Securities code: 5451

Yodogawa Steel Works, Ltd.

YODOKOREPORT
122nd Term Report
April 1, 2020-March 31, 2021

To Our Stakeholders

1948 Started manufacture ofcast iron and steel rolls
1940 Started manufacture ofgalvanized steel sheets

1935
Established the company in Osaka (at the locationof the current Osaka Plant) on January 30 for the
production and sale of steel sheets and otherproducts

1935

1954
Constructed Kure Plant
for manufacturing coldrolled steel sheets andother products

1951
Constructed Izumiotsu
Plant for manufacturing
steel products

1951

1964 Started manufacture of
pre-painted steel sheets

1972 Constructed Ichikawa Plant for manufacturing coldrolled steel sheets and other products

1963
Started operating a continuous
hot-dip galvanized steel sheet line

1965
Started manufactureand sales of building
materials

1965

1970
Started manufactureand sales of exterior
products

1986
Started manufacture of galvalume steel sheets

1994 Made Sheng Yu Steel Co., Ltd.
(Taiwan) a subsidiary1999 Established PCM Processing (Thailand) Ltd.
in Thailand

1970

1994

2007
an
Started sales of chromate-freeindustry
pre-painted steel sheets forfirstroofing and siding

2011
Established YodogawaShengyu (Hefei) High-Tech
Steel Co., Ltd. in China

2020
Established Fukui
Yodoko Co., Ltd.

2011

A History Shaped by
the Constant Pursuitof Value Creation

Yodogawa Steel Group Corporate Philosophy
Basic Philosophy

Create Value with New Originality
The basic philosophy of the Yodogawa Steel Group
is to “Create Value with New Originality,” centeredon surface-treated steel sheets with the goal ofbeing a valued, needed company that earns thetrust of society.
Business Philosophy

Satoshi Nitta

President and Representative Director

1

Win the trust of customers and shareholders andcreate the functional capabilities expected by them.
Aim to be the best manufacturer to meet the broadneeds of society. Grow by taking on the challenge
to innovate and by expanding based on thecreativity of each employee.
Work in harmonious coexistence with society andthe natural environment.

We would like to take this opportunity to express
our appreciation for your support.
The overseas business climate for the Yodogawa
Steel Group became increasingly uncertain during
the fiscal year ended March 31, 2021 because of
the inability to predict the end of the COVID-19
pandemic, U.S.-China trade friction and otherreasons. In Japan, although some sectors of theeconomy started to recover, a combination ofprogress and setbacks concerning the pandemic
and economic will probably continue.
In the steel market, there are concerns about
instability of the balance between the supply anddemand for steel for the time being in Japan andother countries. As a result, the steel market islikely to remain difficult with an uncertain outlook.
In operations outside Japan, group companies

are continuing to have difficulty capturing orders
because of the effects of trade protectionism.
Furthermore, an unpredictable and unstableenvironment for demand and expenses is
expected to continue in every region where thegroup companies operate.
To succeed in this uncertain business climate, allgroup companies are dedicated to achieving thegoals of the Yodogawa Steel Group Medium-termManagement Plan 2022. To become even more
profitable, companies are establishing positions in
new markets and increasing sales of value-added
products while taking full advantage of the speed
and agility that are a key strength of the
Yodogawa Steel Group.
We sincerely ask for your continued support andguidance.
June 2021
2

1

Business segment sales

Our Position in the Iron and Steel Industry

Real Estate& Other

Blast furnace steelmaking

Steel Sheet Segment

1 Raw materials

1

Pickling

2

Cold rolling

3

Continuous galvanizing

4

2.4%

Rolls

1.6%
Steel Sheet-related
Business

Continuous color coating

Limestone

Pre-painted
steel sheets

Coal

Steel Sheet
Segment

Iron ore

2 Blast furnaceand casting

4 SteelGalvanizedsteel sheets

Cold rolled sheets and strips

Building Materials Segment

1

2

Molding/
processing and assembly

Exterior Products Segment

Building materials

1 Molding/
processing and assembly

Hot rolled
steel sheets

Steel Rolls Are Instrumental in a Variety ofIndustrial Fields
With products that range from rolls for the steel
industry fabricated by one of the world’s largest
centrifugal casting facilities to equipment for thepaper industry, including rolls and peripheral
equipment, Yodogawa Steel is one of Japan’s
leading roll manufacturers.

3

Steel Sheet-related

92.8%

Supplying Products that Perfectly
Match Customer Needs
High-quality steel sheets incorporating years ofaccumulated technologies are used for a variety of industrial purposes, such as construction and the manufacture of home appliancesand housing equipment. Through the development of highly functional, value-added, andenvironmentally friendly products, Yodogawa
Steel meets the demands of customers.

An appliance using Yodoko steel sheets

A building interior with Yodoko panels

A building with YODO fire-proof panel
Grand Wall

YODO-Garage Emerge Ⅱ

Building Materials and Exterior Products:
Part of Our Society and Daily Lives

Construction

Building
Materials & Exterior
Products Segment

Exterior products

Roll Business(Fiscal year ended March 31, 2021)

Gratings

We develop and supply distinctive products in a variety ofbusiness sectors by focusing on our key elements of security,
safety, the environment, and beauty.

3 Steelmaking

150,358 million yen

3.3%

What is Yodoko?

Grating Business

From molding and processing technology
gained through our integrated steel sheet
manufacturing, to our nationwide sales andservice network, we make the most of years ofexperience to produce a variety of pioneering
products that include steel-sheet building
materials and exterior products.

Yodogawa Gratings Contribute toa Safe and Secure Environment

Gratings are an integral part of the roads, parks,and other infrastructure that are vital to public
safety and security. We supply a range of
products from the standpoint of everyday
activities that are environmentally friendly, peoplefriendly, and safe.

Real Estate &Other Businesses
The Real Estate Business
manages and effectively
uses properties owned by
Yodogawa Steel by leasingbuildings and operating
parking lots.
4

2

The Production and Sales Frameworks Behind Our Momentum

Japan
Yodogawa Steel Works, Ltd.

What is Yodoko?
Yodogawa Steel Works, Ltd.
Sales bases
Production bases●

Net sales by country and region
Southeast Asia

Other

North / Central /South America

Japan

0.4%

1.0%

0.9%

●

97.8%

99,283

●

●

●

China

(Fiscal year ended March 31, 2021)
A well-balanced network of
production bases in Japan and 21 sales officesthat maintain close relationships with customers
and with the region that each office serves.

Japan

●
■

Net sales by country and region●■

Thailand●■■Taiwan

North / Central /South America

0.7%Southeast
Asia

Other

0.8%

4.4%
5.9%
TaiwanTaiwanSheng Yu Steel Co., Ltd.
(SYSCO Taiwan)

Net sales by country and region
Oceania

3.2%

million yen

●

●

●

TaiwanChina
Yodogawa-Shengyu (Hefei)
High-Tech Steel Co., Ltd.
(YSS China)

122

1,521

China

255

2,381

(Fiscal year ended March 31, 2021)

China

93.9%

6.1%

million yen

32,164
North /
Central /South America

Japan

Southeast
Asia

9,243

69.3%

ThailandNet sales by country and region

76.5%

Japan

No. of employees by region

483

2.7%

9.5%

(Fiscal year ended March 31, 2021)

TaiwanOther

Southeast Asia

150,358

16.6%

Starting ahead of ourcompetitors, we established awell-balanced sales andproduction network in Asia anduse this infrastructure to supply
high-quality surface-treated steel
sheets to customers worldwide.

●
■

●
■

●
■

●

Oceania

2.3%

China &
Hong Kong

●

●

●
●

●
●

million yen

5

●

●

million yen(Fiscal year ended March 31, 2021)

Thailand

8.1%(Fiscal year ended March 31, 2021)

SYSCO Taiwan
has business operations with deep roots in
Taiwan, including a listing on the Taiwan
Stock Exchange and strong brandrecognition in Taiwan.

Net sales by country and region
Southeast
Asia

PCM Processing (Thailand)Ltd. (PPT Thailand)

100.0%

3,319
million yen(Fiscal year ended March 31, 2021)

6

3

Shareholders
andinvestors

The Value Creation Process

What is Yodoko?

We aim to contribute to sustainable social progress and to growas a company through the creation of value for security, safety,
the environment, and beauty.
The Yodogawa Steel Group’s goal is sustained growth by utilizing speed andagility based on our Corporate Philosophy for business operations and taking
full advantage of the Group’s collective strengths.

Social challenges
Basic Philosophy
A declining and aging
population with a lowbirth rate
Depletion of natural
resources
Disaster mitigationand preparedness
Create a sustainable
societyMore diverse andcomplex customer
needs
Corporate integration
and restructuring (ironand steel industry)
Increase of tradeprotectionism
Faster globalizationand intensifying
competition

7

Strengths of the Yodogawa
Steel Group

Create Value with New Originality

Long-Term Vision

Creating Value throughBusiness Activities
For more
information see

Yodogawa Steel Group Medium-Term
Management Plan 2022
Basic
PolicyThe SAKURA 100
Our Goals

Speed and Agility

1 SalesA sales framework in Japanand other countries closely
tied to local customers

3 Procurement
Flexible procurement due
to our absence of affiliations
with any corporate groups

Business Activities
Steel Sheet-related Business
Steel Sheet Segment
Building Materials & Exterior
Products Segment

2 Technology
Technical capabilities for
precisely meetingcustomers’ needs

4 Production
Well-balanced production
network in Japan andother countries

For more
information see

An agile company able toadapt to a variety ofchanges in market
conditions
An ambitious company
that takes on thechallenge of entering new
business fields
A successful company
that is admired andrespected worldwide

3-6Roll Business

Real Estate & Other Businesses

Take full advantage of the
Yodogawa Steel Group’s
key strengths of speed
and agility as well as thecollective power of theGroup
Focus on building afoundation for our LongTerm Vision

Basic
Strategy

Use speed and agility
to build a stronger
profit structure•	
Make the business model even more
powerful
Further upgrade manufacturing skills•	Take on the challengeof entering new
business fields•	Start new businesses based on
existing business

pages

Grating Business

17-18

pages

We created a logo for The SAKURA 100,
the Yodogawa Steel Group’s long-term
vision (announced in March 2017), withthe objectives of increasing awarenessof the vision at every group company
and deepening our stakeholders’
understanding of the vision.

Product development, manufacturing,sales and all other activities place priority
on safety, security, the environment, andbeauty with the goal of providing diverse
types of value to stakeholders.

Security

SafetyEnvironment

BeautyThe Sustainable
Development Goals
The Sustainable Development Goals wereadopted in September 2015 at the United
Nations Sustainable Development
Summit, which was attended by morethan 150 world leaders. The SDGs consistof 17 goals and 169 targets.
The Yodogawa Steel Group is determined
to make an even greater contribution toaccomplishing the SDGs by usingbusiness activities to create value.

•	Maximize corporate value byachieving sustainable growth•	Provide stable, continuous
returns to shareholders

Customers
andbusiness
partners•	Supply safe and reliable products
and services that meet the needsof customers and society•	
Use our more than 80 years ofexperience to build business
partner relationships rooted inmutual trust

Employees• P rovide a safe and secureenvironment conducive to
productive work•	Develop a team of people with
distinctive strengths who are
constantly growing and taking
on new challenges

Establish a foundation
for sustainable
operations

Societyandnature• M ake substantial investments andimprove capital productivity for moreprogress and growth•	
Increase training programs for next
generation and organizational strength• Coexist with all of our stakeholders•	Contribute to lowering theenvironmental impact by
supplying environmentally
responsible products•	Contribute to social
infrastructure by supplying
attractive products8

4Financial and Non-financial Highlights

What is Yodoko?

