Securities code: 5451

Yodogawa Steel Works, Ltd.

YODOKOREPORT
121st Term Report
April 1, 2019-March 31, 2020

To Our Stakeholders

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

1935
Established the company in Osaka (at thelocation of the current Osaka Plant) on
January 30 for the production and sale ofsteel sheets and other products

1935

1954
Constructed Kure
Plant formanufacturing coldrolled steel sheets
and other products

1951
Constructed Izumiotsu
Plant for manufacturing
steel products

1951

1964 Started manufacture of
pre-painted steel sheets
1963
Started operating a continuous
hot-dip galvanized steel sheet line

1965
Started manufactureand sales of building
materials

1965

anindustry
first

1972 Constructed Ichikawa Plant for manufacturingcold rolled steel sheets and other products
1986
Started manufacture of galvalume steel sheets

1970
Started manufactureand sales of exterior
products

1994 Made Sheng Yu Steel Co., Ltd.
(Taiwan) a subsidiary

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

1999 Established PCM Processing(Thailand) Ltd. in Thailand

1970

1994

2007
Started salesof chromate-free prepainted steel sheets forroofing and siding

2011

A History Shaped by
the Constant Pursuitof Value Creation

Yodogawa Steel Group Corporate Philosophy
Basic Philosophy

Create Value with New Originality
The Yodogawa Steel Group declares its basic
philosophy to be, “Create Value with New Originality,”
centered on surface-treated steel sheets with thegoal of being a valued, needed company that has
earned the trust 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 up the challenge
to innovate and by expanding based on theindividual creativity 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 generous support.
The business climate for the Yodogawa SteelGroup is extremely challenging because of thenovel coronavirus disease (COVID-19) which
originated in Wuhan, China at the beginning of2020 and subsequently spread worldwide. The
prevention measures in the major affected
countries including Japan, triggered a huge
slowdown in the global macroeconomy.
In the steel industry, although economic activity
remains lackluster globally, there is significant
steel production in China, which restarted
economic activity relatively quickly. However, theoutlook remains very uncertain in part because ofconcerns about the possibility of a steel supplydemand imbalance caused by the large volumeof steel production in China.

We completed our three-year Medium-Term
Management Plan 2019 in March 2020 and
immediately started the Yodogawa Steel Group
Medium-Term Management Plan 2022, which willend in March 2023. The new plan has three core
strategies: use speed and agility to build astronger profit structure; take on the challenge ofentering new business fields; and establish afoundation for sustainable operations. We arepositioning the next three years as an “approachrun period” when we take actions for making ourlong-term vision a reality.
We sincerely ask for your continued support andguidance.
June 20202

1Business segment sales

Our Position in the Iron and Steel Industry

Real Estate& Other

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

Steel Sheet Segment

1 Raw materials

1

Pickling

2

Cold rolling

3

Continuous galvanizing

4

2.3%

Pre-painted
steel sheets

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

92.4%

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 andthe manufacture of electric appliances andhousing equipment. Through the developmentof 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

Rolls

1.8%

Continuous color coating

Coal(Year ended March 31, 2020)

Gratings

Steel Sheet-related
Business

Limestone

3 Steelmaking

154,066 million yen

3.5%

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

0.6%

1.1%
97.9%

0.5%

102,602
million yen

China

A well-balanced network of production (Year ended March 31, 2020)
bases in Japan and 21 sales offices thatmaintain close relationships with customers
and with the region that each office serves.

Japan
Net sales by country and region

ThailandTaiwanOceania

North / Central /South America

0.7%

1.7%

Southeast
Asia

Other

0.6%

4.9%

China &
Hong Kong

4.2%

154,066

Oceania

3.0%

million yen

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

Net sales by country and region
Other

1,481

126

China

256

2,431

(Year ended March 31, 2020)

95.3%

Southeast
Asia

4.3%

78.3%

million yen

33,637
North /
Central /South America

Japan

Thailand

China

0.4%

6,595

70.6%

No. of employees by region

568

1.7%

China

Japan

(Year ended March 31, 2020)

Taiwan

Other

10.9%

17.4%

5

Sheng Yu Steel Co., Ltd.
(SYSCO Taiwan)

Net sales by country and region

Southeast Asia

TaiwanStarting 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.

Taiwanmillion yen(Year ended March 31, 2020)

Thailand

6.2%(Year ended March 31, 2020)

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

PCM Processing (Thailand)Ltd. (PPT Thailand)

Net sales by country and region
Other

Southeast
Asia

0.3%

99.7%

3,633
million yen(Year ended March 31, 2020)

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

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

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

Roll 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

03-06

P.

Grating Business

17-18

P.

We created a logo for Sakura 100, theYodogawa 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.

Establish a foundation
for sustainable
operations● Make substantial investments andimprove capital productivity for moreprogress and growth● Increase training programs for next
generation and organizational strength● Coexist with all of our stakeholders

We engage in the various activities of
product development, manufacturing,and sales while addressing safety,
security, the environment, and beauty,
and delivering diverse value to all of our
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● Provide a safe and secureenvironment conducive to
productive work
● Develop a team of people with
distinctive characteristics ofconstantly growing and taking
on new challenges

Societyandnature● Contribute to lower 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)

159,214

154,221

173,805

167,419

205,859

154,066

100,000

209,977
161,374

215,638
170,574

209,465
167,671

201,125
167,291

10,000125,000
58,99954,24462,90252,516

19,4049,125 10,218

8,273 9,505

8,658
1,933

0

1,232

-10,000-9,026-10,278005,927 4,519

2,500

1,250

2,425

2,402

1,157

2,422

1,196

1,156

Non-consolidated
2,431

1,204

1,195

-7,0930

FY3/17

FY3/18

FY3/19FY3/20FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/16

FY3/17

FY3/18

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

Operating profit
Ordinary profit
Profit (loss) attributable to owners of parent(Millions of yen)

13,168 13,763
12,284
10,856
9,829
8,444
7,425
7,360
7,302
6,734
5,879 6,254 5,489
3,862

Shareholders’ equity (consolidated)

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

150,000

Capital expenditures(Millions of yen)

137,149

143,241

151,586

150,236

150,037

FY3/16

FY3/17

FY3/18

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

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

(Yen)

250

247

224

Dividends per share

75,000

5,000

5,774
4,230

4,067

2,729

4,196
3,024

50

70

75

70

70

3,908

0

FY3/20FY3/16

FY3/17

FY3/18

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

4,500

5,112

Total dividends, treasury shares acquired (non-consolidated)
5,096

5,115

Total dividends(Millions of yen)

2,500
2,110
1,802
1,250

Treasury shares acquired

2,245

2,088

2017

2018

28
500

1,222

437

27

644

FY3/18

FY3/19FY3/20FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/16

FY3/17

FY3/18

FY3/19FY3/20(117th term)(118th term)(119th term)(120th term)(121st term)(117th term)(118th term)(119th term)(120th term)(121st term)(117th term)(118th term)(119th term)(120th term)(121st term)(Year)

(%)

40

31

665

510

62

58

22

705

20

302

0

FY3/17

29

760

295

FY3/162019

Investment
Environmental protection expenses
CO2 emission reduction
37(Millions of yen)

2,077

0

Note: Net assets per share for FY3/16 have been adjusted for a stock
consolidation.

