JFE Holdings’ Financial Results for Fiscal Year 2019
ended March 31, 2020
— All financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS) —(Note: The following is an English translation of an original Japanese document)

May 12, 2020
JFE Holdings, Inc.
Tokyo and Nagoya stock exchanges
5411
www.jfe-holdings.co.jp/en
Koji Kakigi, President and CEO
Hidetsugu Tawara, Manager, Public Relations Section
Investor Relations and Corporate Communications
Department+81-3-3597-3842
June 19, 2020
June 19, 2020
Yes
Yes
(Figures are rounded down to the nearest million yen)

Official name:
Listings:
Code:
English URL:
Representative:
Contact:

Phone:
Annual shareholders meeting (planned):
Dividend payment starting date:
Scheduled date to submit securities report:
Preparation of supplementary materials on results:
Results briefing:

1. Consolidated Results for Fiscal 2019 (April 1, 2019 to March 31, 2020)(1) Consolidated Operating Results (cumulative total)(Percentages indicate year on year change)

Revenue

Business
profit%(million yen)

Profitbefore tax%(million yen)

Profit%(million yen)(million yen)

Profitattributableto ownersof parent%

Comprehensive
income

%

%

(yen)

FY 2019

3,729,717(3.7)

37,899(83.7)

213,473-(193,290)-(197,744)

FY 2018

3,873,662

6.8

232,070

6.3

209,31336.9

169,825

64.6

163,509

Basic earnings per
share

Diluted earnings per
share

(yen)

(yen)

Profit ratio to equity
attributable toowners of parent- (259,172)
67.5-

126,378

1.8

Profit before tax ratio
to total assets

Business profit ratio
to revenue

(%)

(%)

(%)

FY 2019(343.39)(343.39)(11.1)(4.6)

1.0

FY 2018

283.81283.76

8.6

4.6

6.0

(Reference): Equity in earnings of affiliates:

FY 2019: 8,782 million yen

FY 2018: 42,685 million yen

Note: Business profit is profit before tax excluding financial income and one-time items of a materially significant value.
(2) Consolidated Financial Position
Total assets

Total equity(million yen)(million yen)

Equity attributable toowners of parent(million yen)

Total equity
attributable toowners of parent

Equity attributable toowners of parent per
share

(%)

(yen)

FY 2019

4,646,120

1,706,552

1,627,026

35.0

2,825.50

FY 2018

4,709,201

1,991,759

1,926,337

40.9

3,345.22

Cash and cash
equivalents at end ofyear(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities(million yen)(million yen)(million yen)(million yen)

FY 2019261.070(358,378)

103,900

86,704

FY 2018

268,251(313,351)

51,88282,288

2. Dividends
Dividend per share (yen)End on 1stquarter

AnnualInterimEnd on 3rdquarterYearend

Total dividend
payoutDividend
payout ratio(million yen)(consolidated, %)Dividend ratio of
equity attributableto owners ofparent(consolidated %)FY 2018

95.00

-

45.00

-

50.00

54,78133.5

2.9

FY 2019

20.00

-

20.00

-

0.00

11,532-

0.6

FY 2020(forecast)

-

-

-

-

-

-

Note: Fiscal 2020 dividends are yet to be determined.

3. Forecasts of Consolidated Financial Results in Fiscal 2020 (April 1, 2020 to March 31, 2021)
Forecasts of consolidated financial results for the full fiscal year ending in March 2021 are not provided herein because thecompany has determined that it is not possible to calculate reasonable financial forecasts at this time. The reasons for thisare described in "1. Qualitative Information (4) Outlook for Fiscal 2020" on page 3 of the attached document.

Notes1. Changes in significant subsidiaries during the term (changes in designated subsidiaries resulting in changes in consolidated
structure): No
2. Changes in accounting policies and accounting estimates
1) Changes in the accounting policies required by IFRS: Yes
2) Changes in the accounting policies other than 1) above: No
3) Changes in accounting estimates: No
For details, see "Change in Accounting Policies” under “(5) Notes to Consolidated Financial Statements" on Page 12 of
the attachments.
3. Number of outstanding shares (common stock)
1) Outstanding shares at the end of the term (including treasury stock)
As of March 31, 2020: 614,438,399 shares
As of March 31, 2019: 614,438,399 shares
2) Treasury stock at the end of the term
As of March 31, 2020: 38,601,655 shares
As of March 31, 2019: 38,590,471 shares
3) Average number of shares during the term
FY 2019: 575,854,137 shares
FY 2018: 576,117,212 sharesThis report is not subject to auditing by a certified public accountant or an audit corporation.
Explanation of Appropriate Use of Results Forecasts, and Other Matters of Note
1. Forecasts and other forward-looking statements herein are based on information available on the date of publication of thisdocument as well as rational assumptions that we have made regarding certain factors. Actual results may vary significantly fromthese forecasts due to a wide range of circumstances. For a description of the results forecasts, see "1. Qualitative Information(4) Outlook for Fiscal 2020" on Page 3 of the attachments.
2. The supplementary financial data will be published on our website.

