M e s s a g e from t h e Pre s i de nt

Message from the President

Naotaka Miyauchi
Representative Director & President

Overview of Fiscal 2019
Business performance
In fiscal 2019, ended March 31, 2020, the trend toward
the deceleration of overseas economies continued togrow amid Brexit and heightened geopolitical risks in
the Middle East in addition to a stagnation of the U.S.
manufacturing sector and a slowing Chinese economy,both of which arose mainly due to the impact of U.S.China trade frictions. The Japanese economy was alsoanemic, with weak exports due to the deceleration ofoverseas economies coupled with stagnant demandcaused by the consumption tax hike. Moreover, in the
fourth quarter, the global COVID-19 pandemic put thebrake on economic activities, forced the manufacturingsector to suspend operations, stagnated logistics, and02

restricted overseas travels, precipitating a drastic economic downturn worldwide.
With respect to the JSW Group’s operating environment, in the Industrial Machinery Products Business segment, demand for plastic products for the automobile
sector slowed while demand for materials for automobile-use lithium-ion batteries remained stagnant inChina. The Steel and Energy Products Business segment
continued to face difficult operating circumstances due
to an intensified price competition for clad steel platesand pipes, for which a recovery was expected on theback of expanding demand for natural gas, in addition
to a contraction in the market for large cast and forgedsteel products.
Despite these conditions, the JSW Group formulated
a banner of “‘Growth’ in Industrial Machinery Products
Business, ‘Rebirth’ in Steel and Energy Products Business”

and promoted its business activities centered aroundthree basic policies in accordance with the medium-term
management plan entitled JGP2020, which was formulated in May 2018 to lay out strategies for the three years
until the fiscal year ending March 31, 2021. These threebasic policies are: 1) optimization of management
resources and strengthening of alliances; 2) strengthening after-sales services (stock-based business); and 3)
acceleration in exploration and development of newbusinesses.
For fiscal 2019, total orders amounted to ¥211,571
million (US$1,944 million), down 2.1% from the previousyear, due to a decrease in orders in the Industrial Machinery Products Business segment offsetting an increase inthe Steel and Energy Products Business segment*. Net
sales fell 1.2% to ¥217,527 million (US$1,999 million),with both the Industrial Machinery Products Businessand Steel and Energy Products Business segments securing sales on par with the previous fiscal year. With regard
to profits, the JSW Group posted operating income of¥18,709 million (US$172 million), down 23.0%, and ordinary income of ¥19,907 million (US$183 million), down
28.7%. In the previous fiscal year, we posted an extraordinary gain arising from sales of property, plant andequipment while posting a valuation loss on investment
securities caused by a drop in stock prices throughout
the securities market. We also recorded an extraordinary
loss of provision for business restructuring as an additional cost in the maintenance and repair business forwind turbines during fiscal 2019. As a result, profit attributable to owners of parent was down 53.4% to ¥9,310
million (US$86 million).

Certain countries, including China, the United States andEurope, have restarted economic activities; however,with no end in sight to the pandemic, both the overseas
and Japanese economies continue to remain in a stateof uncertainty.
As for the JSW Group’s operating environment,
although the Industrial Machinery Products Businesssegment is expected to witness sluggish demand forplastic products for automobiles as well as anemic
market conditions for materials for automobile-use lithium-ion batteries for the short term, we aim to strengthen
product competitiveness by further reducing costs anddeveloping new products. We expect a difficult businessenvironment to continue in the Steel and Energy Products Business segment due to a contraction in themarket for large cast and forged steel products andintensifying competition for clad steel plates and pipes.
Nevertheless, we plan to steadily reinforce the businessfoundation with Japan Steel Works M&E, Inc., which wasestablished in April 2020, taking the lead.
To minimize the impact of the COVID-19 pandemic
on our business, we will carry out various measures suchas appropriately managing funds, monitoring production and inventory, and securing the supply chain. At thesame time, in anticipation of the post-COVID-19 markettrend, we will continue to push forward with initiatives
in accordance with the basic policies laid out in themedium-term management plan (JGP2020).

October 2020

*Effective from April 1, 2020, the Steel and Energy Products Business was
renamed the Material and Engineering Business.

For the fiscal year ended March 31, 2020, we paid ayear-end dividend of ¥17.50 per share. Coupled with aninterim dividend of ¥27.50 per share, the total dividends
per share were ¥45.00.
Looking ahead, the world economy is expected todecelerate for the foreseeable future, as the COVID-19
pandemic has left economic activities in suspension.

03