FY

2018

Business Results for the Six Monthsof the Fiscal Year Ending March 31,2019
November 14,2018
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.
Starting from the fiscal year ending March 31, 2019, the Company modified the disclosure classifications for the
results of the main products and re-totaled the results of the previous year based on these modifiedclassifications, unless otherwise stated.
Accordingly, the totaled figures differ from those in the previous presentation materials.
Unless otherwise noted, “previous forecast values” are those released on May 18, 2018.

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

1

INDEX
０３

Structure and Products of Business Divisions

PART I

Business Results and Projections<Business Results for FY2018 First Halfand Projections for FY2018>
０５
０６
０７
０８
０９
１０

Consolidated Actual Results for FY2018 First Half
Increase/Decrease in Operating Income
Orders received,Net Sales and Operating Income by Segment
Industrial Machinery Products Business

１１
１２
１３

Full Year Projection for FY2018

１４
１５
１６

Forecast for Industrial Machinery Products Business

Steel and Energy Products Business
Capital Investment,Depreciation,Cash Flows,Financial Position
and R&D costs
Forecast for Increase/Decrease in Operating Income
Projected Orders Received,Net Sales and Operating Income by
Segment
Forecast for Steel and Energy Products Business

２４
２５
２６
２７
２８

Business Scale and Growth Potential by Each Products②Enhancement of capacity of Hiroshima Plant③Film and Sheet equipment④Injection Molding Machines
Strengthen After-sales Services－Strengthen customer service using IoT and AI－

２９ Enhancement of the Service Network
３０、３１ ：
Search or and Development of New Businesses－Activities of the New Business Promotion Headquarters－

３２

Plastic Processing Machines－Taking on Challenges for the Future－

Reference（36～39）：
Changes in Disclosure Categories by Main Product
Trend of Net sales,Operating income and Profit
Trends of assets situation and cash flow
Corporate Code of Behavior of JSW (revised on April 1,2018)

Trend and Forecast for Order Backlog

ＰＡＲＴⅡ

Medium-Term Management
Plan“JGP2020”～Progress report～
１８ Corporate Vision for FY2030 and Basic Concept Behind JGP2020
１９ Numerical target for JGP2020
２０ JGP2020： 3 Basic Policies (priority issues)
２１、２２ ：
Optimization of Management Resources and Strengthening ofAlliances ①Steel and Energy Products Business

２３

Expansion of Business Scale of Plastic Processing Machines©2018 The Japan Steel Works, LTD. All Rights Reserved.

2

Structure and Products of Business Divisions
Business
Segments

Steel and Energy Products BusinessIndustrial Machinery Products Business

Product Business
Divisions

Steel Business Division

Machinery Business Division/Injection Molding Machinery Business
Division/FPD System Business Division/Ordnance Business Headquarters

Muroran Plant

Hiroshima Plant

Other
Businesses

Yokohama Plant

Production
Bases【Cast and Forged Steel Products】○Electric and nuclear power
・Parts for reactors（shell,head etc.）
・Parts for steam generators
・Rotor shafts ・Casings ・Other parts for power generation【Plastic Machinery】○Plastic production and processing
machinery・Pelletizers ・Film and sheet equipment
・Compounding twin-screw extruders(TEX・TEK) ・Various services○Molding machines
・Plastic injection
molding machines
・Blow molding machines
・Magnesium alloy injection
molding machines
・Various services[New Business]
・Aircraft

・Hydrogen・Crystal・Thin film
・Advanced
materials

Products

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

Electric powerand steelOil andnatural gas©2018 The Japan Steel Works, LTD. All Rights Reserved.

Naturalenergy【Industrial Machinery】○FPD system
・Laser annealing(ELA) systems
・Various services

Petro-chemicals〇Wind○Other・Defense equipment
・Compressors
・Railway products
・Other industrial machinery

Industrial
Automobiles
machinery

IT

Defenseturbines

New
Business

3

BUSINESS RESULTS AND PROJECTIONSBusiness Results for the FY2018 first half and Projections for FY2018©2018 The Japan Steel Works, LTD. All Rights Reserved.