Attachments
1. Qualitative Information(1) Overview of Business Results(2) Overview of Financial Position(3) Overview of Cash Flow in Fiscal 2019(4) Outlook for Fiscal 2020
2. Basic Rationale for Selection of Accounting Standards
3. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income(3) Consolidated Statement of Changes in Equity(4) Consolidated Statement of Cash Flow
(5) Notes to Consolidated Financial Statements
Notes pertaining to the presumption of a going concern
Change in accounting policies
Segment information
Per-share information
Material subsequent events
4. Supplementary Information

1

2
2
3
3
3
3
4
4
6
8
10
12
12
12
13
15
15
16

1. Qualitative Information(1) Overview of Business Results
JFE Holdings, Inc., guided by its corporate mission of contributing to society with world-leading technology, continued
to achieve sustainable growth and improved corporate value for shareholders and other stakeholders.
The Japanese economy recovered moderately in the first half of fiscal 2019, but exports and production graduallybegan to decline in the second fiscal half. Economic conditions overseas were weak, particularly in Asia and Europe,
amid global trade friction due to protectionism. Additionally, the impact of the COVID-19 outbreak depressed economic
conditions substantially and persistently both in Japan and overseas.
Under the circumstances, JFE carried out key measures set out in its sixth medium-term business plan: pursue
growth through leading-edge technologies, expand the profit base and strengthen manufacturing capabilities in Japan,
advance overseas business and expand the overseas profit base, and strengthen business structure overall forsustainable growth. However, the operating environment was unprecedented and extremely challenging—steel demand
slumped primarily in the manufacturing sector due to U.S.–China trade tensions, iron ore prices increased as a result ofChina’s growing crude steel output, and prices for materials, logistics and other commodities and services all rose.
Consequently, business profit declined substantially from the previous fiscal year. We also recognized impairment
losses associated with the restructuring of JFE Steel Corporation’s East Japan Works, which were undertaken in
response to structural demand changes envisioned in the medium and long terms and the need for considerable
investments to renew aging domestic facilities and equipment. Profit attributable to owners of the parent company also
fell sharply from the previous fiscal year to end in the red.
Operating results by segment are presented below.
Steel business: Despite overcoming blast-furnace operating problems that had occurred in the previous fiscal year,
the steel business was impacted by declining demand both in Japan and overseas as a result of the global economic
slowdown and the spread of the COVID-19 in March. Consolidated annual crude steel production was 28.09 million
tons, a slight increase from the previous fiscal year. Revenue contracted to 2,681.3 billion yen owing to falling prices
overseas and declining sales volumes due to trade friction. Despite continued efforts to raise steel sales prices andimprove earnings, our steel business recorded a segment loss of 8.7 billion yen. Costs were driven up substantially interms of iron ore prices and materials, logistics and other costs. Additional factors included weakened sales prices
overseas and a one-time reduction of profits due to an unrealized gain on inventories.
Engineering business: Revenue increased to 512.2 billion yen as a result of smoothly executed existing orders forenvironmental, energy and infrastructure building projects in Japan and overseas. Also, efforts to expand operating
businesses were effective. Segment profit increased to 23.1 billion yen as revenue grew.
Trading business: Revenue fell to 1,084.1 billion yen owing to weakened demand in all regions as the impact of trade
frictions from around the middle of the fiscal year was felt worldwide, beyond just the United States and China. Segment
profit fell to 27.0 billion yen. Revenue declined and earnings at group companies both in Japan and abroad shrank due
to declines in steel prices up to the fiscal yearend.
Our equity-method affiliate Japan Marine United Corporation recorded an equity-method loss of 17.9 billion yen due towork process delays resulting from bad weather, natural disasters, etc. as well as increases in materials and equipment
costs and business restructuring.
Revenue of 3,729.7 billion yen and business income 37.8 billion yen both were down on a consolidated basis
including earnings of the parent. JFE recorded a loss before tax of 213.4 billion yen and a loss attributable to owners of
the parent company of 197.7 billion yen, reflecting impairment losses from the restructuring of JFE Steel Corporation’s
East Japan Works and other factors.
Note: Business income is profit before tax excluding financial income and one-time items of a materially significant
value. It is a benchmark indicator of the company’s consolidated earnings. The operating performance of eachsegment is presented in terms of segment profit, a measure including financial income in business profit.

2(2) Overview of Financial Position
Total assets at the end of fiscal 2019 (March 31, 2020) fell 63.1 billion yen from the previous fiscal yearend to 4,646.1
billion yen, mainly owing to declines in trade and other receivables. Total liabilities were up 222.1 billion yen from theprevious yearend to 2,939.5 billion yen, mainly due to an increase in bonds payable and the recognition of leaseliabilities in accordance with the adoption of the IFRS 16 standard. Total equity fell 285.2 billion yen from the previous
yearend to 1,706.5 billion yen, mainly owing to a decline in retained earnings(3) Overview of Cash Flow in Fiscal 2019
Net cash due to the operating loss came to 261.0 billion yen. Net cash used in investing activities was 358.3 billion
yen, largely for the purchase of property, plant and equipment, intangible assets, and investment property. Aggregate
free cash flow thus came to an outflow of 97.3 billion yen.
Net cash provided by financing activities was 103.9 billion yen, primarily reflecting long-term borrowings.
Interest-bearing liabilities outstanding at fiscal yearend rose 290.5 billion yen to 1,814.3 billion yen. The balance of cash
and cash equivalents rose 4.5 billion yen to 86.7 billion yen.
Note: Interest-bearing liabilities are bonds payable, borrowings, and lease obligations.

