M essage from the President

Message from the President
anemic. The Steel and Energy Products Business segment continued to face difficult operating circumstances
due to a contraction in the market for large cast/forgedsteel products despite a sign of recovery in demand forclad steel plates and pipes on the back of expanding
demand for natural gas.
Under these conditions, the JSW Group formulated abanner 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 three

Naotaka Miyauchi
Representative Director & President

Overview of Fiscal 2018such as torrential rains and earthquakes, the Japanese
economy also achieved mild growth underpinned by an

Business performance

improvement in the employment situation and an
expansion in capital investment.
With respect to the JSW Group’s operating environment, in the Industrial Machinery Products Business segment demand for plastic products was strong due inpart to a shift toward reducing automobile weight; however, demand for materials for automobile-use lithium-ion batteries was temporarily stagnant. In addition,
the operating condition became even tougher in thesecond half of the fiscal year as capital investment wasimpacted by the U.S.-China trade frictions and turned

In fiscal 2018, ended March 31, 2019, overseas economies continued to grow moderately. Despite concerns
over an economic slowdown arising from such factors as
escalating U.S.-China trade frictions, the decelerating
Chinese economy, and Brexit, overall overseas economies grew because of the favorable employment situation and strong consumer spending in the United States,
Europe, and other industrialized countries. Althoughsomewhat impacted by a succession of natural disasters

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basic 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 2018, total orders amounted to ¥216,155
million (US$1,948 million), down 8.3% from the previousyear, due to decreases in orders in both the Industrial
Machinery Products Business and Steel and Energy Products Business segments. Net sales edged up 4.0% to¥220,153 million (US$1,984 million), with higher sales inboth the Industrial Machinery Products Business andSteel and Energy Products Business segments. With
regard to profits, the JSW Group posted operating
income of ¥24,290 million (US$219 million), up 18.0%;
ordinary income of ¥27,925 million (US$252 million), up
26.3%; and profit attributable to owners of parent of¥19,966 million (US$180 million), up 86.4%.
Looking ahead, the world economy is expected tocontinue growing moderately, driven mainly by ongoing
improvements in employment and consumer spending

in the United States and an anticipated economic recovery due to the effects of various measures in China. InJapan, we expect the economy to mildly grow on theback of improvements in employment and capital
investment. On the other hand, uncertainties regarding
trade issues, the impact on exporting companies due tothe prolonged Brexit process, the effect of the consumption tax hike on the Japanese economy, and other factors require close monitoring.
Under these circumstances, the JSW Group formulated the medium-term management plan (JGP2020),
which sets out strategies for the three years until thefiscal year ending March 31, 2021, and promoted business activities accordingly. However, more significant
changes have arisen in the market trends in our mainstay Industrial Machinery Products Business thanassumed at the time of the management plan formulation, including a stagnant market for materials for automobile-use lithium-ion batteries in China, uncertainties
in the capital investment trend due to the impact of U.S.China trade frictions, and other factors. As a result ofsuch drastic changes in our business environment, weare revising the numerical targets in the medium-term
management plan (net sales of over ¥260 billion(US$2,343 million) and consolidated operating incomeof ¥30 billion (US$270 million)). The new numerical targets will be disclosed as soon as possible after deliberateconsideration. We are certain, however, that our basic
strategies are still effective, so we will maintain the measures for implementing the plan.
June 201903