4

Consolidated Actual Results for FY2018 First Half
Order received was better than year on year, and profit increased due toincreased sales（Unit：Billions of yen）
FY20171H（A）
Ordersreceived

Previous
Forecast（B）

FY2018 1H
After 1Q,
Revisedforecast（C）

Results（Ｄ）

vs FY2017（D）-（A）

vsprevious
forecast（D）-（B）

114.6

110.0

ー

123.7

9.1

13.7

104.4

110.0

113.0

109.6

5.2

-0.4

10.0
9.6%

10.0
9.1%

11.0
9.7%

12.3
11.2%

2.3
1.6%

2.3
2.1%

10.3

10.0

11.0

13.6

3.3

3.6

7.5

8.0

10.0

11.9

4.4

3.9

Profit(Loss)
Per share(yen)103.32108.86136.07162.52

59.2

53.66

Dividends per
share(yen)

17.5

25

ー

25

7.5

0

Net sales
Operatingincome（ratio）
Ordinary
incomeProfit(Loss)©2018 The Japan Steel Works, LTD. All Rights Reserved.

5

Increase/Decrease in Operating Incomer for FY2018 First Half
Operating income increased 23% year on year due to increased production andsales and foreign exchange gain
（Unit：Billions of yen)

+2.0
+10.0

-0.1
Variable
costs

＋0.1

Fixed costs

＋0.9

-0.6

Foreignexchangegain

Unclassifiable
costs,etc.

+12.3

Increase/decreasein production,
sales and prices
Average exchange ratein sales at USD
FY2017 ： ¥107／USD
FY2018 ： ¥111／USD

FY2017
1H
Results©2018 The Japan Steel Works, LTD. All Rights Reserved.

FY20181H
Results6

Orders Received,Net Sales and Operating Income by Segment
for FY2018 First Half

Industrial Machinery Products Business has strong orders received,and Steeland Energy Products Business gains in sales and income.

（Unit：Billions of yen）

Industrial Machinery Products Business
FY2018FY2017
1H Results（A）

Full year
Previous
forecast（B）

1H Results（C）vs FY2017（C）-（A）

Full year
projection
progress（C）÷（B）

Ordersreceived

88.2

180.0

103.7

15.5

58%

Net sales

84.3

170.0

84.9

0.6

50%

Operatingincome（ratio）

11.0
13.0%

23.5
13.8%

11.5
13.5%

0.5
0.5%

49%

Steel and Energy Products Business
FY2018FY2017
1H Results（D）

Full year
Previous
forecast（E）

1H results（F)

vs FY2017（F）-（D）

Full year
projection
progress（F）÷（E）

Ordersreceived

22.7

45.0

16.5

-6.2

37%

Net sales

17.5

45.0

22.1

4.6

49%

Operatingincome（ratio）

-0.3
-1.7%

0.5
1.1%

1.8
8.1%

2.1
9.8%

360%

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

7

Industrial Machinery Products Business for FY2018 First Half
Orders for plastic production and processing machinery and molding machines continued
to be strong. Orders for other equipment increased due to an order received ahead ofschedule.
（Unit：Billions of yen）

Orders received

Net sales・Operating income
FY2017
1H
Results（A）

Plastic
production andprocessing
machinery
Molding
Machines(consolidated)

FY2018Full year
1H
Previous
Results
forecast（C）（B）

Full year
vs FY2017 projection(C) - (A) progress（C）÷（B）

FY2017
1H
Results（D）

FY2018Full year
1H
Previous
Results
forecast（F）（E）

vs FY2017(F) - (D)Full year
projection
progress（F）÷（E）

26.1

61.0

24.4

-1.7

40%

28.6

67.0

33.8

5.2

50%

30.8

65.0

34.5

3.7

53%

34.3

67.0

40.3

6.0

60%

FPD systems(consolidated)

7.6

15.0

8.5

0.9

57%

9.5

17.0

6.1

-3.4

36%

Other

15.1

18.0

11.9

-3.2

66%

9.9

18.0

20.1

10.2

112%

Consolidated
group
companies,etc.