(4) Outlook for Fiscal 2020
Steel business: The impact of COVID-19 in Japan has forced companies to suspend certain operations, even in therelatively solid automotive field, and also has further weakened demand in shipbuilding, construction & industrial
machinery, and building construction, with no sign yet of bottoming out. Overseas, national economies are slowing due
to COVID-19 and demand for steel products is falling. In response to the large and rapid drop in demand, JFE SteelCorporation shut down blast furnace No. 4 at its West Japan Works (Kurashiki District) at the end of April andcommenced work on a refit. The company has also started preparing for the banking of the West Japan Works(Fukuyama District) No. 4 blast furnace by the end of June. It is difficult to forecast crude steel production volumes forfiscal 2020 given the lack of clarity on demand trends in customer industries including automobiles. We will continue tomonitor demand trends in these industries closely and respond flexibly to significant changes.
Due to unprecedented uncertainties and considering the severity of the operating environment, we will implement
cash-flow measures in addition to temporarily shutting down two blast furnaces. The measures will include rigorous cost
reduction mainly by cutting fixed costs, such as for repairs, emergency labor-reduction measures, extra stringent
screening of investments, substantial reduction of inventories, and sales of assets.
Engineering business: Demand related to energy liberalization and infrastructure-construction projects remains solidin Japan. Overseas, we anticipate increases in steel-structure business in South Asia and waste-to-energy power
generation demand in Europe. Nevertheless, concerns remain in regard to the rising impact of COVID-19, including theinterruption or postponement of construction work currently underway and revisions in the timing or postponement oforders.
Trading business: We are working to strengthen our supply chain in priority areas, such as electrical steel sheets forelectric vehicles and high-efficiency transformers, but the outlook is unclear due to expectations of a slower global
economy and declines in demand both in Japan and overseas owing to COVID-19.
Given this environment, our consolidated financial results forecasts for fiscal 2020 remain pending because of
uncertainties surrounding COVID-19, which make it impossible to form reasonable demand estimates, particularly in thesteel business, at this point in time.
JFE, viewing this as the greatest challenge since the company’s establishment, is determined to overcome the crisis
by carefully analyzing the situation and then implementing all possible measures.

2. Basic Rationale for Selection of Accounting Standards
JFE voluntarily adopted IFRS starting with full-year results for the fiscal year that ended on March 31, 2019. The JFEGroup does business globally, so by adopting IFRS it aims to improve the international comparability of its financial
statements in capital markets and improve group management through standardized accounting methods.

33. Consolidated Financial Statements(1) Consolidated statement of financial position(million yen)
As ofMarch 31, 2020

As ofMarch 31, 2019
AssetsCurrent assets
Cash and cash equivalents

82,28886,704

Trade and other receivables

754,679

678,098

Contract assets

124,039

142,075

Inventories

917,812872,602

Income taxes receivable

19,076

20,946

Other financial assets

4,471

6,307

Other current assets

86,290108,410

Total current assets

1,988,658

1,915,146

1,835,229

1,717,751

Goodwill

4,445

6,497

Intangible assets

82,56788,802Right-of-use asset-

102,32259,42558,158315,064

336,040

16,38015,520Non-current assets
Property, plant and equipment

Investment property
Investments accounted forusing equity method
Retirement benefit asset
Deferred tax assets

36,60994,930

Other financial assets

360,133

296,004

Other non-current assets

10,686

14,946

Total non-current assets

2,720,543

2,730,974

4,709,201

4,646,120

Total assets

4

As ofMarch 31, 2019

As ofMarch 31, 2020

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds payable, borrowings,
and lease obligations
Contract liabilities

584,939557,252

329,400

376,473

59,06044,813

Income taxes payable, etc.

16,39913,249Provisions

14,336

12,507

Other financial liabilities

99,09789,465

Other current liabilities

222,705

210,543

Total current liabilities

1,325,938

1,304,306

1,194,478

1,437,835

133,999

143,316

Provisions

30,43825,740

Deferred tax liabilities

3, 5503,723

Non-current liabilities
Bonds payable, borrowings,
and lease obligations
Retirement benefit liability

Other financial liabilities

17,140

16,246

Other non-current liabilities

11,895

8,398

Total non-current liabilities

1,391,503

1,635,261

2,717,442

2,939,568

Share capital

147,143

147,143

Capital surplus

646,793652,430

Retained earnings

1,241,420

1,002,076

Treasury shares(180,670)(180,637)

Total liabilities
EquityOther components of equity
Equity attributable to owners ofparentNon-controlling interests

71,6506,012

1,926,337

1,627,026

65,422

79,526

Total equity

1,991,759

1,706,552

4,709,201

4,646,120

Total liabilities and equity5(2) Consolidated statement of profit or loss and consolidated statement of comprehensive income
Consolidated statement of profit or loss
Fiscal 2018
(April 1, 2018 –March 31, 2019)(million yen)
Fiscal 2019
(April 1, 2019 –March 31, 2020)

