated subsidiaries, etc.

112

152

189

188

185

116

150

Materials and Energy Business

676

662

748

512

408

412

450

Steel castings and forgings

-

-

-

-

-

-

230

Electric power and nuclear power

226

274

192

193

172

125

-

Pressure vessel for oil refineries

41

42

14

17

10

-

-

Clad steel plates and pipes

267

162

393

135

70

130

160

Wind turbine

17

57

12

39

16

-

-

Other products

72

70

69

53

55

95

-

Consolidated company

53

57

68

75

85

62

60

Other businesses

27

20

40

18

17

52

50

88

75

144

123

213

242

190

Industrial Machinery Products Business

121

113

124

151

238

235

200

Steel and Energy Products Business

-36

-39

7

-28

-15

26

20

Other Businesses

11

9

20

9

8

3

-30

199

36110

Industrial machinery business

Operating income©2019 The Japan Steel Works, LTD. All Rights Reserved.

Profit

55

-53

-166

-49

107

Trends of Situation in Assets and Cash Flow
（Unit: 0.1 Billion yen）

FY2013
Total assets

FY2014FY2015FY2016FY2017FY2018FY2019First Half

2,931

3,196

2,931

2,753

2,974

3,055

3,015

Industrial Machinery
Products Business

993

1,084

1,243

1,237

1,281

1,500

-

Steel and Energy Products
Business

1,115

1,114

602

375

403

393

-

Other Businesses

129

130

120

118

117

146

-

Net assets

1,392

1,382

1,113

1,075

1,186

1,298

1,353

Net Assets per Share (yen)※Since FY2016, amount is after
reserve split of stocks

372.83368.81

299.41

1,446.44

1,592.47

1,746.91

1,817.04

Equity Ratio (%)

47.09

42.72

37.53

38.61

39.36

42.04

44.30

Return on Equity (%)

4.07

-3.88

-13.46

-4.59

9.59

16.27

-

Operating Cash Flow

115

115

197

120

267

11

70

Investing Cash Flow

-57

-26

-121

-135

-50

-13

-52

Financial Cash Flow

-150

-29

47

-12

-24

-37

-17

Cash and cash equivalents at
End of the Period

422

491

614

586

778

738

749

©2019 The Japan Steel Works, LTD. All Rights Reserved.

37

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, and fulfill our social
responsibilities with a strong sense of ethics in Japan and overseas as a company that aims to realize a sustainable society based on thefollowing 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 takethe initiative in solving the problem, investigating the cause and preventing recurrence to fulfill our responsibility.
©2019 The Japan Steel Works, LTD. All Rights Reserved.

38