4.7

11.0

5.6

0.9

51%

5.9

11.0

3.4

-2.5

31%

Total

84.3

170.0

84.9

0.6

50%

88.2

180.0

103.7

15.5

58%

Operatingincome

11.0

23.5

11.5

0.5

49%

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

8

Steel and Energy Products Business for FY2018 First Half
Net sales increased because the posting of sales for some clad steel pipes
was moved up from the second half. Overall orders declined.
（Unit：Billions of yen）
Net sales,Operating income
FY2017
1H
Results（A）

FY2018Full year
1H
Previous
Results
forecast（C）（B）

Orders received

Full year
vs FY2017 projection(C) - (A)progress（C）÷（B）

FY2017
1H
Results（D）

FY2018Full year
1H
Previous
Results
forecast（F）（E）

Full year
vs FY2017 projection(F) - (D) progress（F）÷（E）

Electric andnuclear power

8.6

16.0

6.6

-2.0

41%

6.5

15.0

2.8

-3.7

19%

Clad steel
plates and
pipes

4.1

13.0

9.0

4.9

69%

9.7

15.0

7.3

-2.4

49%

Other

2.2

10.0

3.8

1.6

38%

3.9

9.0

3.7

-0.2

41%

Consolidated
group
companies,etc.

2.6

6.0

2.7

0.1

45%

2.6

6.0

2.7

0.1

45%

Total

17.5

45.0

22.1

4.6

49%

22.7

45.0

16.5

-6.2

37%

Operatingincome(loss)

-0.3

0.5

1.8

2.1

360%

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

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

Financial position

Capital investment
14.0

15
11.0
10

Net assets
Net interest-bearing debt

Capital investment and depreciation

20

Depreciation

120

12.8
10.7

7.9

140

0.44

0.44

0.50

0.40

0.40

60

6.4

40
4.4

4.0

5

0.70
0.60

80
7.8

128.1

118.6

116.3

100
9.5

Interest-bearing debt
D/E ratio

51.4

51.1

20

0.30

51.3

0.20

0

0.10

-20
-40

0
FY2014FY2015FY2016FY2017FY2018(forecast)

-60

-20.4

End of Sep.
FY2017FY2017

Cash flows
Operating cash flows

10

21.7
12.9

7.3

9.7
2.4

0
-10
-20

-0.10

FY2018Industrial Machinery Products Business
Steel and Energy Products Business

5.0
14.1

End of Sep.

0.00

R&D costs

Free cash flows

26.7

30
20

Investing cash flows

-35.3

-27.6

4.0

3.8

4.1

4.2

4.2

4.3

FY2014FY2015FY2016FY2017

3.0
2.0

-1.2

End of Sep.
FY2017-5.0

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

1.0

End of Sep.
FY20180.0
FY201310

Full Year Projection for FY2018
Order received,net sales and operating income are forecast to remain at thehigh levels attained in the preceding year
（Unit：Billions of yen）

FY2017
Results（A）

Ordersreceived

FY2018 revised forecast
1H

Full year（B）

2H

vs FY2017（B）-（A）

235.0

123.7

106.3

230.0

-5.0

211.7

109.6

117.4

227.0

15.3

20.5
9.7%

12.3
11.2%

11.7
10.0%

24.0
10.6%

3.5
0.9%

22.1

13.6

11.4

25.0

2.9

10.7

11.9

8.1

20.0

9.3

Profit(Loss)per share(yen)145.77162.52109.63272.15126.38Dividends per
share(yen)

37.5

25

25

50

12.5

Net sales
Operatingincome（ratio）
Ordinary
incomeProfit(Loss)©2018 The Japan Steel Works, LTD. All Rights Reserved.

11

Forecast for Increase/Decrease in Operating Income for FY2018
Operating income is expected to increase by 17% year on year due to increased
production and sales（Unit：Billions of yen）

+3.6
+20.5

-0.5
（-0.7）

Variable
costs
Increase/decreasein production,
sales and prices（＋0.9）

+1.7

-0.7

-0.8

+0.2

（-0.8）（＋0.3）

Fixed costs

Foreignexchange
gain

＋24.0

（-0.7）（＋1.7）
Disposal of
inventories

Unclassifiable
costs,etc.