Net sales, overseas net sales (consolidated)
Net sales(Millions of yen)Overseas net sales

Total assets(Millions of yen)

250,000

200,000
173,805

154,221

167,419

154,066

209,977

150,358

161,374
100,000
52,516

170,574

209,465
167,671

225,997
201,125
167,291

180,309

20,00010,000No. of employees (consolidated, non-consolidated)

Cash flows from investing activities

Cash flows from operating activities
Free cash flow

(Millions of yen)

10,2188,273 9,505

8,658
1,933

1,232

-1,407-9,026

0

2,402

2,425

2,422

2,431

Non-consolidated
2,381

12,476
5,927 4,519-1,559-10,000

Consolidated(People)2,500

17,149046,23045,358

0

1,250

1,196

1,156

1,233

1,204

1,195

-4,672-7,0930

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/17

FY3/18

FY3/19FY3/20FY3/21(118th term)(119th term)(120th term)(121st term)(122nd term)(118th term)(119th term)(120th term)(121st term)(122nd term)(118th term)(119th term)(120th term)(121st term)(122nd term)(118th term)(119th term)(120th term)(121st term)(122nd term)

Operating profit, ordinary profit,
profit attributable to owners of parent (consolidated)
Operating profit
Ordinary profit
Profit attributable to owners of parent(Millions of yen)

13,168 13,763
10,856

7,500

Shareholders’ equity (consolidated)

Capital expenditures, depreciation and amortization (consolidated)(Millions of yen)

(Millions of yen)

200,000

10,000143,241

12,284
9,829
7,360

6,734

9,792

7,880
7,425
6,258
5,879 6,254 5,489
3,862

151,586

150,236

150,037

FY3/17

FY3/18

FY3/19FY3/20FY3/21(119th term)(120th term)(121st term)(122nd term)

Net income per share, dividends per share (consolidated)
Net income per share(Yen)

Dividends per share

5,000

224

70

75

70

2,241

3,660

FY3/19FY3/20FY3/21(118th term)(119th term)(120th term)(121st term)(122nd term)(118th term)(119th term)(120th term)(121st term)(122nd term)

Total dividends, treasury shares acquired (non-consolidated)
Total dividends(Millions of yen)

5,115

2,500
2,110
1,802

Treasury shares acquired

2,088

4

2017

2018

1,063

2019

2020

(Year)

Environmental protection expenses, CO2 emissions(reduction vs. fiscal 1990 emissions*) Consolidated (Japan)
Investment
Environmental protection expenses
CO2 emission reduction
37
40(Millions of yen)

26

1,250

5

*Regular employees only

2,185

2,077

10

0

2016

500

75

28

30
644

712

766

(%)

40

556

670

20

302
486

0

4

1,000

2,245

(Hours)60

FY3/18

5,096

10

2,224

FY3/17

5,112

7.7

8

3,536

0

5,644

8.1

9
3,908

FY3/21

3,000
70

4,196
3,024

FY3/20

4,805

131

125

4,067

FY3/19

(Yen)

215

211

5,774

FY3/18

Net assets per share (consolidated)

No. of employees using the child care leave system
Average monthly overtime
8.9
8.0
7.6

(People)18

FY3/176,000

247

Depreciation and amortization

No. of employees using the child care leave system,
average monthly overtime* (non-consolidated)

8,740

0

(118th term)

Capital expenditures

162,485

100,000

0250

215,638

Net assets

125,000
62,902

54,24415,000Cash flows from operating activities, cash flows frominvesting activities, free cash flow (consolidated)

Total assets, net assets (consolidated)

437

295

0

0

67

63

26

24

FY3/17

FY3/18

FY3/19FY3/20FY3/21(118th term)(119th term)(120th term)(121st term)(122nd term)

0

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/17

FY3/18

FY3/19FY3/20FY3/21(118th term)(119th term)(120th term)(121st term)(122nd term)(118th term)(119th term)(120th term)(121st term)(122nd term)(118th term)(119th term)(120th term)(121st term)(122nd term)0* Under the Japan Iron and Steel Federation’s Voluntary Action Program (created in 1996), the commitment
was made to conserve energy in iron- and steel-making processes. A 10% reduction in fiscal 2010 energy
consumption compared with fiscal 1990 levels was established as the goal.

910

Interview with Top Management

Implement sales reforms and make products
more competitive by using entirely new ideas
During the fiscal year that ended in March 2021, the business climate was extremely difficult inJapan and worldwide because of the economic impact of the COVID-19 pandemic as well as
prolonged U.S.-China trade friction and other reasons.
The Yodogawa Steel Group’s net sales in the fiscal year decreased 2.4% to 150,358 million yen.
Operating profit increased 43.6% to 7,880 million yen, ordinary profit increased 31.9% to 9,792
million yen, and profit attributable to owners of parent increased 62.0% to 6,258 million yen.
To become even more profitable, group companies will target new markets, increase sales ofvalue-added products, and use new and innovative methods for reforming sales activities andreexamining the manufacturing and logistics infrastructure.

Satoshi Nitta President and Representative Director

What is your assessment of the Yodogawa

Q Steel Group’s performance in the fiscal year
ended March 31, 2021?

were down but, despite the COVID-19
A Sales
pandemic, our earnings were higher.
In the fiscal year ended March 31, 2021, economies in Japanand other countries faced extremely challenging conditions
because of the COVID-19 pandemic. In Japan, the sharp
downturn in economic activity severely impacted ouroperations during much of the fiscal year’s first half. In China,
which recovered quickly from the pandemic, the economy
recovered along with a rebound in domestic demand, higher
exports and other reasons. In this difficult environment, oursales were down but earnings increased.

YODO-Garage Emerge Ⅱ

Reforms of sales activities and many cost reduction measuresthese appliances as people stayed home for safety during thecontributed to earnings growth. I believe another important

pandemic. Sales of strips were slow for a while because offactor is our ability to purchase various materials with speed

the impact of the pandemic on automobile production. But

and agility.

signs of a recovery in demand in this category emerged in theI anticipate a challenging business climate again, particularly

fiscal year’s second half.

in Japan, in the fiscal year ending in March 2022. We willIn the Building Materials & Exterior Products Segment, we

continue to forcefully implement sales reforms and makeworked on lowering administrative expenses and boostingother improvements and I expect to see benefits from theseproduction yields for roof materials. Most significant was

activities.

collaboration with our customers for reviewing the entire
process from forming these materials from coils to the11

are the highlights or key points about
Q Whatthe performance of the business segments?

delivery of finished products. Supplying products with thewith reexamination for production
A Progressprocess and sales reforms.

measures for structural issues such as the management andIn the Steel Sheet Segment, we used the realignments of our

In addition, there were strong sales again in this fiscal year ofcompetitors as an opportunity to strengthen our sales

two garage products that we introduced in the fiscal year

capabilities. These measures have produced certain benefits.

ended in March 2020: YODO-Garage Emerge Ⅱ, a premium

distinctive value that only our group can provide remains ourgoal in this segment. At the same time, there will be more
expenses of this segment in order to make manufacturing
even more efficient.

Sales of pre-painted steel sheets for home appliances

garage model, and the stylish YODO Garage Raviege Ⅲ

performed relatively well. One reason was strong sales ofDressed Option.
12

Interview with Top Management

Interview with Top Management

Sales of YODO Monooki storage sheds were relatively strong

performance was severely impacted by U.S. trade

outdoor recreation products and has many fans in Japan.

because of demand associated with people staying home.

protectionism that restricted exports of steel and aluminum

This new model targets the increasing demand in Japan forMarketing activities included a new streaming video website

products to the United States. I do not think this problem canoutdoor recreation products as well as the growth ofthat provides new ideas for using these storage sheds based

be resolved quickly even with the new Biden administration.

“camping at home” during the pandemic. Working withon the concept of enjoying time at home.

Everyone at our group is firmly committed to achieving the

Coleman will make it possible to add a new category to theOn the other hand, distribution expenses are a problem forgoals of the Medium-Term Management Plan 2022 and ourmarkets for our storage sheds.

some exterior products. To receive the understanding of

long-term vision. We will continue to move quickly with

To bolster production and distribution operations, Fukui

customers, we are reviewing all distribution activities,

reforms to sales activities, cost cutting and many other

Yodoko Co., Ltd. will start a full-scale operation of a new

including distribution bases, and cutting expenses. We haveinitiatives.

factory at the end of 2021. This factory will give us a stronger
infrastructure for producing and distributing exterior products

also started charging for deliveries.
I am confident that these reforms to our sales activities,
including the reexamination of sales channels for roofing
products that I mentioned earlier, will improve our profitability.

A

Joint programs for the 50th anniversary of thestart of sales of YODO Monooki Storage Sheds.

In the Building Materials & Exterior Products Segment, I want

At our steel sheet factory, we need to start thinking about
investments to replace aging equipment.

actions to receive their understanding. My goal is to startstronger profit structure; take on the challenge of entering

seeing benefits of these measures in the fiscal year ending in

new business fields; and establish a foundation for

March 2022.

sustainable operations. We are positioning this plan as the

In 2020, we celebrated the 50th anniversary of the launch ofdevelopment and sales personnel. To accomplish this, I have

Following the occurrence of problems created by improper

approach run for upcoming actions to make our long-term

YODO Monooki Storage Sheds. One event, delayed

placed the Head Office Development Division under thequality management in the Roll Business, all groupvision a reality.

somewhat by the COVID-19 crisis, was the sale starting insupervision of the general manager of the Sales Division. No

companies have taken many actions for making

The medium-term plan has the goal of consolidated ordinary

April 2021 of a limited number of the LMD-2215 Coleman

other company has this type of organizational structure for

improvements to our quality assurance system. In addition,

profit of at least 9 billion yen in the fiscal year ending in Marchstorage shed, which was created with Coleman Japan Co.,these activities. I believe this change will enable us to supply

we have largely completed the installation of a system that

2023, which is the plan’s final year. We have been using theLtd. Coleman is one of the world’s largest suppliers ofvalue-added products that precisely target the needs of ourautomatically utilizes measurement data. But we are still not

speed and agility that are a key strength of our group in ordercustomers.

satisfied with our response to this issue. We will continue toto cut costs, improve prices of our products, establish

The digital transformation is another priority. For safety during

seek more ways to make our quality assurance system evenrelationships with new customers and achieve progress inthe pandemic, we have been using TV conferences, telework

more rigorous.

other ways. As a result, consolidated ordinary profit in theand other measures involving this transformation. But morefiscal year was about 9.7 billion yen. However, we need toprogress is needed. Making business processes more

continue working on building an infrastructure capable ofefficient is only one aspect of the digital transformation. I also

consistent profitability.

want to use digital technologies extensively for adding new

One reason is concerns about the ability to offset the higher

forms of value to our products and services.

Q
A
13

Q
YODO Roof is used in the ceiling of the central terminal at Osaka International Airport

We will give our customers thorough explanations of ourthat I expect will make this business more profitable.

What are your highest priorities?

What is your assessment of the Yodogawa
Steel Group’s progress during the MediumTerm Management Plan 2022 and issues thatneed to be addressed?
Numerous activities for dealing with raw
material price volatility and trade protectionism.

to improve our product development capabilities with the goalof creating products through the unified activities of productprices of raw materials and many other items by productprice revisions alone. YSS in China achieved a big increase insales due mainly to heightening its stature in the steel market
and raising sales of value-added products. Now YSS needs

Our current medium-term plan started in April 2020. The plan

to focus on profitability. In Taiwan, SYSCO was not

has three core strategies: use speed and agility to build asignificantly affected by the COVID-19 crisis. However,

The YODO Monooki Storage Shed
LMD-2215 Coleman14Interview with Top Management

Interview with Top Management

tell us about your environmental andQ Pleasesocial activities.