2016

1,000

486

Note: Net income per share and dividends per share for FY3/16 have beenadjusted for a stock consolidation.

4

Environmental protection expenses,
CO2 emissions (reduction vs. FY1990 emissions*) (non-consolidated)

326

0

5
4

*Regular employees only

0

-90

8
6

0

2015

1,544
2,500

10

0

FY3/194,805(Hours)

2,224

2,241

FY3/18

(Yen)

7

3,660

FY3/17

131

125

6

FY3/16

Net assets per share (consolidated)
5,000

211

No. of employees using the child care leave system
Average monthly overtime
8.9
8.0
7.7

(People)12
6.9-2,771(117th term)

No. of employees using the child care leave system,
average monthly overtime* (non-consolidated)8.1

0-3,000Depreciation and amortization

10,000

0

9

2,452

FY3/16

Operating profit, ordinary profit,
profit (loss) attributable to owners of parent (consolidated)-125

Consolidated(People)-1,407-1,55945,358

No. of employees (consolidated, non-consolidated)

Cash flows from operating activities
Cash flows from investing activities
Free cash flow

(Millions of yen)

20,000

153,399

7,500

Net assets

250,000

200,000

15,000Cash flows from operating activities, cash flows frominvesting activities, free cash flow (consolidated)

Total assets, net assets (consolidated)

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(117th term)(118th term)(119th term)(120th term)(121st term)0* Under the Japan Iron and Steel Federation’s Voluntary Action Program (formulated in 1996), thecommitment was made to conserve energy in iron- and steel-making processes. A 10% reduction inenergy consumption was established as the goal for the 2010 fiscal year compared with fiscal 1990 levels.

10Interview with Top Management

What are the highlights or key points about

Q the performance of the business segments?
Aiming for steady progress towardbuilding an even more powerfulprofit structure
The Japanese economy was generally flat during the fiscal year ended
March 31, 2020 with activity slowing in many sectors, chiefly exports andmanufacturing. Many companies reported lower earnings as well. In the
global economy, there were signs of weakness in U.S. business activity
and economic growth rates declined in China, Asia and Europe. The
COVID-19 pandemic began to impact economies worldwide in February
and the outlook has become increasingly uncertain as a result.
The Yodogawa Steel Group’s net sales decreased by 8.0% to 154,066
million yen. Operating profit decreased by 6.6% to 5,489 million yen,ordinary profit decreased by 24.5% to 7,425 million yen, and profit
attributable to owners of parent was down by 38.2% to 3,862 million yen.
Our highest priority is to become more profitable. To accomplish thisgoal, we are taking full advantage of our speed and agility, which is oneof our key strengths, to enter new markets and increase sales of
products with significant added value.

In the Steel Sheet Segment, we announced price revisions inthe summer of 2019 for sheets for general distribution. We
also announced the launch of the YODO Hyper GL ColorYODO Hyper GL Color Series Kizashi panels are used at the Sanga Stadium by
Kyocera (Kyoto Stadium)

Series of pre-painted steel sheets for building exteriors. These
sheets come with a long-term warranty. In January 2020, we
added the YODO Hyper GL Color Series Kizashi, YODOHyper GL Color Color GL, and YODO Hyper GL Color Tafuron
to the YODO Hyper GL lineup. YODO Hyper GL Color
Kizashi, which has a frosted coating, has become one of ourmain products. I believe that adding Kizashi to the YODO

What is your assessment of the Group’s progress

Q during the Medium-Term Management Plan 2019?
identified issues to target during the next
A We
plan and made preparations for improvements.

Hyper GL lineup, which features a 25-year warranty against

During the Medium-Term Management Plan 2019, which

pitting, will greatly enhance our competitive edge.

ended in March 2020, we were unable to accomplish the

In the Building Materials & Exterior Products Segment, wegoal of a stable consolidated ordinary profit of 10 billion yen.

started selling the YODO-Garage Emerge II as our new

Ordinary profit was 12.2 billion yen in the plan’s first year but

flagship product. In addition, the new YODO Garage Raviege

below 10 billion yen the next two years. The main causes

III Dressed Option, which features an upgraded design,

were the higher cost of raw materials and trade protectionism

posted strong sales. Another highlight of this segment wasin overseas steel market. One of the biggest negative effects

the launch of two types of smoking cubicles to protect otherson our performance was the difficulty of Taiwan subsidiary

Q performance in the fiscal year ended March 31, 2020?

Furthermore, the sales volume of pre-painted sheets forfrom secondhand smoke following enactment of Japan’s

SYSCO to export products to the U.S., which is a large andhome appliances were lower due to slow sales of these

Revised Health Promotion Act.

profitable market for this company.

appliances. Outside Japan, the business climate continued toLate in 2019, we started the New Idea Photo Campaign for

The Medium-Term Management Plan 2019 had three coreand earnings were down, but our
A Sales
performance outside Japan improved.

be challenging for SYSCO in Taiwan. At YSS in China andbusiness partners involved with the sale, installation andstrategies: establish a strong profit structure, take on the

PPT in Thailand, faint signs of the beginning of andesign of our building exterior products. We received morechallenge of entering new business fields, and build a

improvement in profitability are emerging. In addition, YSS isthan 500 entries and the results of the judging werepowerful business foundation. There were numerous activities

During the fiscal year ended March 31, 2020, the steel

making progress with establishing relationships with newannounced on our website.

during the plan’s three years to determine and execute

market was generally weak in Japan and the overseas market

customers. One reason is the increasing market stature of

In the Roll Business, there were many activities to improvevarious initiatives. In the Building Materials & Exterior Products

was affected by the continuation of the U.S. trade

YSS as its steel sheets are used at large projects.