Revenue

3,873,662

3,729,717

Cost of sales(3,328,475)(3,334,103)

Gross profit

545,186

395,614Selling, general and administrative expenses
Share of profit of entities accounted for using
equity method
Other income(357,323)(356,992)

42,685

8,782

30,87730,818Other expenses(29,355)(40,323)

Business profit

232,070

37,899Impairment losses(10,252)(238,826)

Operating profit

221,818(200,927)

Finance income

2,083

2,727

Finance costs(14,588)(15,273)

Profit (loss) before tax

209,313(213,473)

Income tax expense(39,488)

20,183

Profit (loss)

169,825(193,290)

163,509(197,744)

6,315

4,454

169,825(193,290)

Basic earnings (losses) per share (yen)283.81(343.39)

Diluted earnings (losses) per share (yen)283.76(343.39)

Profit (loss) attributable to
Owners of parent
Non-controlling interests
ProfitBasic earnings per share6Consolidated statement of comprehensive income(million yen)
Fiscal 2019
(April 1, 2019 –March 31, 2020)

Fiscal 2018
(April 1, 2018 –March 31, 2019)
Profit (loss)

169,825(193,290)(4,270)(4,975)(23,091)(49,143)

(430)

3,148

(27,793)(50,971)(4,445)(3,080)

(383)

(44)

(10,824)(11,786)(15,653)(14,911)(43,446)(65,882)

126,378(259,172)

120,693(263,243)

Non-controlling interests

5,685

4,070

Comprehensive income

126,378(259,172)

Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
Net change in fair value of equity instruments
designated as measured at fair value throughother comprehensive income
Share of other comprehensive income ofinvestments accounted for using equity method
Total of items that will not be reclassified to profit
or loss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Effective portion of cash flow hedges
Share of other comprehensive income ofinvestments accounted for using equity method
Total of items that may be reclassified to profit orloss
Total other comprehensive income
Comprehensive income

Comprehensive income attributable to
Owners of parent

7

(3) Consolidated statement of changes in equity
Fiscal 2018 (April 1, 2018 – March 31, 2019)(million yen)
Equity attributable to owners of parent
Other components of equity
Net change infair value ofequityinstruments
Remeasurements
designated asof defined benefit
measured at
plans
fair value
through othercomprehensive
incomeCapitalsurplusRetainedearnings

Treasuryshares147,143646,634

1,138,091(179,070)－

113,073

Profit (loss)－－

163,509－－－

Other comprehensive income

－

－

－

－

(4,630)(23,108)

Share capital

Balance as of April 1, 2018

Comprehensive income－－

163,509－(4,630)(23,108)

Purchase of treasury shares

－

－

－

(1,627)－－

Disposal of treasury shares

－

(16)

－

27

－

－

Dividends－－(54,784)－－－

Share-based payment transactions

－

170

－

－

－

－

Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings

－

4

－

－

－

－

－

－

(5,396)

－

4,630

766

Transfer to non-financial assets

－

－

－

－

－

－

Other

－

－

－

－

－

－

Total transactions with owners
Balance as of March 31, 2019－

158

(60,181)(1,600)

4,630

766

147,143646,793

1,241,420(180,670)－

90,730Equity attributable to owners of parent
Other components of equity
Exchangedifferences on
Effective
translation of portion of cash
foreignflow hedges
operations
Balance as of April 1, 2018

Noncontrollinginterests

Total

Total equity

Total(1,805)(1,359)109,907

1,862,707

59,357

1,922,065－－－

163,509

6,315

169,825

Other comprehensive income(14,742)(334)(42,816)(42,816)(630)(43,446)

Comprehensive income(14,742)(334)(42,816)

120,693

5,685

126,378

ProfitPurchase of treasury shares

－

－

－

(1,627)－(1,627)

Disposal of treasury shares

－

－

－

10

－

10

Dividends－－－(54,784)(1,972)(56,756)

Share-based payment transactions

－

－

－

170

－

170

Changes in ownership interest in
subsidiaries
Transfer from other components of equity
to retained earnings

－

－

－

4

(4)

－

－

－

5,396

－

－

－

Transfer to non-financial assets

－

(838)

(838)

(838)

－

(838)

Other

－

－

－

－

2,356

2,356

－

(838)

4,558

(57,064)379(56,684)(16,547)(2,532)

71,6501,926,337

65,422

1,991,759

Total transactions with owners
Balance as of March 31, 20198

Fiscal 2019 (April 1, 2019 – March 31, 2020)(million yen)
Equity attributable to owners of parent
Other components of equity

CapitalsurplusRetainedearnings

Treasuryshares147,143646,793

1,241,420(180,670)－

90,730－－(1,302)－－－

Share capital

Balance as of April 1, 2019
Cumulative effects of changes in accounting
policies

Net change infair value ofequityinstruments
Remeasurements
designated asof defined benefit
measured at
plans
fair value
through othercomprehensive
income147,143646,793