（steel and energy
products business）

Average exchange rate insales at USD
FY2017：JPY110／USD
FY2018：JPY111／USD※（
FY2017
Results©2018 The Japan Steel Works, LTD. All Rights Reserved.

）…Compared to the previous forecast
FY2018
Revised
Forecast

12

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

Industrial Machinery Products Business
FY2017
Results（A）

Ordersreceived
Net sales
Operatingincome（ratio）（Unit：Billions of yen）

FY2018
Revised forecast
（B）

185.5

180.0

-5.5

168.9

177.0

8.1

23.7
14.0%

24.2
13.7%

0.5
-0.3%

Steel and Energy Products Business
FY2017FY2018Results
Revised forecast（A）（B）
Orders
43.0
45.0
received
Net sales
36.3
45.0
Operating-0.9
2.2
income-2.5%
4.9%（ratio）©2018 The Japan Steel Works, LTD. All Rights Reserved.

vs FY2017（B）-（A）

vs FY2017（B）-（A）
2.0
8.7
3.1
7.4%
13

Forecast for Industrial Machinery Products Business for FY2018
Sales of plastic production and processing machinery will compensate for the
decline in sales of defense equipment.
（Unit：Billions of yen）
Net sales,Operating income
FY2017
Results（A）

FY2018
Revisedforecast（B）

vs FY2017（B）-（A）

Orders received
FY2017
Results（C）

FY2018
Revisedforecast（D）vs FY2017（D）-（C）

Plastic production
and processing
machinery

50.2

63.0

12.8

63.8

63.0

-0.8

Molding Machines(consolidated)

64.5

69.0

4.5

72.4

71.0

-1.4

FPD system(consolidated)

15.1

15.0

-0.1

14.2

14.0

-0.2

Other

28.4

19.0

-9.4

22.9

21.0

-1.9

Consolidated
group
companies,etc.

10.7

11.0

0.3

12.2

11.0

-1.2

168.9

177.0

8.1

185.5

180.0

-5.5

23.7

24.2

0.5

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

14

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）

Orders received

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

FY2018
Revisedforecast（B）

vs FY2017（B）-（A）

FY2017
Results（C）

FY2018
Forecast※（D）vs FY2017（D）-（C）

17.2

14.0

-3.2

13.0

15.0

2.0

Clad steel
plates and
pipes

7.0

15.0

8.0

13.9

15.0

1.1

Other

6.2

10.0

3.8

10.3

9.0

-1.3

Consolidated
group
companies,etc.

5.9

6.0

0.1

5.8

6.0

0.2

36.3

45.0

8.7

43.0

45.0

2.0

Total

Operatingincome-0.9©2018 The Japan Steel Works, LTD. All Rights Reserved.

2.2

3.1

※ Forecast of orders received isn’t revised fromthe beginning of the fiscal year

15

FY2018：Trend and Forecast for Order Backlog
Trends for Order Backlog by Segments

300.0（Unit：Billions of yen）

Steel and Energy Products BusinessIndustrial Machinery Products Business
250.0

Other Businesses

201.8

199.2
200.0

190.9

187.4
1.8

0.6

164.4

0.4

1.2

0.6
150.0

129.1
142.6

161.8

146.0

37.8

44.4

38.1

43.7

FY2016※FY2017※FY2018end of Sep.

FY2018
forecast

125.9

100.0

50.0

69.5
0.0
FY2015※※Except FY2018,the above figures were based on before modified classifications.
©2018 The Japan Steel Works, LTD. All Rights Reserved.

16

MEDIUM-TERM MANAGEMENT PLAN “JGP2020”
Progress report©2018 The Japan Steel Works, LTD. All Rights Reserved.

17

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

18

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.

19

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 cost structure in
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 thin films)
and an additional segment©2018 The Japan Steel Works, LTD. All Rights Reserved.