quality management in this business, as well as throughout our

Segment, we established Fukui Yodoko Co., Ltd. at unused

protectionism measures. Due to these market conditions, ourAt PPT, earnings are recovering mainly because of thegroup, in the wake of problems created by improper quality

land at our Fukui Plant for the purpose of restructuringconsolidated sales and earnings decreased.

increasing sales volume of value-added products like pre-activities in 2018. For example, in the spring of 2020 weexterior product manufacturing operations, which are

In Japan, our sales volume of galvanized steel sheets

painted sheets for air conditioners (AC) outdoor units.

developed and started to use a system for automatically rather

currently at the Osaka Plant. We will also relocate thethan manually entering measurement data in inspection tables.

production of the YODO Monooki Storage Shed Esumo andSatoshi Nitta President and Representative Director

What is your assessment of the Yodogawa Steel Group’s

decreased in part because of higher imports of these sheets.
11

products and other actions strengthened the lineup
A New
of products in the Steel Sheet-related Business.

12Interview with Top Management

Interview with Top Management

some other products to this new company, which plans toreexamining the plan’s quantitative goals and will announce

incorporate many energy conservation measures. And wesoundness, we make strategic investments for higher

start operations in October 2021. This move is expected torevisions at a later date.

were first in our industry to start making products without

productivity and lower costs for sustained growth.

improve the efficiency of production and logistics for these

One priority of the new plan is increasing the profitability ofhexavalent chromium and other environmentally harmful

Our guideline for the dividend is a consolidated payout ratio

products.

the Building Materials & Exterior Products Segment as much

substances. We will continue to place emphasis on

between about 30% and 50%. Based on this policy, we paid a

In the Corporate Planning Division, we established the New

as possible by shifting production to the new subsidiary Fukui

environmental programs in order to operate in a manner that70 yen dividend (30 yen interim dividend and 40 yen year-end

Business Promotion Team as a unit devoted exclusively to

Yodoko Co., Ltd. mentioned above and taking other actions.

reflects social needs.

dividend), resulting in a consolidated payout ratio of 53.4%.

studies concerning new businesses, I want this team to play

In the Steel Sheet Segment, we plan to improve the profitability

In February 2019, we reopened the Yodoko Guest House toa central role in transforming small but innovative ideas intoof sales to high-demand customers. Competition is intense in

the public after two and a half years of renovation work.

successful new businesses.

this market. We will add more value to our products, target

Unfortunately, we had to temporarily close the house because

niche and new market categories, and use other measures.

of COVID-19. Designed by the world-renowned modern

For general distribution sales, we plan to use the launch of thearchitect Frank Lloyd Wright, the house is designated an

YODO Hyper GL Color Series to increase sales. In the building

important cultural asset in Japan. Our plan is to make morematerials category, our plans include rebuilding the sales

improvements in operations by working with architects andframework for YODO Roof and other activities.

members of the community where the house is located.

Q

Please explain the main elements of the new medium-term management
plan and your activities in the fiscal year ending March 31, 2021.

profitability by relocating production
A Improving
operations is a major theme of the plan.

Finally, what is your message to

Q stakeholders?

are determined to use the Group’s strengths
A We
to achieve sales and earnings growth.
The business environment is challenging because of the
COVID-19 crisis. We are using all of the strengths of ourWhat is the policy for distributing earnings toshareholders?

Group in order to aim for higher sales and earnings. Our

plan to further upgrade the activities of
A We
the Yodoko Guest House.

on our dividend policy, we paid a dividend of
A Based70 yen for the fiscal year ended March 31, 2020.

shed and exterior products, as well as after-sales and otherupcoming actions to make the SAKURA 100 long-term vision

Today, companies unable to contribute to society cannot

Stable, continuous distributions to shareholders are one of

SAKURA 100 long-term vision a reality. I am confident thata reality. However, due to the extremely uncertain outlook

survive. This is why business activities and social responsibility

our highest priorities. Maintaining financial soundness is thewe will succeed at building an even more powerful profit

caused by COVID-19, we are now (as of April 1, 2020)are inseparable. For example, our manufacturing activities

core element of our policy for capital. While preserving thisstructure for the Yodogawa SteelThe Medium-Term Management Plan 2022 has the following
three core strategies: use speed and agility to build a stronger
profit structure; take on the challenge of entering new
business fields; and establish a foundation for sustainable
operations. This will be an “approach run period” forQ

Please tell us about your ESG initiatives.

Q

Dividends per share

Note: Dividends per share before September 2015 have beenadjusted for a stock consolidation.

(Yen)

80

60

70

75

activities go far beyond the supply of surface-treated steel
sheets to include a diverse array of products, such as storage
services. The Medium-term Management Plan 2022 is our“approach run period” for measures that will make ourGroup.
We sincerely ask for thecontinued support and7070

understanding of all
our stakeholders.

50

50

40

20

0

13

YODO Monooki Storage Shed Esumo

Yodoko Guest House

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(116th term)(117th term)(118th term)(119th term)(120th term)(121st term)

14

Major Initiatives of Business Segments

Medium-Term Management Plan 2019

Basic strategies

Entered new fields and established new sales channels produced some benefits.

Assessment of Performance During the Plan

Steel Sheet Business
Building Materials Business
Exterior Products Business・	As one step for increasing sales of ・	U sed aggressive sales activities to ・	Changed lineup of garage products invalue-added products, started sales in
steadily increase sales volume of theorder to meet diverse customer needs.
January 2020 of YODO Hyper GL
Hyper Panel Series that uses YODO ・	Revised prices of exterior products(average increase of 10%).
Color Series products with a 25-year
Hyper GL Color sheets.
warranty against pitting.
・	Added options to bicycle parking units
and YODO Kura storage shed for new・	Replaced post-painted steel sheets
applications.
with pre-coated, pre-painted steel
sheets and entered niche markets.

Performance in Relation to the Plan’s Targets
Earnings were below the targets in the plan’s second and third years primarily because of the higher cost of raw materials andenergy and the negative effect on the global steel market of trade protectionism and U.S.-China trade friction.