1,240,117(180,670)－

90,730

Profit (loss)－－(197,744)－－－

Other comprehensive income

－

－

－

－

(4,765)(46,129)

Comprehensive income－－(197,744)－(4,765)(46,129)

Purchase of treasury shares

－

－

－

(73)

－

－

Disposal of treasury shares

－

(12)

－

17

－

－

Retroactively adjusted balance

Dividends－－(40,363)－－－

Share-based payment transactions

－

(34)

－

88

－

－

Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings

－

5,684

－

－

－

－

－

－

67

－

4,765

(4,832)

Transfer to non-financial assets

－

－

－

－

－

－

Other

－

－

－

－

－

－

Total transactions with owners
Balance as of March 31, 2020

－

5,637

△40,296

33

4,765(4,832)

147,143

652,430

1,002,076(180,637)－

39,768Equity attributable to owners of parent
Other components of equity
Exchangedifferences on
Effective
translation of portion of cash
foreignflow hedges
operations
Balance as of April 1, 2019
Cumulative effects of changes in accounting
policies
Retroactively adjusted balance

Noncontrollinginterests

Total

Total equity

Total(16,547)(2,532)

71,6501,926,337

65,422

1,991,759－－－(1,302)－(1,302)(16,547)(2,532)

71,6501,925,034

65,422

1,990,456－－－(197,744)

4,454(193,290)

Other comprehensive income(15,393)790(65,498)(65,498)△384(65,882)

Comprehensive income(15,393)790(65,498)(263,243)

4,070

259,172)

－

－

－

(73)

－

(73)

ProfitPurchase of treasury shares
Disposal of treasury shares

－

－

－

5

－

5

Dividends－－－(40,363)(2,559)(42,922)

Share-based payment transactions

－

－

－

54

－

54

Changes in ownership interest in
subsidiaries
Transfer from other components of equity
to retained earnings

－

－

－

5,684

12,287

17,971

－

－

(67)

－

－

－

Transfer to non-financial assets

－

(71)

(71)

(71)

－

(71)

Other

－

－

－

－

306

306

－

(71)

(138)

(34,764)

10,034(24,730)(31,941)(1,813)

6,012

1,627,026

79,526

1,706,552

Total transactions with owners
Balance as of March 31, 20209

(4) Consolidated Statement of Cash Flow(million yen)
Fiscal 2019
(April 1, 2019 –March 31, 2020)

Fiscal 2018
(April 1, 2018 –March 31, 2019)
Cash flows from operating activities
Profit (loss) before tax

209,313(213,473)

Depreciation and amortization

196,243

231,577(23)(6,601)

Interest and dividend income(10,627)(12,205)

Interest expenses

13,64814,486

Decrease (increase) in trade and otherreceivables

2,533

86,357

Decrease (increase) in inventories(82,525)

42,559

Increase (decrease) in trade and other payables

19,691(52,338)

Other

(669)

184,494

Changes in allowance

Subtotal

347,585

274,856

Interest and dividends received

19,01424,192

Interest paid

(12,606)(13,241)

Income taxes paid

(85,741)(24,736)

Cash flows from operating activities

268,251

261,070(312,578)(352,842)

488

3,357

(8,394)(35,299)

6,889

23,530243

2,875(313,351)(358,378)

Cash flows from investing activities
Purchase of property, plant and equipment,
intangible assets, and investment property
Proceeds from sale of property, plant andequipment, intangible assets, and investment
property
Purchase of investments
Proceeds from sale of investments
Other
Cash flows from investing activities

10(million yen)
Fiscal 2019
(April 1, 2019 –March 31, 2020)

Fiscal 2018
(April 1, 2018 –March 31, 2019)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

18,752(11,500)

Increase (decrease) in commercial papers

77,0005,999

Proceeds from long-term borrowings

213,499

183,529

Repayments of long-term borrowings(200,487)(104,825)

Proceeds from issuance of bonds

30,000120,000

Redemption of bonds(15,000)-

Payments for purchase of treasury shares(1,627)(73)

Dividends paid to owners of parent(54,640)(40,363)

Other(15,614)(48,865)

Cash flows from financing activities

51,882103,900388(2,176)