The Japanese government has established the target of no

partnership agreement withA Comprehensive
the Cerezo OSAKA professional football club.

becoming carbon neutral. The Yodogawa Steel Group isEnvironmental protection has been one of the global pressing

incorporate these advances in production processes.

issues. The Yodogawa Steel Group has a strong commitment

We have established a comprehensive partnership with theStable, continuous distributions to shareholders are one of“trust” a key theme of my activities. I am determined to

to using business activities that reflect the Sustainable

Cerezo OSAKA professional football club covering the five-

our highest priorities. As one way to distribute earnings tocontinue making progress as an organization that is worthy ofDevelopment Goals for the creation of value that results in ayear period that began in April 2021. The agreement includes

shareholders, we will continue to buy back our stock, which

the trust of our customers and society. Two years ago, there

lower environmental impact. One example of our commitment

naming rights for the Nagai Stadium, which is now called theraises earnings per share.

was an incident involving quality at our group. I extend myis annual expenditures of about 700 million yen for combating

Yodoko Sakura Stadium. We proposed this name when we

Our guideline for the dividend is a consolidated payout ratio

sincere apology to customers, shareholders and others for

global warming, preventing pollution and other environmental

supervised the construction of a roof at this stadium. Bothbetween about 30% and 50%. Based on this policy, we paid

the trouble created by this problem. Restoring the trust of ourmeasures. Due to constant activities for conserving energy,

this football club and Yodogawa Steel use the sakura (cherry

a 75 yen dividend (35 yen interim dividend and 40 yen year-

stakeholders is now one of our most important tasks. We will

annual CO2 emissions of the Yodogawa Steel Group in Japan

blossom) as their symbol. Although the COVID-19 pandemic

end dividend) for the fiscal year that ended in March 2021,

continue to use numerous measures to accomplish this goal.

are now 154,000 tons, 40% below emissions in the reference

has temporarily prevented people from going out to enjoy

resulting in a consolidated payout ratio of 34.8%.

The new plant of Fukui Yodoko will start operating in the fiscal

year of 1990. Furthermore, solar panels at group companies

sport and other outdoor activities, I am certain that thisTo express our appreciation to shareholders for their support,

year ending in March 2022. Other large investments will bein Japan generate 6.43 million kWh of electricity every year,

stadium will be a valuable element of this area by hosting

we have upgraded our shareholder benefit program. We

needed as well, such as updates at our steel sheet plant. To

which prevents the creation of an estimated 3,568 tons ofmany events while also helping raise awareness of Yodogawa

increased the value of catalog gifts for shareholders and giveachieve the goals of our SAKURA 100 long-term vision, we

CO2 emissions.

Steel and our brands.

shareholders QUO prepaid cards with an original design towill be taking many actions while looking for new methods forcommemorate our partnership with Cerezo OSAKA. We will

doing business that are not restricted by our activities in priorcontinue to seek more ways to encourage people to become

years. I sincerely ask for the continued support andlong-term Yodogawa Steel shareholders.

understanding of all our stakeholders.

greenhouse gas emissions on a net basis by 2050. Thistarget has generated considerable interest in measures forconstantly collecting information about new technologies foris your policy for distributing earnings to
Q Whatshareholders?
Based on our dividend policy, we paid a

A dividend of 75 yen for the fiscal year ended
March 31, 2021.

accomplishing these goals and continuously studying ways towhat is your message to
Q Finally,
stakeholders?
are committed to being an organization
A We
that is trusted by our customers and society.
Since I became president of Yodogawa Steel, I have madeDividends per share
(Yen)

80

60

70

75

70

70

75

50

40

20

0

Solar panels at the Izumiotsu Plant

15

The Yodoko Sakura Stadium uses YODO Roof panels

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)

16Medium-Term Management Plan 2022

Overview of the Medium-Term Management Plan 2022

Major Initiatives of Business Segments
Steel Sheet
Business

Positioning of the Medium-Term Management Plans
FY
2019

FY
2020

FY
2021

FY
2022

FY
2023

Medium-Term
Management Plan
2022

Medium-Term
Management Plan
2019

FY
2024

FY
2025

3rd
Medium-Term
Management Plan

Continued work on the specifications for replacements of major production lines

FY3/27-FY3/36

Long-Term Vision
SAKURA 100
A graceful cherry tree
A company able to adapt
to a variety of changes
in market conditions

Preparation
periodApproach run
periodFinalization
periodStructure building
Policy review/execution

Start of actions

Solidifying results

A blossoming company
A company that takes on
the challenge of entering
new business fields

SAKURAA successful company
that is admired andrespected worldwide

Medium-Term Management Plan 2022 Objectives
Ordinary profit(consolidated)

Consolidated ordinary profit ofat least 9 billion yen (FY3/23)(Billions of yen)

At least

150
100

9 billion
yen

97.9

122.8
98.2
74.2

50

0

FY3/18(119th term)

17

FY3/19(120th term)

FY3/20(121st term)

FY3/21(122nd term)

FY3/22(123rd term)

FY3/23(124th term)

100-year company

FY
2018

Become a

FY
2017

Increased sales of highly-functional steel sheets that resist microbes, prevent static electricity andhave other properties

Building Materials
Business

Established a department exclusive for interior and exterior panels, improved order receipt andplacement operations and took other actions for rebuilding production and sales frameworks
Rebuilt the sales agent network for YODO Roof

Steel Sheet-Related
Business

Exterior Products
Business

Jointly developed an outdoor gear storage shed with outdoor brand Coleman Japan for a limited numberof sales to celebrate the 50th anniversary of the start of sales of YODO Monooki Storage Sheds
Progress on schedule with the transfer of production to Fukui Yodoko and for the start of mass productionof YODO Monooki Storage Shed Esumo in the second half of the fiscal year ending in March 2022

Overseas

Sales activities to enter new overseas export markets were suspended because of COVID-19
PPT in Thailand plans to start using new raw material suppliers on a trial basis in order to receive
reduced tariffs within the ASEAN

Roll Business

Reexamined production operations to become more profitable

Grating Business

Activities to sell grates in market sectors other than highways were successful in some categories• Although the impact of the COVID-19 crisis had been uncertain during
the fiscal year that ended in March 2021, the Yodogawa Steel Group
recorded an ordinary profit of 9,790 million yen. This accomplishment
was the result of cost cutting and the lower cost of energy in Japan, an
improvement in the earnings of SYSCO in Taiwan, a return to profitability
at PPT in Thailand, and other reasons.
• The global steel market is expected to remain uncertain and challenging
in the fiscal year ending in March 2022. All group companies are
dedicated to achieving the goals of the Yodogawa Steel Group MediumTerm Management Plan 2022. To become even more profitable,companies are establishing positions in new markets and increasing
sales of value-added products while taking full advantage of the speed
and agility that are a key strength of the Yodogawa Steel Group.

The Yodoko Sakura Stadium uses YODO Roof panels

The LMD-2215 Coleman storage shed to celebrate the 50th anniversary of
the launch of YODO Monooki Storage Sheds

18

Segment Overview

Steel Sheet-Related
Business
122nd term (actual)

YoY

139,479

Net sales

million yen

-2.1

%

(Millions of yen)

200,000
150,000 147,758 142,811

161,674 155,123

142,418 139,479

100,000

50,0000FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)

Operatingprofit (loss)

8,254

YoY

million yen

+39.9

%

(Millions of yen)

15,00012,96910,81810,000

8,254

7,181

6,052

5,898

5,000

19

Building Materials & Exterior Products Segment

Performance in the year ended March 31, 2021

Performance in the year ended March 31, 2021

•	
The volume of sales of galvanized steel sheets to specific high-demandcustomers in Japan increased because of measures to increase market share
while the iron and steel industry in Japan undergoes a reorganization. The
sales volume of pre-painted steel sheets for building materials was unchanged
as activities to increase market share were offset by a decline in the demandfor building materials. There was also no change in the sales volume of prepainted steel sheets for home appliances as a result of strong sales of home
appliances as people stayed home for safety during the pandemic.
•	In the general distribution category in Japan, orders were strong, particularly inthe distribution warehouse and drug store sectors. Sales were higher as sales
increased for both galvanized and pre-painted steel sheets.
•	In Taiwan, although COVID-19 pandemic impacted the performance of SYSCO,
earnings increased because of price revisions associated with an upturn in the
global steel market in the fiscal year’s second half. In China, YSS posted
record-high sales and in Thailand PPT was profitable due to a focus on
increasing sales in its core home appliance market.

•	In the building materials sector, sales of the YODO fire-proof panel Grand Wallincreased but lower demand caused by the pandemic brought down the sales
volume of roof products. The result was lower sales of building materials.

Outlook for the year ending March 31, 2022

122nd term (actual)

0

Steel Sheet Segment

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)•	Goal is building a stronger profit structure by adding new customers, productapplications and sales channels for sales growth and price revisions.
•	Overseas, SYSCO in Taiwan is establishing a base for stable earnings byreviewing manufacturing operations and becoming more efficient. In China, thegoals of YSS are more sales volume growth and profitability. In Thailand, PPT is
conducting sales activities to locate new users and using other measures forthe stability of its performance.

Initiatives for achieving the Medium-Term
Management Plan targets•	In the galvanized sheets category, activities are targeting demand by moving
quickly in response to shifts in the overall supply of these sheets. Receiving
orders while maintaining the proper balance between profitability and plant
capacity utilization is another theme in this business. For colored sheets, theprimary goals are adding new sources of demand by developing products for
specific requirements and creating ideas for highly distinctive new products.
•	We are dedicated to using the needs, suggestions and other input from ourcustomers to develop
products with substantial added value
and create more
applications for our
products. All these
activities are aimed
at making our brands
even more powerful.
Shutters are one category of
Yodoko’s exterior products

A home appliance using
Yodoko steel sheets

Reference Building Materials & Exterior Products Segment(Yodogawa Steel, non-consolidated)•	Sales of exterior products increased because of higher sales of storage sheds
and garages, which was attributable in part to demand associated with staying
home during the pandemic.

122nd term (actual)

YoY

Total
net sales

27,059-4.0

Outlook for the year ending March 31, 2022

Building
materials

8,143

-7.3

•	We expect an increase in the sales volumes of roofing products and exteriorwall materials mainly due to the outlook for firm demand primarily involving
large construction projects.

Exterior
products

16,139+3.0•	For exterior products, our goal is higher sales by using collaborations withother companies to add new sales channels for Yodo Monooki Storage Sheds
and offer more options for these sheds to cover a wider range of applications.

Construction

2,776

-25.7

•	Construction sales decreased as a smaller number of projects under construction offset completions of large projects for commercial, logistics and otherfacilities.

million yen

million yen•	In the construction sector, a number of planned projects have been delayed
and we are focusing activities on large projects where work has started.

Initiatives for achieving the Medium-Term
Management Plan targets%

million yen

million yen

Building materials(Millions of yen)%%

Exterior products

Construction

30,0002,828•	Rebuilding the sales framework for the core YODO Roof products in the building materials sector.
•	Concentrating on starting operations at Fukui Yodoko for rebuilding the production and sales frameworks for exterior products.

%

1,949

3,477

9,842

9,782

2,791

3,737

2,776

14,335 14,342 14,540 15,227 15,673 16,139
20,000•	The goals in the construction sector are to increase the use of the metal panels for commercial buildings and reinforce the sales framework in the Kanto
region.
10,0000

YODO Roof is used at
Osaka International Airport

10,33910,042

8,785

8,143

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)

YODO Garage Raviege Ⅲ

20

Segment Overview

Segment Overview

Roll Business

Performance in the year ended March 31, 2021

122nd term (actual)YoY

Net sales

2,368

-16.4

Operatingprofit (loss)

-412

—

million yen

million yen%

Outlook for the year ending March 31, 2022

Net sales(Millions of yen)

4,000

3,474

3,759

3,385

3,500

2,833

2,368

2,000

0

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)

Grating Business
YoY

3,543

Operatingprofit (loss)+1.8

million yen

174million yen%+116.4%

Net sales(Millions of yen)

4,000

3,550

3,672

3,547

3,554

3,481

3,543

2,000

0

21

•	We expect a recovery in the demand for rolls used in the iron and steel
industry because of higher steel output as automobile production
rebounds. We also plan to generate sales by submitting proposals formaintenance and other services to prospective customers.
•	In the non-ferrous industry, there is considerable interest in the utilization of our accumulated roll manufacturing technologies and we plan to
use this interest to capture new orders.

Initiatives for achieving the Medium-Term
Management Plan targets•	In the iron and steel industry, focus on increasing sales of value-added rolls.
•	In the non-ferrous industry, use our roll manufacturing technologies tocreate sources of demand in new market categories for rolls.