20

Optimization of Management Resources and Strengthening of Alliances①Steel and Energy Products Business
Topics●Reconstruction of Steel and Energy Products Business

Key measures●Commencement of a study on the establishment of a new company
and the integration of affiliated companies[Purpose of the study]
・Reorganization to create a structure that matches the business scale andestablishment of a consistently profitable operation structure through theacceleration of the profitability improvement reform.
⇒ The study is underway for establishment in October 2019.

Strengthen revenue bases
by reestablishing
the business portfolio●Collaboration in manufacturing field with Tsukishima Kikai Co.,Ltd
・Collaboration in the manufacture of steel infrastructure equipment. The projectis underway according to the plan for the commencement of operation in April 2019.

Rebirth in Steel and Energy
Products Business●Strengthening of the competitiveness of clad steel plates and pipes
・Strengthening of cost competitiveness through the rationalization andconsolidation of facilities⇒ Improve profitability by improving production costs and enhancing productivity.

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

21

Optimization of Management Resources and Strengthening of Alliances①Steel and Energy Products Business
Topics●Strengthen competitiveness of clad steel plates and clad steel pipes- Investment plan for cost improvements -<Future market trends and outlook>▶Clad steel plates/main applications: 60% for parts for varieties of types of oil/gas related equipment▶Clad steel pipes/main applications: Corrosion-resistant pipes for transportation from oil/gas fields
・Demand for energies (LNG) expanded due to a population increase⇒ The production capacity of LNG will not cover demand after 2020. There will be progress in development
mainly in Asia and the Middle East.
Gap between LNG production
capacity and demand

Capital investment will be
gradually increased during theperiod from 2018 to 2021.
(Mainly for a rolling shop)

Demand forecast
Demand-supply gap
Under construction

Improvement plan

In operation

Productivity improvement of 30%
Production cost reductions of more than 20%→ Creation of an operation structure resistant
to load variations
Source: Shell interpretation of IHS Markit, Wood Mackenzie,
FGE, BNEF and Poten & Partners Q4 2017 data
©2018 The Japan Steel Works, LTD. All Rights Reserved.

22

Expansion of Business Scale of Plastic Processing Machines● The global plastics market is forecast to grow 2% to 3% overall every year, like GDP.
● The Company’s plastics-related businesses grew threefold from the level in 2000.
（Billions of yen）

Aim to achieve
further growth150

Growth by 7%●Acquired GM Engineering Co., Ltd. as an affiliate●Acquired SM Platek Co., Ltd (a Korean company)●Took over the film sheet/simultaneous biaxial
stretching machine business from the Hitachi group100●Acquired Meiki Co., Ltd. as a wholly owned subsidiary●Sales strategy to speedily tap
into areas in which high growthis expected or new businesses
will be created.

●Took over the film sheet business from
Mitsubishi Heavy Industries, Ltd.

●Strengthen after-sales
services●Actively M&A and alliance

50

1975

1980
Secondoil crisis

1985

1990
Bubble
boom

1995

2000

Asian
Bubbleburst Monetary crisis©2018 The Japan Steel Works, LTD. All Rights Reserved.

2005
IzanamiBoom

2010
Financialcrisis2015

2018

Abenomics

23

Business scale and growth potential by each products
Growth potential

Film and sheet
equipment※

Pelletizer・
Twin-Screw
Extruders※

Injection molding
machines※

FPD systems※（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.

24

Optimization of Management Resources and Strengthening of Alliances② Enhancement of capacity of Hiroshima Plant
Topics● Commencement of operation at No. 6 & No. 7 assembling plants,

an injection machine service parts center and a complex welfare building(construction completed in October 2018)

Establishment of astructure to increase
production with an eye
on strong demandfor industrial equipment● Production of varieties of types of industrial
equipment

Production capacityin Hiroshima plant
Improvement of over 15%● Expansion of the injection molding machineservice business

Operation started from
November on an as-neededbasis.