Medium-Term
Management Plan2019

Target

FY2017FY2018FY2019Stable consolidated ordinary profit of at least 10 billion yen

Results

12.2billion yen

9.8billion yen

7.4billion yen

Difference+2.2billion yen-0.1billion yen-2.5billion yen

Reason earnings were below the targets
Based on our analysis, the Group was capable of an annual consolidated ordinary profit of about 8 billion yen as of the end of
March 2020. This excludes one-time factors such as changes in inventory valuations, gains and losses on sales of financial
products, and foreign exchange rate movements. The Group’s core earning power must be about 12 billion yen for a consolidated
ordinary profit that is consistently at least 10 billion yen.
Components of earnings shortfall
12.0

12.0

billion yen
4.0

0

15

Target (Actual results)

Sales shortfall inJapan of strategic
growth products

Roll Business

Grating Business・	Used technology for papermaking rolls ・	Entered new fields by targeting theand conducted sales activities torailroad, energy and other sectors.
receive orders in the film manufacturingindustry.

Increased sales of highly functional building exterior products created through a strategic collaboration
between the steel sheet and building materials businesses.
In China, collaboration between the steel sheet and building materials businesses helped enablesubsidiaries to strengthen their brands by receiving orders for roofing steel sheets at two large projects:
Beijing Daxing International Airport and the Shenzhen World Exhibition & Convention Center.
Steel Sheet Business (overseas)・	Activities for increasing the number of customers and sales
volume for steel sheets for home appliances.

Take on thechallenge ofentering new
business fields

Building Materials Business (overseas)・	Used joint activities of YSS and Yodoko Building Material(Hangzhou) Co., Ltd. (YBMH) to capture large orders andstrengthen brands in China.

Gathered information for planning new businesses that can use existing technologies for exterior products
and building materials.
Established a department devoted exclusively to studies concerning new businesses.
Paid a stable dividend to distribute earnings to shareholders.

Build a powerfulbusinessfoundation(Billions of yen)

8.0

Establish a
powerful profit
structure(the strength to maintain consistent earnings regardless of changes in prices of steel
products, foreign exchange rates and other items affecting market conditions)-1.0 billion yen

Status of major initiatives

Increased the number of Outside Directors to three for stronger governance.
Elected female Outside Audit & Supervisory Board Members as one step for more diversity.
Established Fukui Yodoko Co., Ltd. for the relocation and restructuring of production and logistics for exterior products.

-1.5 billion yen
Effect of tradeprotectionism inoverseas markets-1.5 billion yen
Slow progress of
YSS China and
PPT Thailand
toward goals

8.0

billion yen

Actual earnings capability

A building with YODO fire-proof panel Grand Wall

YODO-Garage Raviege Ⅲ with rear shutter

Rendering of Beijing Daxing International Airport

16

Medium-Term Management Plan 2022
Business Strategies
Steel Sheet Business

Overview of Medium-Term Management Plan 2022

Assemble a sustainable logistics network centered on transporting cargo by ship.

Positioning of Medium-Term Management Plans
FY
2019

Medium-Term
Management Plan
2019

FY
2020

FY
2021

FY
2022

Medium-Term
Management Plan
2022

FY
2023

FY
2024

FY
2025

3rd
Medium-Term
Management Plan

Building Materials Business
FY2026-FY2035

Long-Term Vision
SAKURA 100
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

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

SAKURAA successful company
that is admired andrespected worldwide

100-year company

FY
2018

Make interior/exterior panels, a strategic product, more competitive.
Increase exterior panel sales volume by restructuring production and sales operations.
Stabilize earnings for metal roof products by reexamining sales operations.

Steel
Sheet-Related
Business

Exterior Products Business

Add more sales channels with the goal of ranking first in the storage shed market.
Redesign production and logistics operations for the production of many different items in small quantities.

Overseas

Target opportunities created by demand for surface-treated steel sheets, mainly in Asia.
・	Increase sales at all overseas business sites of value-added products for a competitive
advantage.
・ Assemble a sales network that is not vulnerable to the effects of trade protectionism.
・ Develop new overseas markets primarily by using SYSCO.

Strengthen collaboration and other ties between the steel sheet and building materials businesses.

Become a

FY
2017

Differentiate products from those of competitors by developing and increasing sales of innovative,
high-performance sheets.
Increase productivity and reinforce the infrastructure for business activities by replacing primary
production lines.

・ China YSS⇔YBMH
・ Taiwan SYSCO⇔YIL

Use a variety of schemes for raw materials in order to optimize procurement activities for ensuring
a stable and reliable supply of these materials.

Rebuild and reinforce quality assurance systems.

Roll Business

Create demand in new market categories for rolls.
Optimize order receipt and production processes.

Basic Strategies of Medium-Term Management Plan 2022
The new plan will use the following six basic strategic objectives in order to build on accomplishments of the primary actions of theprevious plan. Initiatives for making the long-term vision a reality are the highest priority.

Use speed and agility to build
a stronger profit structure

17■ Make the business model even more powerful.
■ Further upgrade manufacturing skills.

Take on the challenge ofentering new business fields■ Start new businesses based on existing business.

Establish a foundation forsustainable operations■ Make substantial investments■ Increase training programs ■ Coexist with all ofand improve capital productivity
for next generation andour stakeholders.
for more progress and growth.
organizational strength.

Restructure distribution channels.

Grating
Business

Capture orders from customers in new market categories for grating.
Improve the efficiency of production and shipping.

Real Estate Business

Real Estate &OtherBusinesses

Preserve and increase the value of office buildings.
Determine ways to utilize company-owned land.

Engineering Business
New Business

Seek opportunities to meet demand for steel sheet processing machinery (Africa, Southeast Asia).
Use the new business department to create new profit centers.
18

Segment Overview

Steel Sheet-Related
Business
121st term (actual)

YoY

142,418

Net sales

million yen

-8.2

%

(Millions of yen)

200,000

163,173
150,000

147,758 142,811

161,674 155,123

142,418

100,000

50,0000FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(116th term)(117th term)(118th term)(119th term)(120th term)(121st term)

OperatingprofitYoY

5,898

million yen

-2.5

%

15,00012,96910,81810,0007,181

19

Performance in the year ended March 31, 2020

Performance in the year ended March 31, 2020●	Overall sales to specific high-demand customers in Japandecreased. The sales volume of galvanized steel sheets
decreased in part because of the growth of imports of lowpriced plated steel sheets. The sales volume of pre-painted
steel sheets was unchanged for building materials anddown from the previous fiscal year for home appliances
mainly because of unfavorable weather in Japan.
●	In the general distribution category in Japan, orders werestrong, particularly in the distribution warehouses and drug
store sectors. Sales were higher as sales increased for both
galvanized and pre-painted steel sheets.
●	In Taiwan, the sales volume at SYSCO was down mostly
because of U.S.-China trade friction. Earnings improved at
YSS in China because of a review of its product lineup andat PPT in Thailand because of a focus on raising sales ofvalue-added pre-painted steel sheets for home appliances.