Performance in the year ended March 31, 2021

122nd term (actual)
Net sales•	The sales volume of rolls decreased because of a downturn in the
output of the iron and steel industry caused by the pandemic and thelonger roll replacement cycle.
•	In the non-ferrous industry as well, the sales volume of rolls was lower
as the pandemic pushed back investments in the paper industry to
update equipment.

•	Earnings increased because of the strong performance in public-works
projects in Japan, mainly for the core highway sector, and a sales
strategy of this business that placed emphasis on profitability.
•	The strong performance of the harbor and railroad categories contributed to sales and earnings.

Outlook for the year ending March 31, 2022•	We expect a higher volume of public-works projects in Japan, including
projects for safety during the pandemic, and no change in the volume ofcivil engineering projects. The grating business will continue to use avariety of sales activities in order to secure sales.
•	In response to concerns about significant increases in the cost of raw
materials, we plan to quickly revise prices of grating products as needed
and improve efficiency in order to maintain the profitability of this business.

Initiatives for achieving the Medium-Term
Management Plan targets
FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)•	Strengthen relationships with trading companies and take actions aimed
at increasing sales in markets other than the core highway sector.
• Continue to improve efficiency and maintain consistent profitability.

Real Estate &Other Businesses

Performance in the year ended March 31, 2021

122nd term (actual)YoY

Net sales

4,965

-6.9

Operatingprofit (loss)

1,069

+3.4

million yen

million yen%%

Net sales(Millions of yen)

6,000

4,430

4,351

4,823

5,241

5,333

4,965

3,000

0

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21(117th term)(118th term)(119th term)(120th term)(121st term)(122nd term)

Topics•	Real estate sales increased because of a higher occupancy rate at
tenant-oriented buildings.
•	Engineering sales decreased as most operations were at plants in Japanand there were no overseas technical support operations because of thepandemic.

Outlook for the year ending March 31, 2022
•	Effectively utilizing properties remains the priority of the Real EstateBusiness.
•	The Engineering Business is focusing on sales activities to captureorders in the next fiscal year and afterward.

Initiatives for achieving the Medium-Term
Management Plan targets•	We plan to increase profitability in the Real Estate Business by utilizing
properties in the most effective manner possible.
•	Extending operations to new market sectors and providing technicalsupport services are the priorities of the Engineering Business to target
new demand.

Announcement of the launch of LMD-2215 Coleman storage shed to celebrate
the 50th anniversary of the launch of YODO Monooki Storage Sheds

We started manufacturing and selling exterior products in 1970 andcelebrated in October 2020 the 50th anniversary of the debut of
YODO Monooki Storage Shed.
To mark this accomplishment, we created the LMD-2215 Coleman
storage shed through a collaboration with Coleman, one of theworld’s largest producers of outdoor recreation products.
Demand for outdoor gear has been increasing in Japan. During the
COVID-19 pandemic, there has also been an upturn in demand
involving camping at home and barbecuing. A total of 2,000 of thesestorage sheds were produced.
The storage shed business will continue to create new products andtarget new uses for storage sheds in order to meet an even broader
range of customer needs.
22Status of Overseas Business

Status of Overseas Business

SYSCO Taiwan

PPT Thailand

Trade name: Sheng Yu Steel Co., Ltd.
Location: Kaohsiung, Taiwan R.O.C
Established: May 19, 1973
Chairman of the Board : Soichi Kitamura
Paid-in capital: NT$ 3,211.8 million
President: Colin Hsu
Business activities : Steel sheet manufacturing and sales
Number of employees : 483
Main facilities: 1 pickling line 2 cold rolling lines 2 galvanizing lines 2 color coating lines

Taiwan■Thailand■

Performance in the year ended March 31, 2021

Outlook for the year ending March 31, 2022

Performance in the year ended March 31, 2021

Outlook for the year ending March 31, 2022

• 	The economy of Taiwan was impacted by COVID-19 in the first half of the
fiscal year but the economy grew during the second half. Growth was
supported by increasing demand for semiconductors starting in the third
quarter and higher internal demand backed by government measures toencourage Taiwan firms operating in China to return to Taiwan.
• Sales	
to large customers in Taiwan that export products mainly to theUnited States were slow because of the pandemic. But SYSCO wasprofitable due to price increases that reflected a big increase in global steel
prices that started in the third quarter.
	
exports were held down during the first half of 2020 by trade• SYSCO’sprotectionism and the pandemic. But the sales volume increased in thesecond half along with the growth of demand as markets for steel products
recovered.

• 	Activities are under way at SYSCO to increase sales in Taiwan by raisingsales of value-added products and supplying products for more
applications. These measures include cooperation with subsidiary Yodoko
International Ltd. (YIL) to increase sales of construction products and salesof galvanized products used to make solar panel frames.
• 	The business climate for exports remains difficult because of U.S. tradeprotectionism. SYSCO will flexibly respond to changes in market conditions
to secure sales.
For sales and earnings growth, SYSCO is reexamining manufacturing• 	
operations and raising efficiency. In addition, there are activities for
restructuring the company’s management, developing new products andcreating ideas for new applications for SYSCO products.

• 	
Thailand enacted anti-dumping measures against inexpensive Chinese
galvanized steel coils and sheets due to U.S.-China trade friction and otherreasons. Although this created concerns about a higher cost of raw
materials, PPT maintained profitability by using new suppliers and quickly
taking other measures involving procurement activities.
• 	
The pandemic has increased demand for the replacement of home
appliances. PPT raised its sales volume by capturing a larger share of themarkets for pre-painted steel sheets for AC outdoor units, which is a new
application, and refrigerators. As a result, sales increased and PPT
achieved fiscal year profitability.

• 	Thailand’s imports of inexpensive steel products are increasing following
the end of the country’s anti-dumping measures that targeted pre-painted
steel sheets made in China, Taiwan and South Korea. Due to concerns
about price-based competition, PPT will conduct sales activities while
monitoring changes in prices in Thailand.
• 	Major goals of PPT are capturing a larger share of the AC outdoor unit
market, which is a new application, and establishing relationships with newcustomers. The company also plans to propose innovative ideas concerning
pre-painted steel sheets for building materials in order to sell these sheets
to more building material companies in Thailand.

YSS China
Trade name: Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd.
Established: October 28, 2011
Paid-in capital: USD 220 million
Business activities : Steel sheet manufacturing and sales
Main facilities: 1 galvanizing line 2 color coating lines23

Trade name
: PCM Processing (Thailand) Ltd.
Location: Amata City Chonburi Industrial Estate
Representative: Kosuke Takeoka
Established: April 1999
Number of employees : 122
Paid-in capital: THB 1,377.259 million
Business activities : Pre-painted steel manufacturing, steel sheet processing and sales
Main facilities: 1 color coating line 2 large leveler lines 1 sheet slitter

Location: Anhui, China

China

Chairman of the Board: Eichi Tanaka
and President■

Number of employees : 255

Performance in the year ended March 31, 2021

Outlook for the year ending March 31, 2022

• 	In the first half of the fiscal year, sales were slow because of disruptions inthe supply of electricity caused by heavy rain. Sales rose to an all-time highin the second half because of higher sales volume as economic activity in
China rebounded rapidly.
	of building materials were supported by the growth of orders for• Salesconstruction projects and from pig farmers, a sector where there is a large
volume of construction expenditures.
• YSS	 used joint activities with partners in China to increase sales of steel tohome appliance manufacturers in China.

• 	With prices of steel products climbing, YSS is aiming for year-on-year sales
growth by increasing sales of value-added products used for building
materials and orders from Japanese home appliance manufacturers in
China.
• 	To increase earnings, YSS plans to increase sales of value-added products,
use joint activities with Yodoko Building Materials (Hangzhou) Co., Ltd.
(YBMH) to supply products that competitors cannot match, and placeemphasis on profitability when accepting new orders.

TopicsYSS Awarded as an Outstanding Company
at the Hefei Economic and Technology Development Zone

Since starting operations in 2013, YSS has been manufacturing steel
sheets that are used mainly by the home appliance factories in China ofJapanese companies. In the building materials category, YSS and YBMH
have jointly received orders involving high-profile projects in China such as
the new Beijing Daxing International Airport and the Shenzhen World
Exhibition & Convention Center, which is one of the world’s largest facilitiesof this type. The increasing stature of YSS and the power of its brandresulted in record-high sales in the fiscal year that ended in March 2021.
Due to these accomplishments, YSS was chosen for a Growth ProgressAward by the Hefei Economic and Technology Development Zone
Management Committee. This recognition reinforces YSS’s commitment
to remaining a key member of the Yodogawa Steel Group in China.
24

A Base that Supports Value Creation (ESG Information)

Dedicated to coexisting with all of our
stakeholders, we are constantly
strengthening ESG activities.

Security

By creating value through the Yodogawa Steel Group’s core goals of safety, security,environment, and beauty, we are dedicated to accomplishing the Long-Term Vision ofcoexisting with all of our stakeholders and contributing to achieving a sustainable society.

SafetyISO 14001 Certified Business Sites
Environment

BeautyBusiness site

Environment
Basic Environmental Principles
Contribute to the preservation of theenvironment. Conduct business with respect
for the natural environment.

Basic Environmental Guidelines
1. Instill awareness of environmental preservation
Provide our employees and partner company employeeswith environmental education to increase awareness of environmental preservation and instill an action-oriented mindset.
2. Ensure consideration for the environment in ourbusiness activities
1)	In all of our business activities, we minimize the environmental impact while preventing pollution, conserving
resources, reducing energy use, streamlining logistics,
and reducing and recycling waste. (Preventing pollution:compliance with environmental laws and standards)2)	Minimize the environmental impact of waste materials
when developing products by improving durability, reusingmaterials, and utilizing materials that are easy to recycle.
3. Establish internal organizations
In order to pursue these objectives, strengthen environmental management organizations at the head office and allbusiness sites, while also implementing environmental preservation activities.

25

Our three steel sheet plants in Japan and the plants of three
consolidated subsidiaries overseas have environmental preservation activities to minimize the environmental impact of theiroperations. All of these plants have received ISO 14001 certification as part of efforts to manage and improve these activities.

Environmental Management System
Under our Basic Environmental Principles, we are advancing
initiatives to reduce our environmental impact. We created the
Yodoko Environmental Management System to address
regulations and requirements for protecting the environment
while increasing the speed and breadth of these activities. We
established an Environment Committee with the President aschairperson. Other members are the director in charge ofenvironmental issues and the environmental officers of every
division. This committee handles overall decisions on
fundamental matters concerning the environment. Additionally,
the committee regularly holds Yodogawa Steel Group
communication meetings to ensure widespread awareness ofenvironmental issues and initiatives.

Ichikawa Plant

June 2000

Osaka Plant

December 2000

Kure Plant

Energy Management Planning &Promotion Officer

SGS

150

PCM Processing (Thailand) Ltd. November 2013

UKAS

100

Purpose and objectives of environmental activities

Environmental Officers

Environmental Officers

Environmental Officers

Environmental
Management Personnel

Environmental Managers

Environmental Managers

Departmental/Division Managers

Environmental Activity Personnel

Environmental Managers

Reduce VOC emissions
Reduce usage of toxic chemicals
Environmentally conscious productand technology development

Consideration for theenvironment

Contribute to communities
Rigorous risk management

Combat Global Warming
To combat global warming, we are increasing efficiency by
upgrading equipment used for manufacturing while also
improving operations and using LED lights for peripheral equipment. For logistics, our activities include shifting to rail and

-26%

-28%

186

-30%

181

-37%

40%
cut

162

154

2019

2020

50

Reduce CO2 from manufacturing

Reduce the use of resources

Versus FY 1990

257
191

0

Reduce CO2 from transport
activities

Head Office Environmental
Management Group

Yodoko Group companies

Base year
250

Yodogawa-Shengyu (Hefei)
December 2015
High-Tech Steel Co., Ltd. (China)

Combat global warming

Consolidated (Japan)

300

200

Reduce environmentally
harmful substances

Offices Division

Pollution Prevention Officers
Energy Officers

JICQA

DNV∙GL

Create a recycling-oriented
society

Plants Division

CO2 emissions(1,000 t-CO2)

Reduce CO2 from offices

President
Director in charge ofEnvironmental Issues

Examining/certifying agency

December 2000

Sheng Yu Steel Co., Ltd. (Taiwan) December 1997

Yodoko Environmental Management System

Energy Management Officer

Date certified

marine transport and raising the capacity utilization ratio on
trucks and other modes of transportation. We are also encouraging all offices to moderate room temperatures (28ºC in summer and 20ºC in winter) and to use the “Cool Biz” (avoiding
business suits in summer) and other energy-saving programs.
In the fiscal year ended March 2021 (FY2020), we cut CO2
emissions by 40% and energy consumption by 40% (both vs.
FY1990).