No.6 assembling plant

No.7 assembling plant©2018 The Japan Steel Works, LTD. All Rights Reserved.

25

Optimization of Management Resources and Strengthening of Alliances③Film and Sheet equipment
Topics● Demand trends and outlook for separator films for lithium-ion batteries (China, Others)

The market for separators is expected to expand by more than 30% every year, despite a slowdown in China.
◆Chinese market☂（millions of ㎡）

6,000＊Separator films continued to be oversupplied
because production facilities became operativeat the same time in 2016 and 2017.

Global market size of separators for LiB

5,000*Industry consolidation will continue for the time
being.
(Rationalization of the number ofmanufacturers,
which is too high)

4,000

3,000

やじる

2,000

*The market is expected to recover around2019 or 2020.

1,000

0
FY2018FY2019FY2020Estimate
Source: Current status of LiB parts and future outlook in 2018 – Separators
by Yano Research Institute Ltd

Forecast

Forecast

FY2013

FY2014FY2015FY2016FY2017◆Markets other than China (Japan, Korea and Europe) ☀＊Large capital investments will be planned and made in anticipationof the full-scale popularization of EV after 2020.
©2018 The Japan Steel Works, LTD. All Rights Reserved.

With an eye on an increasein demand, JSW will
●expand facilities according to the plan toaddress an increase in production, and●create more competitive products
by stepping up efforts in thedevelopment of new technologies.

26

Optimize Management Resources and Strengthen Alliances④Injection Molding Machines
Solution products based on a mass-customization strategy● Commencement of sales of machines equipped with J’s Drive SystemTM● Magnesium alloy injection machines: Development of large-sized equipment with a clamp
capacity of 1,300 tons

Topics●J’s Drive SystemTM●Magnesium Alloy Injection Molding Machine

Succeeded in the in-house development of a highperformance servo motor
High-speed and high-load injection, a process that had basically been
carried out separately, was made possible with one machine (based on
the EHD specs). Through this technology, JSW succeeded in developing
an injection molding machine that can be used for molding a wide
variety of products.
Previous system

J’s Drive System
In-house
made servo
motor

Externallyprocuredmotor
In-house
made servo
amplifierIn-house
madecontroller

In-house
made servo
amplifierIn-house
madecontroller

Given the tendency of making vehicles lighter, applications
and demand are expected to expand, replacing metal parts.
Currently 280 to 850 tons →Development of a machine with 1,300-ton clamp capacity.
（After January 2019）▶ Addressing requirements for large-sized components suchas different types of metal parts for instrument panels.
▶ Considering the development of machines with a clamp
capacity of 2,000 to 3,000 tons in the future.
⇒ Entering the automobile industry in earnest

Multiple-hour pressure maintenance

Belt Drive（Drive）

Direct Drive（Drive）

Specs for maintainingpressure for long-hours
EHD specs

Standard specs

Specs forhigh-speed operation

Thinning and filling
Newly developed servo motor©2018 The Japan Steel Works, LTD. All Rights Reserved.

Magnesium Alloy Injection Molding Machine with a
850-ton clamp capacity ＜JLM850MG2e＞

27

Strengthen After-sales Services – strengthen customer service using IoT and AI –JSW IoT Solution【NET100】
Production management
and analysis
Management andmonitoring of operations【Production Manager】【Remote Maintenance】～Example: Conversion of a molding plant into a smart factory ～

サービス・
予知保全

生産
管理

Management of
information on molding
processes
Automated preparationof management reports＜SYSCOM5000i preinstalled＞

Maintenance timing is
informed based on thenumber of shots and load
levels.

【Predictive Maintenance】

JSW Worldwide IoT Solutions of Enhancement

The life of ball screws ispredicted
Reduction of downtime

成形
支援

生産自動化
システム
: JSW Worldwide IoT Solutions of Enhancement【AI Molding Navigator】
Prevention of defective
molding【Predictive maintenanceof ball screws】＜SYSCOM5000i preinstalled＞【Molding conditions
support software】
Calculation of molding
processes and initial
molding conditions andguidance on
countermeasures fordefective molding

Reduction of downtime
Reduction of maintenancecosts【Team Network】
Labor-saving throughcollaboration of molding
machines and peripheraldevices

Apply to different types of industrial machines©2018 The Japan Steel Works, LTD. All Rights Reserved.