●	Sales of building materials decreased as sales activities
with priority on profitability brought down the sales volume.
●	Sales of exterior products were sluggish after the October
2019 consumption tax hike. But fiscal year sales of theseproducts increased because of price revisions in theprevious fiscal year, higher sales due to the rush to makepurchases before the consumption tax hike, and strong
demand for garages and products for secondhand smoke
safety.
●	Construction sales increased because of the completion ofseveral large projects, including the construction ofcommercial and logistics facilities.

●	To respond quickly to the market needs, we are using ournationwide sales network to raise awareness of the YODOHyper GL Color Series, which was launched in January
2020, and increase sales of these products.
●	Overseas, SYSCO plans to increase sales in Taiwan andestablish a presence in new markets. In China, YSS ismaking its brands stronger and using joint activities with
YBMH to increase sales. In Thailand, PPT plans to raise theshare of sales from value-added products.

Initiatives for achieving the Medium-Term
Management Plan targets(Millions of yen)0

Building Materials & Exterior Products Segment

Outlook for the year ending March 31, 2021

121st term (actual)

5,000

Steel Sheet Segment

6,052

5,898

3,450

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(116th term)(117th term)(118th term)(119th term)(120th term)(121st term)●	For galvanized sheets, focus on increasing sales in the
housing equipment and other new market sectors. For
colored sheets, the goal is adding new sources of demandby selling these sheets in more market sectors and creatingideas for highly distinctive new products.
●	To become more competitive, we are increasing cooperation
within the Group,
including overseas
subsidiaries andother locations
outside Japan.

A building interior with Yodoko
panelsAn appliance using
Yodoko steel sheets

Outlook for the year ending March 31, 2021
●	For building materials, our primary goal is receiving orders
based on the outlook for high level of demand for roofing
products and exterior wall materials for commercial andlogistics facilities.
●	For exterior products, we are starting operations at
subsidiary Fukui Yodoko Co., Ltd. with the goals ofenlarging sales channels and building a more efficient
production and logistics operations.
●	In the construction sector, receiving orders for large
distribution facilities for e-commerce companies is a priority.

Initiatives for achieving the Medium-Term
Management Plan targets●	Focus on restructuring the sales framework for YODO Roof,the main building materials product.
●	As part of measures to establish new sales channels forexterior products, focus on upgrading sales promotion
materials and increasing sales of YODO Storage Sheds and
YODO Large Storage Sheds.
●	For construction, the main goals are receiving more orders,mainly for projects that use YODO fire-proof panel Grand
Wall, and reinforcing sales framework in the Kanto region.

Reference Building Materials & Exterior Products Segment(Yodogawa Steel, non-consolidated)
121st term (actual)
Total
net sales

28,196+0.5

Building
materials

8,785

-12.5

Exterior
products

15,673+2.9

Construction

3,737

+33.9

The YODO bicycle parking unit can also
be configured as a smoking area

million yen%

million yen%

million yen

million yen

Building materials(Millions of yen)%%

Exterior products

Construction

30,0003,737
14,094 14,335 14,342 14,540 15,227 15,673
2,208

2,828

1,949

3,477

2,791

9,842

9,782

10,04220,00010,0000

YODO Hyper GL Color Series Kizashi

YoY

10,572 10,339

8,785

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(116th term)(117th term)(118th term)(119th term)(120th term)(121st term)

20

Segment Overview

Segment Overview

Roll Business

Performance in the year ended March 31, 2020

121st term (actual)YoY

Net sales

2,833

-19.1

Operatingprofit-311―

million yen

million yen%

Net sales(Millions of yen)

4,000

3,476

3,474

3,759

3,385

3,500

2,833

2,000

0

FY3/15

FY3/16

FY3/17

FY3/18

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

Grating BusinessYoY

Net sales

3,481

-2.0

Operatingprofit80-4.5

million yen

million yen%%

Net sales(Millions of yen)

3,510

3,550

3,672

3,547

3,554

3,481

2,000

0

21

Outlook for the year ending March 31, 2021
●	To prevent the reoccurrence of problems created by
improper quality activities, the supervision of productmeasurement data has been reinforced and all quality
management activities are more rigorous.
●	We expect lower demand in the iron and steel industry due
to declining production and the longer roll replacement
cycle. We plan to create maintenance service proposals forcustomers and use other activities to generate sales.
●	In the non-ferrous industry, we expect to receive rollreplacement orders in the paper industry and are using
many activities to add new market categories.

●	In the iron and steel industry, focus on increasing sales ofvalue-added rolls.
●	In the non-ferrous industry, use our accumulated roll
manufacturing technologies to create sources of demand in
new market categories for rolls.

Performance in the year ended March 31, 2020

121st term (actual)

4,000●	Sales were lower partly because of the effects of the quality
assurance problem that occurred in the previous fiscal year.

Initiatives for achieving the Medium-Term
Management Plan targets(116th term)

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(116th term)(117th term)(118th term)(119th term)(120th term)(121st term)

Real Estate &Other Businesses●	In the core highway category, sales were slow as
governments place priority on repairing damage to roads
caused by a series of natural disasters.
●	In the private sector, a focus on capturing demand inenergy and railroad projects contributed to sales.

Outlook for the year ending March 31, 2021
●	There are concerns about competition from imported
gratings. Our plan is to develop new applications for
gratings and conduct sales activities that reflect the longterm outlook for this business.

Initiatives for achieving the Medium-Term
Management Plan targets●	Use joint activities with the building materials segment toincrease sales of gratings used at large construction
projects.
●	Increase outsourced galvanizing orders and makeproduction operations more efficient.

Performance in the year ended March 31, 2020

121st term (actual)
Net sales
Operatingprofit

YoY

5,333

+1.8

1,034

-3.9

million yen

million yen%%

Net sales(Millions of yen)

6,000

5,728
4,430

4,351

4,823

5,241

5,333

3,000

0

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20(116th term)(117th term)(118th term)(119th term)(120th term)(121st term)

Topics●	Real estate sales increased because of a higher occupancy
rate at tenant-oriented buildings.
●	Engineering business sales increased due to the strength ofactivities at overseas plants.