1990

2016

2017

2018

(Base year)(Fiscal years)

Energy consumption

Consolidated (Japan)

(TJ)

6,000
Base year
5,000

Versus FY 1990

4,988

4,000
3,000

-31%

-32%

-33%

3,447

3,384

3,353

2016

2017

2018

40%
-38%

cut

3,088

3,010

2019

2020

2,000
1,000
0

1990
(Base year)(Fiscal years)

26

A Base that Supports Value Creation (ESG Information)

ESG Information

 reate an Environmentally Recycling-oriented
C
Society
The Yodogawa Steel Group in Japan is reusing as resources
the waste products created during production activities. Sludge
is recycled as a raw material for cement or utilized for its metal
content and used oil is recycled or used for supplemental fuel.
Slag is used for roadbed base layers. In FY2020, our total volume of waste materials was 78,000 tons. The reuse of wastematerials as a resource was about the same as in the previous
fiscal year.

66.8

65.3

62.1

62.1

62.1

80

93

86

86

78

78

0

2016

2017

48

48

2018

20
0

2019

2020 (Fiscal years)

Yodogawa Steel participates in the Voluntary Action Program of
the Japan Iron and Steel Federation. We have adopted theprogram’s goal of not allowing emissions to exceed FY2010
levels and we are lowering our VOC emissions. To date, wehave taken steps including upgrading the deodorizing apparatus
on our pre-painted steel sheet production lines and lowering
FY2020 VOC emissions to 30.4% below the FY2010 level.
VOC emissions and reduction rate

(Non-consolidated)

(t)

60

Base year

Versus

64

30.4%

40

2010

-32.8%-29.9%

43

45-33.5%

42-24.7%

48

cut

44

20

27
2016

2017

15

14

19

2018

2019

2020 (Fiscal years)

Combat global warming

40

Solar panels in SYSCO Taiwan

Environmental Accounting
We keep track of environmental preservation expenses as anindicator that helps us efficiently carry out environmental preservation initiative. We are committed to reducing our environmental impact so that we do not harm the environment throughour business activities.
Our environmental investments in FY2020 were 24 million yen,which included the installation of LED lights...
Total environmental expenses in FY2020 were 556 million yen,consisting of 17% for air pollution prevention, 25% for watercontamination prevention, and 36% for processing industrial
waste. These expenses were mainly for preventing pollution
and recycling resources.
Note: FY2020 numerical environmental data on pages 26 and 27 are preliminary
figures.

(10,000 m3)

20

To combat global warming, we are increasing efficiency by
upgrading equipment, switching to LED lights and taking otheractions for lowering energy consumption and CO2 emissions.
1) Reduced electricity consumption by increasing theefficiency of rolling mill exhaust fans.
2) Reduced electricity consumption by increasing the useof inverters and replacing conventional lights withenergy-efficient fixtures.

Electricity consumption

119

120

2016

2017

100

96

95

94

2018

2019

2020 (Fiscal years)

50
0Installed heat recovery steam generators on some3) production lines, as in the previous fiscal year.

CO2 emissions

2016

2017

12

12

11

2018

2019

2020 (Fiscal years)

 evelopment of Environmentally Conscious
D
Products
Development of heat insulating steel sheets
We guarantee total solar reflectance (TSR) of 25% or greater.
This is expected to yield benefits such as lowering indoor
temperatures and reducing electricity used for air conditioning.
We produced 11,842 tons of these sheets during 2020.
Development of GL steel sheets for solar panel mounts
By using GL steel sheets with high corrosion resistance and ahigher level of galvanization, we have contributed to increasing
the number of years that photovoltaic power generation
systems can remain in use.

Based on the Japanese government’s green energy policies, weinstalled solar power systems on the roofs of our plants in
September 2015. As of December 2020, these systems havegenerated a cumulative 2,707 MWh of power.

Photovoltaic power generation
(MWh)

600

533

555

524

509

565

2016

2017

2018

2019

2020 (Fiscal years)

400
200

(1,000 t)

120

15

Others(1,000 MWh)

150

15

10
0

20

60

Natural gas consumption

73

80

80

Reduce Environmentally Harmful Substances

80

(t)

0

Recycling rate

54

VOC emissions

(%)

120

56

In 2016 and 2017, SYSCO replaced production line equipmentwith machinery that holds down VOC emissions. In FY2019,
there were more activities to lower these emissions, including
the partial modification of production lines.

40

Total volume created

62

Reduce Environmentally Harmful Substances(consolidated)(Japan)(1,000 t)

40

On the roofs and grounds of our Osaka, Izumiotsu, and Fukui
Plants, and at group companies, we have installed photovoltaic
power generation systems that produced approximately 6,430
MWh of electricity in FY2020.
This photovoltaic power generation is expected to reduce
annual CO2 emissions by about 3,568 tons.

SYSCO’s Environmental Activities

60

Waste products, waste products with value,
and recycling rate
Volume recycled

Economical Utilization of Clean Energy

Topics

100

100

2016

2017

80

81

79

79

2018

2019

2020 (Fiscal years)

0

40
0

2010

(Base year)

27

2016

2017

2018

2019

2020

0

(Fiscal years)

28

A Base that Supports Value Creation (ESG Information)

ESG Information

Our Products Help Solve Social Issues

Chromate-free Products
Reduce the Use ofEnvironmentally Harmful
Substances

Major related SDGs

Contributing to Global
Warming Prevention
through Insulation
Solutions

Major related SDGs

Use of Yodogawa Steel Products
for Disaster Preparedness and
Mitigation

Major related SDGs

Innovative Exterior Products for
Healthcare Facilities

Safety Security Environment

Safety Security Environment Beauty

Safety Security Environment

Safety Security Environment

For our steel sheet products, we are developing chromate-freeplates as quickly as possible. These plates do not containhexavalent chromium, which is an environmentally harmful
substance, and therefore help us minimize the environmental
impact of our products.
In 2005, we completely removed chromate from products forcustomers in the electrical appliance industry. In 2007, we
became the first in our industry to start supplying chromate-freetreated steel sheets for roofing and siding (brand name Eco
Green) that can withstand severe weather.
YODO Hyper GL Color chromate-free pre-painted steel sheet
for building exteriors, which launched in January 2017, wasdeveloped based on the concept of long-term use that isfriendly to people and the environment. The product’s overall
durability was improved by reevaluating the pre-painting process, coating, and other items. Its 25-year warranty against
pitting has been very well received by customers. Going one
more step, we added a new YODO Hyper GL Color product inJanuary 2020 and started offering the 25-year warranty against
pitting (must be at least 500
meters from a seashore) on
all pre-painted steel sheetsfor exterior use.
As the pioneer of chromatefree treated steel sheets,
we will continue to meetthe demands of society
and develop innovative
products that can make aneven greater contribution to
reducing the environmental
impact of these sheets.

YODO fire-proof panel Grand Wall Hyper and YODO sandwich
panel Fine Panel Hyper, which are our core exterior wall products, increase heating and cooling efficiency with their superior
insulation properties. Additionally, these products use a special
steel sheet, based on YODO Hyper GL Color chromate-free
pre-painted steel sheet for outstanding thermal insulation andresistance to soiling and staining. This results in a further reduction in this product’s environmental impact. YODO fire-proof
panel Grand Wall Hyper has received fireproof certification as astand-alone exterior building material. This panel also has
superior resistance to wind pressure and earthquakes as well
as sound insulating qualities.
In recent years, with the growing awareness of environmental
problems, customers are placing more emphasis on environmental performance when selecting products. The superiorenergy-saving features of our highly functional metal siding help
fight global warming by reducing CO2 emissions.

Awareness of disaster preparedness in Japan has been
increasing because of a large number of earthquakes,
typhoons and other natural disasters. YODO Monooki Storage
Shed is an ideal way to be prepared. The YODO Kura Storage
Shed MD with thermal insulation and outstanding durability isideal for the long-term storage of food, water and other emergency supplies. For convenience, we have created a storage
shed lock that opens automatically without using a key during
an earthquake with an intensity of at least about 6. Many
options are available as well, such as partitions for using sheds
for changing clothes, a toilet, a solar panel, a rainwater collection tank or other purposes.
In all areas of Japan, local government agencies, schools, condominium associations and other organizations are using ourstorage sheds as part of their measures to be prepared fordisasters.
We will continue to develop products and create new applications in order to contribute to safety, security, the environment,
and beauty.

During the pandemic, there is an urgent need for performing
PCR and other COVID-19 tests at locations that are separate
from other sections of a clinic or other healthcare facility.
Separation allows performing many tests while preventing the
spread of infections.
In response to many requests for the use of our exterior products as COVID-19 testing rooms, we developed and started tosell a version for medical tests by adding a partition to the
YODO Kura Storage Shed MD. This model is used as a smoking space and for many other purposes. Adding a partition
facilitates testing with no direct contact between patients andhealthcare personnel. There is also an option with an opening
for the use of gloves when performing tests.
We are continuing to add applications for our storage sheds tocreate a safe and secure environment for testing and other procedures.

A YODO Monooki Storage Shed Erumo with a lockthat automatically opens after a strong earthquake
A building with YODO fire-proof panel Grand Wall

29

Major related SDGs

Mechanical earthquake
detector

A YODO Kura Storage Shed MD configured
for performing medical tests

A partition with an opening
for the use of gloves toperform tests

30

A Base that Supports Value Creation (ESG Information)

ESG Information

Social
Product Development Initiatives

R&D Philosophy

Steel Sheet and Building Materials & Exterior Products

In accordance with our basic philosophy of“Create value with new originality,”
our research and development activities
constantly take into account whether projects
do in fact have originality and generate newvalue. This ensures that safety, security,
the environment, and beauty are always
priorities when creating new products.

We pursue a basic policy of emphasizing thecustomer’s ideas, developing differentiatedproducts, ensuring safety and security, making
products environmentally friendly and durable,
and streamlining construction processes.

Creating value through business activities

Building
materials&
exterior
products

Steel sheets

Security
SafetyEnvironment
BeautyGrating

Rolls

We manufacture two major categories of steel sheet products.
The first category is steel sheets with specifications that meetthe requirements of manufacturers of electric appliances andbuilding materials. The second category is steel sheets that wesell through intermediaries for general-purpose building materials.
Sheets in the first category precisely match every customer’s
requirements and are produced by our technology development divisions at the Kure, Ichikawa, and Osaka Plants. Sheetsin the second category are made in collaboration with eachplant’s technology development division after research by the
Head Office development division determines market needs.
Our Head Office development division also handles thedevelopment of exterior products, building materials, and otherprocessed products. By combining our steel sheet, exterior,and building material development divisions, we can organicallylink the technology and expertise of these divisions beginningfrom the product planning stage. This allows us to develop
steel sheets with the ideal properties for processed products
and develop processed products that fully utilize the propertiesof steel sheets.
This development framework underpins our core strength,
which is integrated production extending from steel sheets tofinished products in order to ensure consistently high qualitythat allows people to use our products with confidence.