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

7,170

4,416

Cash and cash equivalents at beginning of period

75,11782,288Cash and cash equivalents at end of period

82,28886,70411

(5) Notes to Consolidated Financial Statements
Notes Pertaining to the Presumption of a Going Concern
There is no item for this period.
Changes in accounting policies
Application of IFRS 16 Leases
Effective from the first quarter of the fiscal year ending March 31, 2020, we have adopted IFRS 16 Leases (issued
January 2016).
(i) Leases as a lessee
IFRS 16 introduces a single accounting model for a lessee’s leases, rather than classifying them into financeleases and operating leases. In general under IFRS 16, a lessee is required to recognize a right-of-use
asset representing its right to use the underlying leased asset and a lease liability representing its obligation
to make lease payments. However, we use the exemption for short-term leases and leases of low-value
assets; instead of recognizing right-of-use assets and lease liabilities for such leases, it expenses the lease
payments on a straight-line basis over the lease term. After recognizing a right-of-use asset and a leaseliability, we subsequently recognize depreciation of the right-of-use asset and interest on the lease liability.
In applying IFRS 16, we use the transition method described in paragraph C5(b) of IFRS 16 and thus
recognize the cumulative effects of initially applying the standard at the date of initial application (April 1,2019). We have not restated comparative information for the consolidated financial statements under review.
In applying IFRS 16, we selected the practical expedient detailed in paragraph C3 of IFRS 16 for the
purpose of assessing whether a contract is, or contains, a lease and thus continue to use the assessments
previously made under IAS 17 Leases and IFRIC 4 Determining Whether an Arrangement Contains a Lease.
For such assessments made on or after the date of initial application, we apply the provisions of IFRS 16.
(ii) Leases as a lessor
Leases entered into as a lessor are classified as either finance leases or operating leases according to thesubstance of the transaction rather than the form of the contract. Assets held under finance leases arepresented as receivables in an amount equal to the net investment in the lease.
In the case of subleases, the intermediate lessor classifies the sublease with reference to the right-of-use
asset arising from the head lease.
In the case of operating leases, we record the leased assets on the condensed consolidated statement offinancial position and recognize lease payments as income on a straight-line basis over the lease term.
The adoption of IFRS 16 resulted in a 104,408-million-yen increase in total assets, a 105,711-million-yen increase in total
liabilities and a 1,302-million-yen decrease in retained earnings as of the beginning of the fiscal year ending March 31, 2020.
The weighted average of the lessee’s incremental borrowing rate applied to lease liabilities at the date of initial application(April 1, 2019) is 0.6%.
The following shows the adjustments between total future minimum lease payments under non-cancellable operating leaseagreements as of the end of the fiscal year ended March 31, 2019 disclosed in accordance with IAS 17 and lease liabilities
recognized on the condensed quarterly consolidated statement of financial position at the date of initial application.
Future minimum lease payments under non-cancellable operating lease agreements as of March
31, 2019 (after discount at the incremental borrowing rate)

32,974

Finance lease liabilities recognized as of March 31, 2019

51,375

Operating lease agreements, etc. that are not non-cancellable, recognized as of the dateof initial application

72,738

Lease liabilities recognized on the condensed quarterly consolidated statement of financial position
as of the date of initial application

157,087

We use the following practical expedients in applying IFRS 16.
• We adopt a single discount rate for portfolios of leases that have reasonably similar characteristics• We exclude initial direct costs from the measurement of the right-of-use asset at the date of initial application• We use hindsight when, for example, calculating the lease term for contracts that include an extension or cancellation
optionWith the adoption of IFRS 16, we have renamed “Bonds payable, borrowings, and lease obligations” on the consolidated
statement of financial position for the previous fiscal year as “Bonds payable, borrowings, and lease liabilities”.
12Segment information(1) Overview of reportable segments
The Group organized under JFE Holdings executed commercial activities through three operating companies—JFE
Steel Corporation, JFE Engineering Corporation and JFE Shoji Trade Corporation—in accordance with thecharacteristics of their respective businesses. Consolidated reporting segments, one for each operating company, werecharacterized by their constituent products and services.
Each segment had its own respective products and services. The steel business produced and sold various steel
products, processed steel products and raw materials, and provided transportation and other related businesses suchas facility maintenance and construction. The engineering business handled engineering for energy, urban environment,
steel structures and industrial machines, recycling and electricity retailing. The trading business purchased, processedand distributed steel products, raw materials for steel production, nonferrous metal products, and food, etc.
(2) Information on reportable segments
The Group assesses segment performance on the basis of segment profit. Segment profit is profit before tax excluding
one-time items of a materially significant value.
Intersegment transactions are based on market prices and the like.
Fiscal 2018 (April 1, 2018 to March 31, 2019)

Steel

Engineering

Trading

Total

Adjustments1(million yen)Amountrecorded inconsolidated
financialstatements

Revenue
Revenue from externalcustomers
Intersegment revenue

2,441,696

471,673

960,292

3,873,662－

3,873,662

388,953

14,142

165,568

568,663(568,663)

－

Total

2,830,649

485,815

1,125,861

4,442,326(568,663)

3,873,662

161,383

20,10435,761

217,250

2,315

Segment profit

219,566

Impairment losses(10,252)

Profit before tax

209,313

Segment assets

3,951,109

416,079

756,258

5,123,448(414,246)

4,709,201

Other items
Depreciation andamortization
Impairment losses

182,343

7,878

6,020

196,2412

196,243(9,736)

(470)

(44)

(10,252)－(10,252)

Finance income

1,451

141

717

2,311

(228)

2,083

Finance costs(11,399)(701)(2,885)(14,986)398(14,588)
Share of profit of entities
accounted for using equity
38,7771,351
1,075
41,205
1,480
42,685methodInvestments accounted for
268,568
10,415
13,814
292,798
22,265315,064
using equity method
Capital expenditures
306,285
11,648
11,571
329,504
1
329,505
1 Adjustments are as follow:(1) Adjustments to segment profit include corporate profit not allocated to a reportable segment: -104,233 million
yen, elimination of dividend income from each reportable segment: -103,928 million yen, and share of loss ofentities accounted for using equity method related to Japan Marine United Corporation: -219 million yen;elimination of other intersegment transactions: -1,791 million yen. Corporate profit is profit of the Company.
(2) Adjustments to segment assets include corporate assets not allocated to a reportable segment: 61,666 million
yen and elimination of intersegment receivables and payables, etc.: -475,913 million yen. Corporate assets
are assets of the Company.