28

Strengthen After-sales Services－ Enhancement of the service network －● Strengthen foundations of service structure focusing on Industrial Machinery Products Business⇒

Generate stable profit and increase customer satisfaction● Build strong customer base through service business⇒

Lay foundations for next businesses

Increase after-sales service bases for injection molding machines

Reconsidering theconsolidationof bases in the US
Establishment of JSW
Injection Molding Machine
Service Parts Center(Operation commenced
in Nov. 2018)
Establishment of JSW
Injection Molding Machine
Europe Service Parts Center(Operation to commencein Jan. 2019)

Sales of Service Business（Index：FY2012=1)
2.5
2
1.5
1

● Newly established facilities● Existing bases

0.5
0FY2012©2018 The Japan Steel Works, LTD. All Rights Reserved.

FY2017

FY202029

Search for and Development of New Businesses– Activities of the New Business Promotion Headquarters－
Search for new business in major trends ⇒Foster and develop business in four segments(Aircraft, Hydrogen, Crystal, Thin films) and additional segment▶Advanced Materials Business Promotion Office（Since Oct.1,2018）
Drive efforts to develop businesses for functional materials such as CFRP and powder alloy,
manufacturing equipment of functional materials and systems.

▶Aircraft Business Promotion OfficeAcquired JIS Q 9100 : 2016, a certificate of approval for quality management systems foraviation, space and defense (acquisition date: Oct.12, 2018).
Scope : Honeycomb core processing of aircrafts’ moving surfaces

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

30

Search for and Development of New Businesses– Activities of the New Business Promotion Headquarters－▶Hydrogen Business Promotion Office〇For Hydrogen Station※：Steel Pressure Vessel for Hydrogen Storage

Hydrogen Station

Please refer to P40.
Steel Pressure Vessel for
Hydrogen Storage▶JSW’ｓ features:
・Steel pressure vessel featuring the longest life
and a low cost
・Domestic market share of 75% in 2018

Development of a steel pressure
vessel featuring a lower cost and longlife is underway.
Sales will start within FY2018.
Pressure vessel underdevelopment©2018 The Japan Steel Works, LTD. All Rights Reserved.

Source: A scenario for the penetration of FCV and hydrogen stations
Fuel Cell Commercialization Conference of Japan (Mar. 11, 2016)

Expecting to expand businesses on the back of
the popularization of fuel cell vehicles (FCV).

※Hydrogen station is a facility to supply hydrogento fuel cell vehicles

31

Plastic Processing Machines - Taking on Challenges for the Future Topics

1995● Plastic Recycling

2000- Past results and initiatives for the future -

2005

2010

2015

2018

2025

RecycleBiodegradable plastic

Conversion of waste
plastics to fuelPET bottle recycling

Used paper recycling

Emission Reduction
Micro cellular foam extruder,Molding machine,
Bio plastic machine
Manufacturing facilities ofthin films

Compounding twinscrew extruders

Challenges for the future～Product development for low
environmental loads～

Micro cellular foam
injection molding machine●Development of technologies for replacements forplastics●Development of technologies to improve productproperties with nanocomposite materials

Injection Molding Machine
Film and Sheet Machine©2018 The Japan Steel Works, LTD. All Rights Reserved.

Magnesium Alloy Injection Molding Machine32©2018 The Japan Steel Works, LTD. All Rights Reserved.