Segments
Steel Sheets

Building Materials and Exterior Products

We believe that the mission of every company is to develop
technologies and products that reflect changes in its markets
and society. This is why we are constantly taking on new R&D
themes and challenges. In the Steel Sheet Segment, R&D
activities extend from surface-processing technologies to colors,
shapes, safety and other characteristics of these sheets. To
keep up with changing needs, we will continue to fabricate
steel sheets while looking ahead to the next step of progress
involving innovation, durability, functions and other properties.

We verify the performance of our building materials by using
one of the most advanced testing facilities for this purpose inJapan. New products undergo tests before their release andwe continue to verify safety and other properties of existingproducts too.

Product Development Center (Osaka Plant)

A surface measurement instrument31

Coefficient of friction testing unit

Main test equipment∙ Fire resistance testing units (vertical and horizontal furnaces)∙ Water seal and wind pressure resistance testing unit ∙ Load testing units∙ Rain and wind testing unit
∙ Door opening-closing testing unit
∙ Hydraulic cylinder load testing unit
∙ Shutter opening-closing testing unit

Fire resistance testing unit (horizontal furnace)

Water seal and wind pressure resistancetesting unit

Door opening-closing testing unit

32

A Base that Supports Value Creation (ESG Information)

ESG Information

Product Development Initiatives

Roll and Grating Businesses
Roll Business
The development division at the Osaka Plant develops rolls for
section steel by having engineers and sales staff work together
to meet customer demands and provide follow up support. We
are developing systems for paper manufacturing rolls customized for Japanese clients
through our businessalliance with ANDRITZ
Küsters GmbH, a global
industrial machinery andprocess company basedin Germany.

Test calendar machine for paper making (gloss
finish)Grating Business
The development division located in Izumiotsu Plant has created a database from diverse information on customer needs andmany types of information from sales personnel. This divisiondevelops innovative products that are safe, durable, and aesthetically pleasing. We recently developed a type of grating that
includes an insect growth
inhibitor to function as ananti-pest barrier for gutters, ditches, and otherlocations.

Overseas Subsidiaries

Basic Policy for Quality Assurance

SYSCO’s technology development division performs R&D forsurface-treated steel sheets in order to quickly and precisely
respond to diversifying customer demands and market needs.
The technology development division’s prototyping laboratory is
the hub of this R&D and has acquired certification from the
Taiwan Accreditation Foundation (an official certification agency), which ensures the quality and reliability of R&D programs.
When evaluating the corrosion resistance, surface discoloration, and other properties of surface-treated steel sheets at
the prototyping laboratory, we are developing products quickly
by utilizing data from outdoor-exposure tests (to check weather
resistance under realistic conditions) along with test data fromvarious accelerated weathering testers.
A recent project is the development of highly durable Eco
Green products (chromate-free Al-Zn alloy-coated pre-painted
steel sheets for building materials) in order to withstandTaiwan’s high heat and humidity as well as the extreme environments in export destinations.
We will further upgrade functionality, including improving
scratch resistance and adding the self-cleaning features of
PVDF pre-painted steel sheets (fluororesin pre-painted steel
sheets), as we develop products that meet customer demands
and market needs.

Cyclic corrosion tester (CCT)

Based on the Yodogawa Steel Group Corporate Philosophy, andin order to meet customers’ expectations and trust, we haveestablished a quality management system in every businessdivision. We operate these systems effectively and are constantly
evaluating performance to seek ways to make improvements.
Our highest priority is adhering to rules, such as laws, contracts
with customers, and standards, while strengthening systems forpreventing and identifying defects and inadequacies.
Additionally, we have established a QMR* Committee and QMRWorking Group tasked with strengthening the overall quality
assurance framework of the Yodogawa Steel Group.
Members of these cross-divisional organizations are the quality
assurance managers of every division and group company.
Duties involve ensuring compliance with Guidelines forStrengthening Quality Assurance Systems (stipulated by industry
bodies), sharing and distributing quality-related information andexamples of initiatives to address quality issues, and carrying out
reciprocal quality audits among business sites.
*QMR: Quality Management Reinforcing

Yodogawa Steel Group Quality Assurance Framework
President
Director in charge of quality assurance (Corporate Planning Division Manager)
Secretariat
Yodogawa Steel Group QMR Committee
Chairperson: The President of Yodogawa SteelVice-chair: Director in charge of quality assurance
Members: Managing directors of each business site, Group company managers, etc.
Yodogawa Steel Group QMR Working Group
Supervisor: Director in charge of quality assurance
Members: quality assurance managers of each business site

Load testing33

Condensation circulation-type carbon
arc weathering tester

QUV weathering tester

Exposure testing area, southern Taiwan (Kenting, Pingtung County)34

A Base that Supports Value Creation (ESG Information)

ESG Information

Human Resources Development for Sustainable Growth

Human Resources Development
Basic Policy
By training and educating our people, we are realizing part of
our Corporate Philosophy, namely, to “take up the challenge toinnovate and expand based on the individual creativity of every
employee.”

Training Programs
We provide support for the career goals of our employees while
upgrading their skills and motivation through on-the-job training, which is centered on daily tasks, and off-the-job training,which utilizes internal and external resources. Furthermore, we
use online, e-learning, and other training programs to encourage employees to maintain a constant awareness of issues,
think by themselves, and take actions necessary to deliverproducts that meet the evolving needs of customers. Overall,our employee training programs are structured to give people
skills for contributing to progress involving society and thequality of life.
Main training programs
New employee
training

Fundamental skills training for new collegegraduate employees
On-the-Job Training (OJT)

Rank-based
Young employee training
training
Core employee training(including online
New manager training (early management phase)training)
Other training
programs

Power harassment prevention training (e-learning)
Online language training (English, Chinese)

New employee training

35

New manager training

Social Contribution Activities

 usiness Improvement Activities (JK Activities)
B(J: “jishu” meaning “voluntary”, K: “kanri”
meaning “management”)
Voluntary management activities in small groups that we call JK
Activities are used to make improvements concerning quality,
cost cutting, productivity, safety, the environment and otherthemes. Every year, we hold a JK Conference in Osaka thatbrings together people from group companies worldwide. Thisconference did not take place in the fiscal year ended March
31, 2021 because of the COVID-19 crisis.
Presentations are made at
the JK Conference toprovide opportunities tostudy examples of initiatives that we can leverage
to improve business practices. We utilize thesetypes of activities for thegrowth and self-realization
for all employees.
Yodogawa Steel Group JK Conference

Diversity
We hire people regardless of gender, nationality, or disabilities.
Similarly, we aim to be a company with a broad array of values
and a global outlook that enables us to contribute to cities,
lifestyles, and society in general.
We believe that establishing a work environment conducive toenergetic participation will stimulate the growth of employeeswith diverse talents and values while also increasing corporate
value. One key component of this objective is encouraging theparticipation of women. We have created a hiring goal to makewomen 20% of our college-graduate career-path personnel.
Furthermore, we provide language and other types of training
programs in order to increase the number of career-path
women.

 onations to Charities Using Shareholder
D
Benefits
Donations by shareholders of record on March 31, 2020 who
selected a charitable donation from among the items in theshareholder benefits catalog were as follows. We are very
grateful to these shareholders for their generosity.
The following donations were made in November 2020 in thename of the Yodogawa Steel Works, Ltd. (Shareholder Donation
Account).
Total donations: 186 shareholders 649,000 yen
UNICEF: 53 shareholders 166,000 yen
The Japanese Red Cross Society: 70 shareholders 285,000 yen
Ashinaga Foundation: 63 shareholders 198,000 yen	Transfer to donations from shareholders who did not apply forshareholder benefits: 732 shareholders 2,395,000 yen*Donations for UNICEF, the Japanese Red Cross Society andAshinaga Foundation

Opening the Yodoko Guest House to the Public
The Yodoko Guest House was designed by Frank Lloyd Wright,
lauded as one of the preeminent architects of the 20th century,and built as a vacation villa for the eighth-generation sakebrewer Yamamura Tazaemon of Nada, Kobe. We have owned it
since 1947. This villa is designated a National Important
Cultural Property by the Japanese government and, since
1989, we have opened it to the public as part of our social contribution activities.

Yodoko Guest House (former residenceof the Yamamura Family)

Dolls are displayed at the guest house tocelebrate Hinamatsuri (Girls’ Day) in March ocial Contribution Activities at Overseas
S
Subsidiaries
SYSCO Taiwan•	Roadside flowers planted by employee volunteers
As part of highway beautification programs, we started voluntarily
establishing, in 1998, roadside flower beds along a national highway
near a business site. We are participating in urban beautification
projects as one way to enhance the reputation of Yodogawa Steel.

• Support for community arts and culture
In order to support education and the quality of life of communities as
a company deeply connected to areas where we operate, we havebeen making donations to the Kaohsiung Municipal Social Education
Center in Taiwan since 2011. These donations are one part of ouractivities to support community art and cultural programs.

SYSCO Taiwan and PPT Thailand• Donations to neighborhood schools
At SYSCO, one of our social contribution activities was the donationof safety gear to schools in the Siaogang district in 2017 for use by
children and supervising adults to ensure their safety. In Thailand,
PPT is participating in a scholarship project to support education atelementary schools to contribute to communities.

Children in the Taiwan city of Kaohsiung use safety gear donated by SYSCO

36

A Base that Supports Value Creation (ESG Information)

ESG Information

Governance
Basic Philosophy
In order to achieve sustainable growth and increase corporate
value over mid- to long-term, we have a variety of initiatives thatreflect the standpoints of all stakeholders (shareholders, customers, business partners, employees, and communities) while
positioning transparency, fairness, and prompt and courageousdecision-making as the objectives of our corporate governance.

Corporate Governance Structure
We emphasize nimble management suited to the scale of ourcompany and use the Audit & Supervisory Board governancestructure. Furthermore, we use the Executive Officer system inorder to maintain a proper degree of distance between
Directors’ oversight/decision-making and business execution.
This system also maintains unity, from the standpoint of sharing
information, concerning management decisions and business
operations.
In order to maintain a Board of Directors with a dynamic struc-ture and one that is optimal with regard to clarifying management
responsibilities and responding to changes in the businessenvironment, Directors are elected for one-year terms and the
Yodogawa Steel Articles of Incorporation limit the number of
Directors to no more than seven. By electing Directors with differing backgrounds and knowledge, we aim to ensure an
appropriate size and diverse composition of the Board of
Directors while facilitating more energetic, constructive, andengaging discussions during meetings. Additionally, in order tostrengthen the transparency of oversight and decision-making
processes, we appoint Independent Outside Directors whomeet the Tokyo Stock Exchange’s criteria for independence. As
of June 30, 2021, there were six Directors including three
Independent Outside Directors.
For the Audit & Supervisory Board, the Companies Act and the
Yodogawa Steel Articles of Incorporation stipulate that we haveno more than four Audit & Supervisory Board Members, with atleast half being Independent Outside Audit & Supervisory Board
Members.

Directors and Audit & Supervisory Board Members (as of June 22, 2021)
Directors

Satoshi Nitta

Toshio Kumamoto Tadashi Hattori

Mitsuaki Yuasa

Sadato Kobayashi Katsuyuki Kuse

President andRepresentative Director

Director, Managing Executive
Officer

Director (Independent
Outside Director)

Director (Independent
Outside Director)

Director, Managing Executive
Officer

Director (Independent
Outside Director)

Audit & Supervisory Board Members

History of corporate governance reforms

37

June 2003

Yodogawa Steel started one-year terms for Directors in order to build a dynamic structure for the Board of Directors and one that is optimalfor clarifying management responsibilities and responding to changes in the business environment.

June 2004

Yodogawa Steel adopted the Executive Officer system, reducing the number of Board of Directors members from no more than 18 to no
more than seven. The purposes are to have a measure of distance between Directors’ oversight/decision-making functions and businessexecution functions, to increase the strength and efficiency of the oversight functions of the Board of Directors, and to increase the speedof business operations.
After terminating the Directors’ retirement benefits program, Yodogawa Steel established a stock option (stock-based remuneration)
program for Directors and Executive Officers. This program raises the commitment and motivation of Directors and Executive Officers toincrease sales and earnings as well as the stock price.