Outlook for the year ending March 31, 2021
●	Effectively utilizing properties remains the priority of the Real
Estate Business.
●	The engineering business is focusing on sales activities tocapture orders for the next fiscal year and afterward.

Initiatives for achieving the Medium-Term
Management Plan targets●	We plan to increase profitability in the Real Estate Businessby utilizing properties in the most effective manner possible.
●	In the engineering business, we are targeting chiefly
demand outside Japan for steel sheet processing
equipment and technical support services.

Establishment of Fukui Yodoko Co., Ltd.

We started manufacturing and selling exterior products in 1970 andare celebrating the 50th anniversary of the debut of YODO Monooki
Storage Shed in 2020. The success of these cabinets over many
years is the result of a variety of modifications to reflect customers’
needs, outstanding functions, attractive designs and other features.
Fukui Yodoko was established for the purpose of rebuilding the
production and logistics operations in order to ensure a timely
supply of exterior products that reflect the increasingly diversity ofcustomers’ needs and preferences. The new company is located at
a previously unused site at the Fukui Plant.
Fukui Yodoko plans to start manufacturing exterior products in
October 2021.

《Profile of Fukui Yodoko》
1.NameFukui Yodoko Co., Ltd.

2.Location

97-30, Mikuni-cho Shimbo, Sakai city, Fukui

3.Representative

Yoichiro Nakano, President andRepresentative Director (Managing
Executive Officer of Yodogawa Steel)

4.Businessactivities

Manufacture and processing of exterior
products and other activities

5.Paid-in capital

100 million yen

6.Established

April 1, 2020

7.Ownership

Yodogawa Steel Works, Ltd.: 100%

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
Chairman of the Board : Soichi Kitamura
Established : May 19, 1973
Paid-in capital : NT$ 3,211.8 million
President: Colin Hsu
Business activities : Steel sheet manufacturing and sales
No. of employees : 568
Main facilities : 1 pickling line 2 cold rolling lines 2 galvanizing lines 2 color coating lines

Performance in the year ended March 31, 2020

● The overall economy of Taiwan in the fiscal year ended March
31, 2020 recovered slowly as semiconductor industry capital
expenditures and other sources of growth offset the negative
impact of global economic uncertainty caused by U.S.-China
trade friction.
● SYSCO’s sales volume was unchanged from the previous
fiscal year because of numerous activities for increasing sales
as the lack of growth of internal demand in Taiwan made thebusiness climate challenging.
● Export sales decreased. Sales in the U.S., SYSCO’s primaryexport market, were impacted by trade protectionism.
SYSCO focused on sales in Southeast Asia and other regions,but competition was intense.

Taiwan■Outlook for the year ending March 31, 2021

● In Taiwan, SYSCO focuses on increasing sales of galvanizedproducts for solar panel frames, a new product, and creating
new applications is one goal. Plans also include improving
profitability by adding more value to colored steel sheets.
● To offset the impact of U.S. trade protectionism, SYSCO
continues focusing on adding new export markets and newsales channels for exports.
● To overcome a difficult business climate due to COVID-19 andother factors, SYSCO plans to create new sources ofdemand, add more value to its products, cut costs and use
various other measures for profitability.

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 lines

Performance in the year ended March 31, 2020

● A review of the composition of products to improve
profitability resulted in higher prices of products. Due to alower sales volume and foreign exchange rate movements,
sales were the same as one year earlier and the loss was
smaller.
● There was a big increase in sales of building materials mainly
because of the larger volume of sales to current customers
and orders from pig farmers, a sector where investments arevery high.
● YSS used joint activities with partners in China to increase
sales of home appliance steel to manufacturers in China.
23

Location: Anhui, China

China

Chairman of the: Eichi Tanaka
Board and President■

No. of employees : 256

Outlook for the year ending March 31, 2021

● To increase the sales volume of building materials, YSS isusing joint sales activities with YBMH, creating new
applications for its products and making its brand evenstronger.
● YSS is continuing to use collaboration with partners in China
to capture orders from home appliance manufacturers in
China. The goal is to quickly establish a sound base ofoperations as the Yodogawa Steel Group’s primary base ofoperations in China.

Trade name : PCM Processing (Thailand) Ltd.
Location: Amatanakorn Industrial Estate
Representative : Kosuke Takeoka
Established : April 1999
No. of employees : 126
Paid-in capital : THB 1,377.259 million
Business activities : Pre-painted steel manufacturing, steel sheet processing and sales
Main facilities : 1 continuous color coating line 2 large leveler lines 1 sheet slitter

Performance in the year ended March 31, 2020

● There was heated price-based competition in the steel sheet
market in Thailand caused by a large volume of low-priced
imports due to the end of Thailand’s anti-dumping measurestargeting pre-painted steel sheets from China in 2019 andother countries and U.S.-China trade friction.
● The sales volume increased because of emphasis on sales of
pre-painted steel sheets for AC outdoor units, a new
application, and refrigerators. Using new suppliers and othermeasures to lower the cost of raw materials contributed to an
improvement in earnings.

TopicsThailand■

Outlook for the year ending March 31, 2021

● P rice-based competition is expected to further intensify
because of the U.S. trade protectionism and the end of
Thailand’s anti-dumping measures for pre-painted steel sheet
imports from China and other countries.
● PPT is aiming for fiscal year profitability as the Yodogawa
Group’s primary base of operations in the ASEAN region byincreasing its share of the AC outdoor unit market, a new
application, and increasing sales of clear-coated stainlesssteel sheets.

【Activities at SYSCO for Increasing Sales】

To strengthen its profile in Taiwan’s steel market, SYSCO is using prominent
outdoor advertisements, advertisements in steel industry publications andproduct information seminars. In 2019, SYSCO placed a marketing video on
YouTube as one way to give end users timely information about the benefitsof using SYSCO products. The video includes finished products that use
SYSCO steel, testing data, customer visits and other information. All of these
activities are aimed at increasing sales of SYSCO products.

The YouTube video can be viewed on the SYSCO website.

24

A Base that Supports Value Creation (ESG Information)

Working to co-exist with all of our
stakeholders, we continually strive toenhance ESG activities.

ISO 14001 Certified Business Sites

Security

SafetyBy creating value through the Yodogawa Steel Group’s core goals of safety,
security, environment, and beauty, we strive toward our Long-Term Vision to coexist
with all of our stakeholders and contribute to achieving a sustainable society.