33

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

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

35

FY2018：Changes in Disclosure Categories 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

Clad steel plates and pipes
Wind turbines

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）

companies ,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

Consolidated group companies⇒Other Business

Other Business⇒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 ）36

Trend of Net sales,Operating Income and Profit
FY2012Net Sales

FY2013

FY2014※From FY2018, based on modified disclosure classifications※Before FY2018,”Other Businesses” includes real estate

FY2015FY2016FY2018(forecast)

FY2017

220.6

188.7

194.6

223.3

212.4

212.9

227.0

Industrial Machinery Products
Business

130.1

118.3

126.3

144.3

159.3

170.2

177.0

Plastic production andprocessing machinery

37.0

28.3

32.5

36.4

36.1

50.2

63.0

Molding
machines(consolidated)

40.9

47.0

53.6

56.4

57.6

64.5

69.0

-

-

-

-

-

-

15.0

Other

37.7

31.8

25.0

32.6

46.8

37.0

19.0

Consolidated groupcompanies,etc.

14.5

11.2

15.2

18.9

18.8

18.5

11.0

Steel and Energy Products Business

88.2

67.6

66.2

74.8

51.2

40.8

45.0

Electric and nuclear power

37.4

22.6

27.4

19.2

19.3

17.2

14.0

Pressure vessels for oil
refineries

4.3

4.1

4.2

1.4

1.7

1.0

-

Clad steel plates and pipes

29.3

26.7

16.2

39.3

13.5

7.0

15.0

Wind turbines

1.1

1.7

5.7

1.2

3.9

1.6

-

Other

12.3

7.2

7.0

6.9

5.3

5.5

10.0

Consolidated groupcompanies,etc.

3.8

5.3

5.7

6.8

7.5

8.5

6.0

2.2

2.7

2.0

4.0

1.8

1.7

5.0

16.6

8.8

7.5

14.4

12.3

21.3

24.0

Industrial Machinery Products
Business

16.7

12.1

11.3

12.4

15.1

23.8

24.2

Steel and Energy Products Business

-0.5

-3.6

-3.9

0.7

-2.8

-1.5

2.2

Other Businesses

0.8

1.1

0.9

2.0

0.9

0.8

0.2

8.2

5.5

-5.3

-16.6

-4.9

10.7

20.0

FPD equipment（consolidated)

Other Businesses
Operating Income

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

37

Trends of Assets Situation and Cash Flow ※Before FY2018,”Other Businesses” includes real estate
FY2012
Total assets

FY2013

FY2014FY2015FY2016FY2017FY2018(forecast)

303.9

293.1

319.6

293.1

275.3

297.4

307.5

Industrial Machinery
Products Business

96.8

99.3

108.4

124.3

123.7

128.1

-

Steel and Energy Products
Business

120.2

111.5

111.4

60.2

37.5

40.3

-

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

128.1

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

359.29372.83368.81

299.41

1,446.44

1,592.47

1,726.15

Equity ratio（％）

43.83

47.09

42.72

37.53

38.6

39.3

41.3

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

7.3

Investing cash flow

-5.8

-5.7

-2.6

-12.1

-13.5

-5.0

2.4

Financial cash flow

-15.2

-15.0

-2.9

4.7

-1.2

-2.4

-1.8

Cash and cash equivalents at
end of period

50.9

42.2

49.1

61.4

58.6

77.8

85.8

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

38

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

39

For reference： Scenario for the penetration of FCV and hydrogen stations
Scenario for the penetration of FCV and hydrogen stations
Number of FCV in use/number of hydrogenstations installed

Initial stage of penetration【Start period】

Full-scale penetration（Year)【Expansion period】

16 million

Development of infrastructure: Start to build the infrastructure in the four metropolitan
areas, expand it to areas connected to them and establish it nationwide.
Initiatives to establish the viabilityof stations (reduction of station
costs and review of regulations)Aggressive scenario
based on significant
technological progress

Initiatives to expand thepenetration of FCV (enhancementof the appeal of FCV, cost
reductions and efforts to increase
vehicle types)

8 million

Target for the independent operationof stations
Expansion of the
independent
operation of stations

0.65 million,
Start of sales of FCV

Installation in
720 locations

6 million
3 million,
Installation
nationwide

Base scenario

Source: A scenario for the penetration of FCV and hydrogen stations
Fuel Cell Commercialization Conference of Japan (Mar. 11, 2016) / translated by JSW©2018 The Japan Steel Works, LTD. All Rights Reserved.

40