June 2006

One Outside Director was elected in order to facilitate energetic, constructive, and engaging discussions during Board meetings while also
strengthening the transparency of oversight and decision-making processes.

June 2015

The number of Independent Outside Directors increased to two in order to facilitate more energetic, constructive, and engaging
discussions during Board meetings while also strengthening the transparency of oversight and decision-making processes.

December 2015

Following the adoption of a corporate governance code in Japan, the Yodogawa Steel Corporate Governance Guidelines were establishedas the highest set of regulations after the laws and regulations of Japan and the Yodogawa Steel Articles of Incorporation.

June 2018

In order to further strengthen governance, a third Outside Director was added to the Board of Directors, resulting in seven Directors, threeof whom are Independent Outside Directors.

June 2019

A female Outside Audit & Supervisory Board Member was elected in order to facilitate more energetic discussions from diverse
perspectives at Board of Directors meetings.

Shiro Morioka

Kazuki Miyajima

Miho Ishihara

Ritsuko Watanabe

Audit & Supervisory Board
Member (full-time)

Audit & Supervisory Board
Member (full-time)

Audit & Supervisory Board
Member (Independent
Outside Audit & Supervisory
Board Member)

Audit & Supervisory Board
Member (Independent
Outside Audit & Supervisory
Board Member)

FY2020 (Directors and Audit & Supervisory Board members as of June 22, 2021)
Attendance by Outside Directors and Outside Audit & Supervisory Board Members
Name

Attendance at Board of Directors meetings

Attendance at Audit & Supervisory Board meetings

Mitsuaki Yuasa

14 of 14 meetings—

Sadato Kobayashi
Katsuyuki Kuse

Elected at the General Meeting of Shareholders held on June 22, 2021
Elected at the General Meeting of Shareholders held on June 22, 2021

Miho Ishihara

14 of 14 meetings

17 of 17 meetings

Ritsuko Watanabe

11 of 11 meetings

13 of 13 meetings*Ms. Watanabe was elected as an Outside Audit & Supervisory Board member at the General Meeting of Shareholders held on June 23, 2020

38

A Base that Supports Value Creation (ESG Information)

ESG Information

Background of Outside Officers / Reason for Election

Analysis and Evaluation of Effectiveness of the Board of Directors

Mitsuaki Yuasa

Miho Ishihara

Sep. 1973
Jun. 2006
Jul. 2006
Jun. 2008
Nov. 2008
Jun. 2009
Jun. 2016

Oct. 1996
Jan. 2002
Feb. 2006
Apr. 2009

Registered as Certified Public Accountant
Retired from KPMG AZSA & Co. (currently KPMG AZSA LLC)
Opened Mitsuaki Yuasa CPA Office (current)
Outside Audit & Supervisory Board Member of Yodogawa Steel
Outside Member of the Board of WORLD Co., Ltd.
Outside Audit & Supervisory Board Member of Sojitz Corporation
End of term as Outside Audit & Supervisory Board Member of
Yodogawa Steel
Jun. 2018 Outside Director of Yodogawa Steel (current)
Reason for Election
As a certified public accountant, Mr. Yuasa has considerable expertise involving
finance and accounting. He has experience as an outside officer of a publicly
owned company and can use his knowledge and experience for the
management of Yokogawa Steel.

Sadato Kobayashi
Apr. 1974

Joined Mitsubishi Resin Corp. (currently Mitsubishi Chemical
Corporation)
Apr. 2010 Executive Officer and General Manager of Nagahama Plant andSantou Plant of Mitsubishi Resin Corp.
Apr. 2011 Managing Executive Officer of Mitsubishi Resin Corp. and Managing
Executive Officer of Mitsubishi Chemical Holdings Corporation
Apr. 2015 Representative Director and Executive Vice President of Mitsubishi
Chemical Holdings Corporation
Apr. 2017 Advisor of Mitsubishi Chemical Corporation
Jun. 2019 Advisor of Japan Excel-Management Consulting Co., Ltd. (current)
Jun. 2021 Outside Director of Yodogawa Steel (current)

Joined Asahi & Co. (currently KPMG AZSA LLC)
Registered as Certified Public Accountant
Joined Protiviti Japan (currently Protiviti LLC)
Joined EY Advisory Co., Ltd. (currently EY Advisory & Consulting
Co., Ltd.)May 2010 Opened Ishihara Certified Public Accountant Office (currently
Ishihara Certified Public Accountant & Certified Public Tax
Accountant Office) (current); Joined Hibiki Audit Corporation(current)
Dec. 2010 Registered as Certified Public Tax Accountant
Jun. 2019 Audit & Supervisory Board Member of Yodogawa Steel (current)
Reason for Election
Ms. Ishihara is a certified public accountant and tax accountant and has
considerable experience as a consultant for internal controls and risk
management. She can use this knowledge and experience to further improvethe corporate governance of Yodogawa Steel.

Ritsuko Watanabe
Sep. 2007 Registered as attorney; Joined Hommachi Chuo Law Office (current)
Jun. 2020 Outside Audit & Supervisory Board Member of Yodogawa Steel(current)
Reason for Election
Ms. Watanabe is an attorney with the extensive knowledge and experience for
performing audits from an external and independent standpoint.

Yodogawa Steel asks all Directors and Audit & Supervisory Board Members to complete questionnaires in order to analyze
and evaluate the effectiveness of the Board of Directors. The following is a summary of the evaluation performed in FY2020.
1 Questionnaires

Scope

All 6 Directors and all 4 Audit & Supervisory Board Members

FormatAll responses are anonymous

Coverage

Board composition, roles of the Board, operation of Board meetings, status of corporate governance and other subjects

2 Analysis and evaluation results

3 Actions in response to the evaluation results

The Board of Directors is generally operating properly with regard
to its composition, roles, how meetings are held, corporate
governance and other items. As a result, the evaluation processconcluded that the Board of Directors is effective.
To further increase effectiveness, the following areas for
improvement were identified: more thorough discussions ofmanagement strategies and business plans, the more effective
implementation of risk management programs and succession
plans, and studies regarding the use of voluntary committees.

The fiscal year that ended in March 2021 was the first year of
the Yodogawa Steel Group Medium-term Management Plan
2022. This three-year plan will end in March 2023.
Based on the points that were identified by this evaluation, theinternal and external officers will conduct more open
discussions for the proper oversight of management in order toincrease the Board’s effectiveness for the further growth of the
Yodogawa Steel Group’s corporate value.

Diagram of governance structure

Reason for Election
Mr. Kobayashi has many years of management experience at a publicly owned
company, including the supervision of overseas companies, and considerable
experience and knowledge concerning manufacturing and manufacturing
technology. This expertise can be used for the management of Yodogawa Steel.

Katsuyuki Kuse
Apr. 1991 Registered as attorney, Joined Kansai Law & Patent Office
Aug. 1993 Joined Kudawara & Kuse Law Offices, Partner
Jun. 2009 Member of the Intellectual Property Center of the Japan Federationof Bar Associations (current)
Sep. 2010 Representative of Kudawara & Kuse Law Offices (current)
Jun. 2013 Instructor of Japan Intellectual Property Association (current)
Apr. 2019 Osaka Bar Association, Chairperson of the Intellectual Property
Committee
Jun. 2021 Outside Director of Yodogawa Steel (current)

General Meeting of Shareholders
ReportElection

Audit &
Supervisory Board Members(Audit & Supervisory Board)

Report39

Compliance & Risk Management Committee

ReportYodoko Hot Line
(whistleblowing system)

Working Group for Compliance& Risk Management
Compliance promotion

Auditing OfficeElection
Executive Committee(Executive Officers)

Audit
Accounting auditors
ReportReason for Election
Mr. Kuse has considerable experience as an attorney and extensive knowledge
about corporate law, particularly concerning intellectual property. He can use
this expertise to incorporate external perspectives in the management of
Yodogawa Steel.

Board ofDirectors(Directors)

Audit

Risk management promotion
Violation prevention &education

Internal audits
Whistleblowing

Company-wide
Committees

SurveysBusiness and Management Divisions
Arrows indicate elections, reporting, auditing,
instructions, surveys, whistleblowing, training, etc.

Employees

40Financial Information: Overview of Consolidated Results of Operations
Market environment

yen to 6,258 million yen.
Regarding sales the operating environment was very challenging in Japan and other countries because of the COVID-19
pandemic. Sales volumes in Japan and at Taiwan subsidiary
Sheng Yu Steel Co., Ltd. (SYSCO) were down in the first half ofthe fiscal year. In China, where the economy recovered quickly
from the COVID-19 downturn, the sales volume of Yodogawa
Shengyu (Hefei) High-Tech Steel Co., Ltd. (YSS) increased.
However, consolidated sales were lower than in the previous
fiscal year. For earnings, operating profit was higher in Japan
primarily because of cost-cutting measures and the lower costof energy. Although market conditions were challenging for all
overseas subsidiaries, there was a big improvement in theearnings of SYSCO in the fiscal year’s second half and theearnings of PCM Processing (Thailand) Ltd. (PPT), a subsidiaryin Thailand, improved. As a result, operating profit was higher
than in the previous fiscal year. Ordinary profit increased byabout the same amount as the increase in operating profit. In
non-operating income, there were foreign exchange gains but
gain on sale of investment securities decreased. A smaller loss
on valuation of investment securities, which is an extraordinary
loss, and other factors resulted in an increase in consolidated
profit that was larger than the increase in ordinary profit.
However, the earnings of SYSCO, which has a high percentage
of non-controlling interests, was a major reason for the higher
consolidated profit. Consequently, the increase in profit attributable to owners of parent was smaller than the increase inconsolidated profit.

In the fiscal year ended March 31, 2021, the Japanese economy
started to recover from the impact of the COVID-19 pandemic
because of economic stimulus measures by the Japanese government and other reasons. However, the economy began toweaken again in 2021 due to another state of emergency inresponse to a new wave of infections that started late in 2020and other effects of this crisis.
There was a significant slowdown of the global economy due tothe COVID-19 pandemic. In the United States, consumer
spending and capital expenditures recovered with the supportof additional economic measures by the new Biden administration. In China, the economy recovered at a moderate pace asinternal demand rebounded and exports and manufacturing
output increased.
The steel market in Japan was sluggish, but there were
improvements in some sectors, such as an upturn in demandin the non-residential construction category, including distribution warehouses. The overseas steel market has been unstablebecause steel production in China is increasing again along witha recovery in economic activity and exports of steel are growing.

Results of operations
The Yodogawa Steel Group’s net sales in the fiscal year
decreased 3,708 million yen to 150,358 million yen. Operating
profit increased 2,391 million yen to 7,880 million yen, ordinary
profit increased 2, 366 million yen to 9,792 million yen, andprofit attributable to owners of parent increased 2,395 million

Outlook

Returns to shareholders

The outlook for the global economy is becoming increasingly
uncertain because of the inability to predict when the COVID19 pandemic will end, prolonged U.S.-China trade friction andother reasons.
In Japan, although some sectors of the economy are recovering, there is still a long way to go until a significant percentageof the population has received COVID-19 vaccinations. The
outlook is therefore for a combination of progress and setbacks
concerning the pandemic and economic activity.
In the steel market, there are concerns about instability of thebalance between the supply and demand for steel for the time
being in Japan and other countries. As a result, the steel market is likely to remain difficult with an uncertain outlook.
The Yodogawa Steel Group anticipates a challenging businessenvironment. In all regions, our overseas subsidiaries continue
to be affected by protectionist measures amid an unpredictableand unstable environment for demand and expenses. To succeed in this uncertain business climate, all group companies
are dedicated to achieving the goals of the Yodogawa SteelGroup Medium-term Management Plan 2022. To become evenmore profitable, companies are establishing positions in newmarkets and increasing sales of value-added products while
taking full advantage of the speed and agility that are a key
strength of the Yodogawa Steel Group.