13

Fiscal 2019 (April 1, 2019 to March 31, 2020)

Steel

Engineering

Trading

Total

Adjustments1(million yen)Amountrecorded inconsolidated
financialstatements

Revenue
Revenue from externalcustomers
Intersegment revenue

2,311,251

498,629

919,8363,729,717－

3,729,717

370,098

13,666

164,301

548,065(548,065)

－

Total

2,681,350

512,295

1,084,137

4,277,783(548,065)

3,729,717(8,783)

23,11827,016

41,351(15,998)

Segment profit

25,353

Impairment losses(238,826)

Profit before tax(213,473)

Segment assets
Other items
Depreciation andamortization
Impairment losses
Finance income

3,836,847

465,734

756,141

5,058,723(412,602)

4,646,120

209,031

13,302

10,244

232,578(1,000)231,577(233,144)(356)(5,325)(238,826)－(238,826)

1,437

140

1,354

2,932

(205)

2,727

Finance costs(11,721)(697)(3,492)(15,910)636(15,273)
Share of profit of entities
accounted for using equity
25,518477
558
26,554(17,772)
8,782
methodInvestments accounted for
289,406
11,562
14,909315,878
20,162
336,040
using equity method
Capital expenditures
362,741
11,892
17,986392,621(1,265)391,356
1 Adjustments are as follows.
(1) Adjustments to segment profit include corporate profit not allocated to a reportable segment: 48,548 million
yen, elimination of dividend income from each reportable segment: -48,365 million yen, and share of profit ofentities accounted for using equity method related to Japan Marine United Corporation: -17,995 million yen;elimination of other intersegment transactions: 1,813 million yen. Corporate profit is profit of the Company.
(2) Adjustments to segment assets: Corporate assets not allocated to a reportable segment: 45,607 million yen
and elimination of intersegment receivables and payables, etc.: -458,210 million yen. Corporate assets areassets of the Company.

14Per-share information(1) Basic earnings per share and diluted earnings per share
Fiscal 2018
(April 1, 2018
– March 31, 2019)

Fiscal 2019
(April 1, 2019
– March 31, 2020)

Basic earnings (losses) per share (yen)283.81(343.39)

Diluted earnings (losses) per share (yen)283.76(343.39)(2) Basis for calculation of basic earnings per share and diluted earnings per share
Fiscal 2018
(April 1, 2018
– March 31, 2019)
Profit used in calculation of basic earnings per share anddiluted earnings per share
Profit(loss) attributable to owners of the parent
company (million yen)Amount not attributable to common shareholders of
the parent company (million yen)
Profit(loss) used in calculation of basic earnings per
share (million yen)
Profit adjustments (million yen)
Profit (loss)used in calculation of diluted earnings per
share (million yen)
Weighted average number of common shares used in
calculation of basic earnings per share and diluted
earnings per share
Weighted average number of common shares used in
calculation of basic earnings per share (thousand
shares)
Impact of dilutive potential common shares(thousand shares)
Share-based payments
Weighted average number of common shares used in
calculation of diluted earnings per share (thousand
shares)Fiscal 2019
(April 1, 2019
– March 31, 2020)

163,509(197,744)－－

163,509(197,744)－－

163,509(197,744)

576,117575,854114－

576,231575,854

Note: Company shares held in trust accounts for employee stock ownership plans are included in treasury shares, which
are excluded from the calculation of the weighted average number of shares used in the calculation of basic
earnings per share. The weighted average number of treasury shares excluded from the calculation of basic
earnings per share for the previous and current consolidated fiscal years are 378,000 and 589,000, respectively.
A total of 118,000 shares of stock compensation have a reverse dilution effect and are not included in the calculationof diluted earnings per share for the current fiscal year
Material subsequent events
There is no item for this period.

15

4. Supplementary information(1) Consolidated financial performance

Steel Business

FY 2018
Full year(billion yen)
2,830.6

FY 2019
Full year(billion yen)
2,681.3

485.8

512.2

26.4

5.4

1,125.8

1,084.1(41.7)(3.7)

Engineering BusinessTrading Business
Adjustments

ChangeFull year
Full year(billion yen)(%)
(149.3)(5.3)(568.6)(548.0)20.6-

3,873.6

3,729.7(143.9)

(3.7)

A

232.0

37.8

(194.2)(83.7)

B(12.5)(12.5)

0.0-

Steel Business

161.3

(8.7)

(170.0)-Engineering Business

20.1

23.1

3.0

14.9

Trading Business

35.7

27.0

(8.7)

(24.4)

Adjustments

2.3(15.9)(18.2)-

Revenue
Business profit 1
Finance income / costs
Segment Profit

Total

A+B

Exceptional Items 2
Profit before tax

219.5

25.3

(194.2)(88.5)(10.2)(238.8)(228.6)-209.3(213.4)(422.7)-Tax Expense and Profit (Loss)
Attributable to Non-controlling
Interests
Profit Attributable to Owners of Parent
1(45.8)

15.7

61.5

-

163.5

(197.7)(361.2)-Business profit: Profit that excludes financial income and exceptional items from profit before tax. It is a benchmark indicator of thecompany’s consolidated earnings.