Environment

BeautyBusiness site

Environment
Basic Environmental Principles
Contribute to the preservation of the Earth’s
environment. 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 promote awareness ofenvironmental preservation and instill an action-oriented
mindset.
2. Ensure consideration for the environment in ourbusiness activities
1)	In all of our business activities, strive to minimize
environmental burdens while preventing harmful pollution,conserving resources, reducing energy usage,
rationalizing logistics, and reducing and recycling waste.
(Preventing harmful pollution: adhering to environmental
laws and standards)
2)	Strive to minimize environmental burdens from waste
when developing products by improving durability,
reusing materials, and utilizing materials that are easy torecycle.
3. Establish internal organizations
In order to pursue the objectives above, strengthen
environmental management organizations at the head officeand each business site, while also implementing
environmental preservation activities.
25

Our three steel sheet plants inside Japan and the plants of ourthree consolidated subsidiaries overseas carry out on-goingenvironmental preservation activities in order to minimize
environmental burdens. The same plants have received ISO
14001 certification as part of efforts to manage and improvethese activities.

Environmental Management System
Under our Basic Environmental Principles, we are advancing
initiatives to lessen environmental burdens. We created the
Yodoko Environmental Management System in order toaddress regulations and requirements related to environmental
preservation, while also making our initiatives more proactive.
We established an Environment Committee with the President
as chairperson and with members comprising a Director in
charge of environmental issues and Environmental Officers fromeach division. This committee handle overall decisions on
fundamental matters concerning the environment. Additionally,
the committee regularly holds contact meetings with the Groupand is working to ensure widespread awareness.

Ichikawa Plant

June 2000

Osaka Plant

December 2000

Kure Plant

December 2000

Energy Management Planning &Promotion Officer

Plants Division

Offices Division

Yodoko Group companies

Environmental Officers

Environmental Officers

Environmental Officers

Pollution Prevention Officers
Energy Officers

Environmental
Management Personnel

Environmental Managers

Environmental Managers

Departmental/Division Managers

Environmental Policy Promoters

300

JICQA

Base year
250

DNV・GL

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

SGS

PCM Processing (Thailand) Ltd. November 2013

UKAS

Versus 1990

257

200
150

-28%

-27%

-29%

-31%

184

189

184

179

2015

2016

2017

2018

37%
cut

161

100
50

Purpose and objectives of environmental activities
Prevent global warming

Create a recycling-oriented
society

Promote reduction of resource
usage

Reduce environmentally
harmful substances

Reduce VOC emissions
Reduce usage of toxic chemical
substances
Environmentally conscious productand technology development

Consideration for theenvironment

0Reduce CO2 from production
divisions
Reduce CO2 from business offices

Head Office Environmental
Management GroupCO2 emissions(1,000 t-CO2)

Reduce CO2 from transport

President
Director in charge ofEnvironmental Issues

Examining/certifying agency

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

Yodoko Environmental Management System

Energy Management Officer

Date certified

equipment lighting. In terms of logistics, our efforts include
shifting to rail and marine transport, in addition to improving ourloading efficiency ratio on trucks and other vehicles. We arealso encouraging all offices to moderate room temperatures (to28ºC in summer and 20ºC in winter) and to follow activities
such as “Cool Biz” (avoiding suits in summer).
In FY2019, we cut CO 2 emissions by 37% and energy
consumption by 38% (both over FY1990).

Contribute to local communities
Ensure risk management

Environmental Managers

Prevent Global Warming
As countermeasures to global warming, we are making efforts
to increase efficiency by upgrading equipment in production
divisions, while also improving operations and using LEDs for

1990

2019

(fiscal)(base year)

Energy consumption
(TJ)

6,000
Base year
5,000

Versus 1990

4,988

4,000
3,000

-34%

-32%

-33%

-34%

3,295

3,409

3,345

3,315

2015

2016

2017

2018

38%
cut

3,071

2,000
1,000
0

1990

2019

(fiscal)(base year)26

A Base that Supports Value Creation (ESG Information)

ESG Information

 reate an Environmentally Recycling-oriented
C
Society
We are 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, while used oil isrecycled or used for supplemental fuel. Slag is used forroadbed base layers. In FY2019, our total volume of wastematerials was 78,000 tons, an approximate 10% decreaseyear-on-year. The reuse of waste materials as a resource wasabout the same as in the previous fiscal year.

Economical Utilization of Clean Energy
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 6,410
MWh of electricity in FY2019.
This photovoltaic power generation is expected to reduce
annual CO2 emissions by about 3,557 tons.

Total volume created

120

67.3

80
40
0

Volume recycled

67.6
86

83

58

2015

2016

80

53

2017

2018

2019

20
(fiscal)

Yodogawa Steel participates in the Voluntary Action Program of
the Japan Iron and Steel Federation. We have adopted theprogram’s goal “not to let emissions exceed FY2010 levels”
and we strive to lower our VOC emissions. To date, we havetaken steps including upgrading the deodorizing apparatus on
our pre-painted steel sheet lines, while lowering FY2019 VOC
emissions 38.5% versus FY2010.
VOC emissions and reduction rate(t)

50

Base year

40
30

37

20

-14.2%-37.0%(base year)

27

Versus

2010

38.5%
cut

23
2010

-53.4%

32

10
0-45.7%

2015

2016

20
2017

17
2018

23
2019

Solar panels in SYSCO Taiwan

0Reduce Environmentally Harmful Substances(fiscal)

2016

2017

15

14

2018

2019

Environmental Accounting
We keep track of environmental preservation costs as anindicator that helps us efficiently carry out environmental
preservation initiatives, and prevent and suppress
environmental burdens, so that we do not harm theenvironment through our business activities.
Our investments for environmental preservation in FY2019
came to 22 million yen, which included measures such as
installing LED lighting.
Furthermore, our preservation expenses came to 510 million
yen, consisting of 39% for air pollution prevention measures,
18% for water contamination prevention measures, and 29%
for processing industrial waste. These expenses mainly went
toward preventing pollution and recycling resources.

(fiscal)Notes: 1. Though we do track statistics for the entire Group, including overseas
companies, numerical data on the environment presented on pages 26
and 27 is on a non-consolidated basis in the interest of simplicity andclarity for expressing reduction rates, etc. (Yodogawa Steel participates in
The Japan Iron and Steel Federation’s “Action Plan for a Low Carbon
Society,” “Voluntary Action Plan for a Recycling-Oriented Society,” and“Voluntary Action Plan to Cut VOC Emissions”).
2. FY2019 numerical data on the environment presented on pages 26 and
27 are preliminary figures.

