Sanyo Special Steel Co., Ltd.
IR Briefing Regarding the Business Results for the FY2022 3Q
Q&A Summary

Date: Wednesday, February 1st, 2023
Speaker : Kozo Takahashi, Director, Member of the Board and Managing Executive Officer
Takashi Yatsunami, Managing Executive Officer* Please be noted that the actual Q&A session was in Japanese and this English
translation is prepared for reference purpose only.
----------------------------------------------------------------------------------------Q．Could you tell us the actual numbers of transient factors included in ordinary income of OVAKO forevery quarter and the forecast for FY22/4Q ?
A．The amount of transient factors was 2.1 billion yen in FY22/1Q, 1.4 billion yen in 2Q and 1.9 billion
yen in 3Q, in total, 5.4 billion yen in FY22/1Q-3Q. Transient factors are not included in the forecast
for FY22/4Q.
Q．Compared to the forecast of 22 billion yen in ordinary income for FY2022, ordinary income for
Apr.-Dec. was 20.7 billion and progress is 94%. Does this mean you have a conservative view for
4Q? If the actual performance for the full year is better than forecast, is it possible to raise thedividend amount?
A．With regards to the forecast for FY22/4Q, we are taking a conservative view of sales volume forboth Sanyo and OVAKO. In addition, we assume no positive transient factors and include somerisk of margin deterioration in OVAKO due to negative market conditions. The dividend amountwill be determined based on the actual results for FY2022.
Q．Could you tell us the development of price increase and applying surcharge mechanism at Sanyo,
on non-consolidated basis, and OVAKO? Also, what do you consider of its progress?
A．Sanyo has successfully amended the surcharge system with more appropriate iron scrap priceindex and more frequent application term, in addition to applying surcharge mechanism to moretypes of alloys. Furthermore, almost all customers accepted the application of energy surcharges
or quasi-energy surcharge mechanism for energy costs that were not previously surcharged.
OVAKO introduced an energy surcharge in April 2022 to cover rising energy costs, in addition toiron scrap and alloy surcharge. OVAKO has introduced climate surcharge to all customers
unanimously since January 2022 as well. Currently, initiatives are underway to implement sales
price increases in response to inflation.
Q．The sales volume of OVAKO is forecasted to decrease from 3Q to 4Q in FY2022, while weconsider that Jan.-Mar. has vever been lower than Oct.-Dec. in the past. What is your perspective
on sales volume for this 4Q? Is there any concern that the market share is declining?
A．The sales volume in FY22/4Q is estimated at 45,000 tons per month based on the assumption of
decline in orders, but we expect orders to have bottomed out at present. Although the market isundergoing significant changes, such as the disruption of the European market due to the lack ofincoming Russian materials and the increase in sales price due to rising energy costs, we willcontinue to implement appropriate measures regarding sales price and volume while keeping aclose eye on the market situation.

Q．Could you tell us the reason why Sanyo’s margin is expected to worsen in FY22/4Q compared to3Q?
A．Forecast for FY22/4Q incudes impact of time lag of energy surcharge. Energy prices are expected
to rise further in 4Q but it will take 6-9 months to pass on the increasing energy costs to the sales
prices.
Q．Please tell us about the risk of declining sales volume for Sanyo in FY22/4Q?
A．We consider auto production will probably still take some time to recover, although the shortage ofsemiconductors has been resolving. On the other hand, destocking for construction and industrial
machineries are not expected to be significant, as demands for large construction machineries,
machine tools and robots are resilient. Therefore, the risk of a significant decline of sales volumes
from FY22/4Q forecast will be probably low.
Q．Could you tell us about the impact of time lag of energy surcharge on profit and loss in FY2023?
A．We will examine the impact in our FY2023 budget. If the level of energy costs at the end of FY2022
continues, impact of increasing energy costs incurred during FY2022 will be reflected in the profit
and loss in FY2023 with a certain time lag.
Q．Are there any signs of recovery in sales volume of Sanyo in FY22/4Q on non-consolidated basis?
A．From current order situation, it is hard to say that sales volume are recovering, but we believe thatsales volume will bottom out in FY22/4Q.

This document does not constitute an offer or invitation to subscribe for or purchase any
securities and nothing contained herein shall form the basis of any contract or commitment
whatsoever. This document is being furnished to you solely for your information and may not
be reproduced or redistributed to any other person. No warranty is given as to the accuracy
or completeness of the information contained herein. Investors and prospective investors insecurities of any issuer mentioned herein are required to make their own independent
investigation and appraisal of the business and financial condition of such company and thenature of the securities. Any decision to purchase securities in the context of a proposedoffering, if any, should be made solely on the basis of information contained in an offering
circular published in relation to such an offering. By participating in this document, you agree
to be bound by the foregoing limitations. This document contains statements that constituteforward looking statements. These statements appear in a number of places in thisdocument and include statements regarding the intent, belief or current expectations of
Sanyo Special Steel Co., Ltd. or its officers with respect to its financial condition and resultsof operations, including, without limitation, future loan loss provisions and financial support tocertain borrowers. Such forward looking statements are not guarantees of future
performance and involve risks and uncertainties, and actual results may differ from those insuch forward looking statements as a result of various factors. The information contained inthis document, is subject to change, including but not limited, to change of economicconditions, financial market conditions, and change of legislation / government directives.
Any statements in this document, other than those of historical facts, are forward-looking
statements about future performance of Sanyo Special Steel Co., Ltd. and its groupcompanies, which are based on management’s assumptions and beliefs in light ofinformation currently available, and involve risks and uncertainties. Actual results may differmaterially from these forecasts.