2

Exceptional Items: One-time items of a materially significant value.

(2) Consolidated Financial IndicesFiscal 2018

Fiscal 2019

Change6.0%

1.0%(5.0%)

1

Return on Sales (ROS)

2

5.0%

0.8%

(4.2%)

Return on Equity (ROE)3

8.6%(11.1%)(19.7%)EBITDA4

428.2 billion yen

269.4 billion yen(158.8 billion yen)Interest-bearing debt outstanding

1,523.8 billion yen

1,814.3 billion yen

290.5billion yen**

Return on Assets (ROA)

Debt / EBITDA multiple5
Equity attributable to owners of parent

3.6x

6.7x

3.1x

1,926.3 billion yen

1,627.0 billion yen(299.3 billion yen)

68.2%

96.4%

28.2%

D/E Ratio6
1

ROS = Business profit / Revenue

2

ROA = Business profit / Total assets

3

ROE = Profit attributable to owners of parent / Equity attributable to owners of parent

4

EBITDA = Business profit + Depreciation and amortization

5

Debt / EBITDA multiple = Interest-bearing debt outstanding / EBITDA

6

D/E ratio = Debt outstanding / Equity attributable to owners of parent. For debt having a capital component*, a portion of its issue price isdeemed to be capital, as assessed by rating agencies.

* For debt having a capital component, a portion of its issue price is deemed to be capital, as assessed by rating agencies.
Borrowing Execution Date
Amount Borrowed
Assessment of Equity Content
June 30, 2016
200.0 billion yen
25%
March 19, 2018
300.0 billion yen
25%** Impact of application of IFRS 16 Lease
Amount increased at beginning of FY2019
Lease liabilities
105.7 billion yen

16

Amount Deemed to be Capital
50.0 billion yen
75.0 billion yen

(3) Crude Steel Production (JFE Steel)

FY 2018

Non-consolidated
Consolidated

FY 2019

Non-consolidated
Consolidated(million tons)

1Q

2Q

1H

3Q

4Q

2H

Full year

7.10
7.51
7.00
7.36

6.94
7.33
6.79
7.13

14.04
14.84
13.79
14.50

6.39
6.79
6.24
6.59

5.88
6.25
6.70
7.00

12.27
13.04
12.94
13.59

26.31
27.88
26.73
28.09

(4) Shipments (JFE Steel on non-consolidated basis)(million tons)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

6.13

5.93

12.06

6.24

5.48

11.72

23.78

FY 2019

5.85

5.94

11.80

5.59

6.09

11.68

23.47

(5) Export Ratio on Value Basis (JFE Steel on non-consolidated basis)

(%)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

42.4

44.2

43.3

43.5

36.0

40.1

41.7

FY 2019

39.9

42.1

41.0

39.7

44.4

42.1

41.5

(6) Foreign Exchange Rate (Yen/US dollar)(JPY/USD)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

108.1

110.9

109.5

113.4

110.3

111.9

110.7

FY 2019

110.7

107.6

109.2

108.8

109.4

109.1

109.1

(7) Average Selling Price (JFE Steel on non-consolidated basis)(thousand yen/ton)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

79.3

81.9

80.6

82.9

82.0

82.5

81.5

FY 2019

80.4

79.4

79.9

79.6

76.1

77.8

78.8

(8) Engineering Business Orders (including intersegment transactions, IFRS basis)a. Actual order received(billion yen)

Field

FY2018FY2019ChangeEnvironment
EnergyInfrastructure, others

212.6
132.8
137.4

187.1
109.8
116.1

(25.5)(23.0)(21.3)

Total

482.8

413.0

(69.8)(billion yen)

FY2018
yearend

FY2019yearend

Change

614.5

525.9

(88.6)

b. Order backlog(9) Capital Investment and Depreciation and Amortization (JFE Holdings)(billion yen)

FY 2018

FY2019

Capital Investment

329.5

391.3

Depreciation & Amortization

196.2

231.5

(on construction basis)17

(10) Breakdown of Changes in Segment Profit
FY 2019, compared to FY 2018(billion yen)
ChangeSteel Business
Cost reductions of +20.0 and one-time
effects of +22.0 in FY 2018

-

Cost

42.0

-

Sales volume and mix

(6.0)

-

Sales prices and raw materials(81.0)-

Unrealized gains (losses) on inventories(67.0)-

Materials prices etc.

(15.0)

Increased costs of materials, distribution,
subcontracting, etc.

-

Others(43.0)

Increased depreciation costs related toinfrastructure maintenance, groupcompanies, etc.

-

Total

(170.0)Engineering Business

3.0

Increased sales revenue

Trading Business(8.7)

Worsening trade friction between UnitedStates and China and falling steel prices

Adjustment(18.2)

Losses on equity-method shipbuilding
affiliates due to construction delays caused
by bad weather or natural disasters###

18