Distributing earnings to shareholders is one of the highest priorities of Yodogawa Steel. Earnings are distributed by paying dividends that reflect results of operations, repurchasing stock andin other ways. The basic policy for dividends that are in line with
our results of operations is to make payments that are stable
and continuous. Dividends also take into consideration the needfor funds for investments and other actions for increasing corporate value, the outlook for sales and earnings, the need tomaintain financial soundness, and other items. To pay dividends that reflect results of operations, the target consolidated
payout ratio is between about 30% and 50%. In addition, there
is a goal of paying an annual dividend of at least 50 yen per
share for each of the three fiscal years ended on March 31,
2021 and ending on March 31, 2022 and 2023.
The basic policy is to pay interim and year-end dividends. In
accordance with Article 459, Paragraph 1 of the Companies
Act, the Yodogawa Steel Articles of Incorporation state that dividends can be paid based on a resolution of the Board of
Directors, except in cases where stipulated otherwise by laws
and regulations.
The year-end dividend for the fiscal year that ended March 31,
2021 is to be 40 yen per share. With the interim dividend of 35
yen, this will result in a dividend of 75 yen per share for thisfiscal year.
There is currently no dividend forecast for the fiscal year ending
March 31, 2022. An announcement will be made promptly
once it becomes possible to announce a dividend forecast.

Net sales

Operating profit

Profit attributable to owners of parent

Total assets

Cash and cash equivalents at end of period(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Yen)

7,000

240,000

50,00080

160,000

150,358

154,066

7,880

8,000

6,258

225,997

201,125

Down

2.4% YoY

0

41

70

75

34,6585,489
80,00043,116

Dividends per share

4,000

Up

43.6% YoY

3,500

3,862

Up

62.0% YoY00

120,000

12.4% YoY40

25,000UpUp

24.4% YoY000

FY3/20FY3/21

FY3/20FY3/21

FY3/20FY3/21

FY3/20FY3/21

FY3/20FY3/21

FY3/20FY3/21(121st term)(122nd term)(121st term)(122nd term)(121st term)(122nd term)(121st term)(122nd term)(121st term)(122nd term)(121st term)(122nd term)42Consolidated Financial Statements

Financial Information

Consolidated Balance Sheet(Millions of yen)

FY3/20FY3/20FY3/21(as of March 31, 2020) (as of March 31, 2021)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims-operating
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets
43

32,65039,117—
8,652
15,406
4,145
12,216
4,496(131)
116,553

42,03541,2293,005
6,821
12,672
4,158
9,258
4,783
(147)
123,818

60,663(46,096)
14,566135,668(123,356)
12,312
19,001
91
(50)
41
802
11,838(11,069)769
47,49360,789(46,857)
13,931
136,185(124,722)
11,463
18,964
125
(62)
63
7,335
11,877(11,035)
841
52,599

1,641
1,641

1,752
1,752

34,778—234
424
35,437
84,572
201,125

46,865285
208
468
47,827102,179
225,997

Consolidated Statement of Income

FY3/21

FY3/20FY3/21(April 1, 2019 to March 31, 2020)(April 1, 2020 to March 31, 2021)

Net sales

154,066

150,358

Cost of sales

131,540

125,004

Gross profit

22,52525,354

Selling, general and administrative expenses

17,036

17,473Operating profit

5,489

7,880

Non-operating income

3,035

2,277

Non-operating expenses

1,099

366

Ordinary profit

7,425

9,792

Extraordinary income

295

14

Extraordinary losses

2,213

125

Profit before income taxes

5,507

9,681

Income taxes-current

1,782

3,329

Income taxes-deferred

236

(325)

Total income taxes

2,019

3,003

Profit

3,488

6,677

Profit (loss) attributable to non-controlling interests

(373)

419

Profit attributable to owners of parent

3,862

6,258

(as of March 31, 2020) (as of March 31, 2021)

Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term borrowings
Lease obligations
Income taxes payable
Provision for bonuses
Provision for product warranties
Other
Total current liabilities
Non-current liabilities
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for retirement benefits for directors (and other officers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets(Millions of yen)

10,582
2,340
640
23
250
923
—
4,748
19,50913,744
2,247
—
40
2,717
1,365
336
7,902
28,353

22
2,044
856
79
7,281
4,041
14,32433,834

26
5,579
856
52
6,907
3,911
17,33345,68723,22020,381
106,763(13,351)
137,014

23,22018,108110,835(12,091)
140,073

10,476
1,636
1,489
(578)
13,023224
17,029167,291
201,125

19,207
1,636
1,458
109
22,412
227
17,596
180,309
225,997

Consolidated Statement of Comprehensive Income(Millions of yen)

FY3/20FY3/21(April 1, 2019 to March 31, 2020)(April 1, 2020 to March 31, 2021)

Profit

3,488

6,677

Other comprehensive income(1,371)

9,675

Comprehensive income

2,117

16,35244

Consolidated Financial Statements

Financial Information

Consolidated Statement of Changes in Equity (April 1, 2020 to March 31, 2021)
Shareholders’ equity
Share
capitalBalance at beginning of period

23,220CapitalsurplusRetainedearnings

20,381 106,763(Millions of yen)

Accumulated other comprehensive income

TreasurysharesShare
Valuation
Total accumulated acquisition
Foreign
Total
difference on Revaluation currency Remeasurements
otherrightsshareholders’ available-for- reserve forof definedtranslation benefit plans comprehensive
equitylandsale securities
incomeadjustment(13,351) 137,014

10,476

Corporate Profile / Stock Information (as of March 31, 2021)

1,636

1,489

(578)

13,023

Noncontrollinginterests

224

Total net
assets17,029 167,291

Corporate Profile

Main Affiliated Companies

Company name Yodogawa Steel Works, Ltd.

Consolidated Subsidiaries

Established

January 30, 1935

Capital23,220,815,228 yen

Employees

1,233

Changes during period(2,185)

Dividends of surplus
Profit attributable toowners of parent(2,185)

6,258(2,185)

6,258

6,258

(1,068)(1,068)(1,068)

(12)

30

18

18

Cancellation oftreasury shares(2,298)

2,298

—

—

Purchase of sharesof consolidated
subsidiaries

37

37

37

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during period
Balance at end of period

8,730—
23,220(2,273)

4,072

18,108 110,835

1,260

(30)

688

9,388

3

567

9,959

567

13,018

3,059

8,730

—

(30)

688

9,388

3

(12,091) 140,073

19,207

1,636

1,458

109

22,412

227

Consolidated Statement of Cash Flows(Millions of yen)

FY3/20FY3/21(April 1, 2019 to March 31, 2020)(April 1, 2020 to March 31, 2021)

Cash flows from operating activities

5,927

17,149Cash flows from investing activities(1,407)(4,672)

Cash flows from financing activities(2,265)(3,998)87(19)

Net increase (decrease) in cash and cash equivalents

2,341

8,457

Cash and cash equivalents at beginning of period

32,31634,658

Effect of exchange rate change on cash and cash equivalents

Cash and cash equivalents at end of period
45

17,596 180,309

34,658

43,116

Major Offices & Plants
Head office

4-1-1, Minamihonmachi, Chuo-ku, Osaka
541-0054, Japan+81-6-6245-1111

Tokyo branch

1-3-7, Shintomi, Chuo-ku, Tokyo
104-0041, Japan+81-3-3551-1171

Sales offices

Sapporo, Morioka, Sendai Regional, Niigata, Nagano,Takasaki, Tokyo Regional, Yokohama, Shizuoka, Hokuriku,
Nagoya Regional, Osaka Regional, Kobe, Okayama,
Hiroshima Regional, Takamatsu Regional, Kochi, Yahata,
Fukuoka Regional, Kagoshima, Okinawa

PlantsTakada Kozai Kogyo Co., Ltd.

Steel sheet processing, sales, andwarehousing

Sheng Yu Steel Co., Ltd.

Steel sheet manufacturing and sales

Yodoko Shoji Co., Ltd.

Steel wholesaling and transportation

Keiyo Tekko Futo Co., Ltd.

Distribution and warehousing

Yodoko Kohatsu Co., Ltd.

Golf course and other management andreal estate leasing

Yodogawa-Shengyu (Hefei)
High-Tech Steel Co., Ltd.

Steel sheet manufacturing and sales

PCM Processing (Thailand) Ltd. Pre-painted steel sheet manufacturing,processing, and sales
Fukui Yodoko Co., Ltd.

Manufacture and processing of exterior
products and other activities

Equity-Method Affiliated Companies
Sadoshima Corporation

Steel wholesaling

Osaka (Osaka prefecture), Kure (Hiroshima prefecture),
Ichikawa (Chiba prefecture), Izumiotsu (Osaka prefecture),
Himeji (Hyogo prefecture)

Principal Shareholders
Name

Shares Owned Shareholding Ratio(Thousands of shares)(%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,425

4.90

Resona Bank, Limited.

1,068

3.67

Mizuho Bank, Ltd.

1,062

3.65

Yodoko Partners’ Shareholding Association

996

3.42

Nippon Life Insurance Company

618

2.12

Custody Bank of Japan, Ltd. (Trust Account)

613

2.10

POSCO

600

2.06

JFE Steel Corporation

587

2.02

Sadoshima Corporation

571

1.96

Nippon Paint Industrial Coatings Co., Ltd.

547

1.88

Notes: 1. Treasury shares (5,763,858 shares) held by Yodogawa Steel are not included in this list ofmajor shareholders.
2. Shareholding ratios do not include treasury shares (5,763,858 shares).

Share Ownership by Category
Securities
corporations

Other companies
in Japan

1.20%

23.81%

Individuals
and others

15.13%

Treasuryshares

16.54%
Overseas
investors

19.83%

34,837,230
sharesFinancial
institutions

23.49%
46

Shareholder Reminders
Account closing date

March 31

Ordinary general meeting ofshareholders

June

Record dateOrdinary general meeting of shareholders,
year-end dividend March 31
Interim dividend September 30
Other dates shall be in accord withpre-announced schedules.

Number of shares per trading unit 100 shares
Shareholder registryadministrator & special account Mizuho Trust & Banking Co., Ltd.
administrator
Address of shareholder
registry administrator's
office of operations

1-2-1, Yaesu, Chuo-ku, Tokyo 103-8670,
Japan, Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department

Method of public noticeElectronic notice
Please see our website
https://www.yodoko.co.jp/english/

Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department Contact
Tel
OnlinePostal address

Yodogawa Steel Works, Ltd.
4-1-1 Minami-honmachi, Chuo-ku, Osaka
541-0054, Japan
Tel. +81-6-6245-1111 (main switchboard)
https://www.yodoko.co.jp/english/

0120-288-324 (toll free in Japan)
https://www.mizuho-tb.co.jp/daikou/
Stock Transfer Agency Department
Mizuho Trust & Banking Co., Ltd.
2-8-4 Izumi, Suginami-ku, Tokyo 168-8507, Japan

Procedures Regarding Stock
Stock handling procedures differ depending on whether shares are held in asecurities brokerage account or in a special account. Please see below forwhom to contact in each case.

Shares held in a securities brokerage accountProcedures and information

Contact∙ Selling or purchasing odd-lot shares∙ Change of name, address, etc.
∙	Changes in method of dividend receipt andSecurities brokerage managing youraccount

payment∙ Information on mail and returned mail∙ Information on unpaid dividends*∙ Information on other stock handlingprocedures

Shareholder
registryadministrator

Mizuho Trust &Banking Co., Ltd.
Stock Transfer
Agency Department

Shares held in a special accountProcedures and information∙ Selling or purchasing odd-lot shares∙ Change of name, address, etc.
∙	Changes in method of dividend receipt andpayment∙ Information on mail and returned mail∙ Information on unpaid dividends*∙	Information on other stock handlingprocedures

Contact
Specialaccount
managementadministrator

Mizuho Trust &Banking Co., Ltd.
Stock Transfer
Agency Department

Shareholder
registryadministrator

Mizuho Trust &Banking Co., Ltd.
Stock Transfer
Agency Department*	Payment of unpaid dividends can be handled at the Mizuho Bank, Ltd. Head Office or at
one of the branch offices.