As countermeasures to global warming, we are making efforts
to increase efficiency by upgrading equipment and switching to
LED lighting through our initiatives to lower energy consumption
and cut CO2 emissions.
1) R educed electricity consumption by increasing theefficiency of rolling mill exhaust fans.
2) R educed electricity consumption of building lights,
various motors, and ventilation equipment.

Electricity consumption

122

119

120

100

96

95

50
0

2015

2016

2017

2018

2019

(fiscal)CO2 emissions
120

15

2015

2016

2017

12

12

2018

2019

10

(fiscal)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 bills for ventilationequipment.
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.

OthersPhotovoltaic power generation3) Installed heat recovery steam generators on someproduction lines, as in the previous fiscal year.
(1,000 t)

15

Following the Japanese government’s implementation of green
energy policies, we installed photovoltaic power generation
systems on the roofs of our plants in September 2015. As of
December 2019, these systems have generated a cumulative
2,286 MWh of power.

(1,000 MWh)

150

16

 evelopment of Environmentally Conscious
D
Products

Prevent global warming

40

48

2015

20

0

27

0

(10,000 m3)

73

60

(%)

78

56

67

80

60

86

85

56

VOC emissions

20

62.1

62.1

Natural gas consumption

In 2016, SYSCO replaced production line equipment withmachinery that holds down VOC emissions. In FY2019, there
were more activities to lower these emissions, including thepartial modification of production lines.

40

Recycling rate

65.4

SYSCO’s Environmental Activities

Reduce Environmentally Harmful Substances(t)

Waste products and valuable waste volume,and recycling rate (non-consolidated)(1,000 t)

Topics

(MWh)

600

100

100

2015

2016

2017

80

0

81

78

2018

2019

555

524

509

2016

2017

2018

2019

400
200

101

533
145
2015

(fiscal)400(fiscal)28

A Base that Supports Value Creation (ESG Information)

ESG Information

Our Products Helping Solve Social Issues

Reducing Usage ofEnvironmentally Harmful
Substances with Our
Chromate-free Products

Major related SDGs

Contributing to Global
Warming Prevention
through Insulation
Solutions

Major related SDGs

Proposal of Yodogawa Steel
Products for Disaster
Preparedness and Mitigation

Major related SDGs

Using Exterior Products for
Secondhand Smoke Protection

Major related SDGs

Safety Security Environment

Safety Security Environment Beauty

Safety Security Environment

Safety Security Environment

For our steel sheet products, we have dedicated effort todeveloping chromate-free plates as quickly as possible. These
plates do not contain hexavalent chromium, which is anenvironmentally harmful substance, and therefore help us
minimize environmental burdens in our product creation.
In 2005, we completely removed chromate from products forcustomers in the electrical appliance industry, and, in 2007, we
became the first in the industry to launch chromate-free treatedsteel sheet for roofing and siding (brand name Eco Green) for
use in exposed environments.
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 aseashore) on all prepainted steel sheets forexterior use.
As a pioneer of chromatefree treated steel sheet,
we will continue to meetthe demands of society
and realize a new level ofcontributing to minimize
environmental burdens
through on-going productdevelopment.

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 effects with theirsuperior insulating qualities, which contributes to reducing
energy usage. Additionally, these products use special steel
sheet, based on YODO Hyper GL Color chromate-free prepainted steel sheet, with added stain and heat resistancefeatures, resulting in further reduction of environmental
burdens. YODO fire-proof panel Grand Wall Hyper has received
fireproof certification as a stand-alone exterior building material,
while also boasting superior wind pressure and seismic
resisting qualities, as well as sound insulating qualities.
In recent years, with the heightening awareness ofenvironmental problems, environmental performance has
started to receive greater emphasis in customers’ productselection. Our highly functional metal siding contributes toglobal warming prevention efforts by reducing CO2 emissions
through superior energy-saving features.

Awareness of the importance 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 emergency supplies of foodand water. For convenience, we have created a storage shedlock that opens automatically without using a key when there isan earthquake above a certain intensity (about seismic scale
6-lower). Many options are available as well, such as partitions
for using sheds for changing clothes or a portable toilet, a solar
panel, and a tank for collecting rainwater.
In all areas of Japan, many local government agencies,
schools, condominium associations and other organizations areusing our storage sheds with the characteristics above as partof measures to be prepared for disasters.
We will continue to develop products and create new
applications in order to contribute to society toward the goalsof safety, security, the environment and beauty.

On April 1, 2020, all provisions of Japan’s partially revised
Health Promotion Act, which was enacted in July 2018,
became effective. As a result, offices, factories, warehouses,
commercial facilities, most restaurants and all other locations
used by many people are required for protection against
secondhand smoke.
We have created a version of our storage sheds for use as asmoking area in order to help provide pleasant environments
for smokers and non-smokers. Adding optional items to ourmulti-purpose YODO Kura Storage Shed MD allows thisstructure to be used as an enclosed outdoor smoking location
as well as to meet the Health Promotion Act’s requirements for
an indoor smoking space. Another secondhand smoke productis the YODO Smoking Area KTA. Based on the YODO Bicycle
Parking Unit KWA, this smoking area has high side panels toserve as an open outdoor smoking area that keeps mostsmoke within the structure.

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

Mechanical earthquake
detector

YODO Kura Storage Shed MD configured as a smoking room30

A Base that Supports Value Creation (ESG Information)

ESG Information

Social
Product Development Initiatives

R&D Philosophy

Steel Sheet and Building Materials & Exterior Products

Following our basic philosophy of “Create
value with new originality,” we engage in
research and development while constantly
considering whether projects do in fact haveoriginality and generate new value. In theprocess, we ensure a company-wide
vigilance toward safety, security, theenvironment, and beauty.

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

Creating value through business activities

Building
materials&
exterior
products

Steel sheets

Security
SafetyEnvironment
BeautyGrating

Rolls

Our steel sheet products can be separated into two broad
categories. The first category is steel sheets we provide as
materials with specifications that meet manufacturers’
requirements for performance of electrical appliances andbuilding materials. The second category is steel sheets that wesell through intermediaries as materials for general purpose
building. Sheets in the former category are made to fit eachcustomer’s exact needs and are produced by our technology
development divisions at Kure, Ichikawa, and Osaka Plants.
Sheets in the latter category are made in collaboration witheach plant’s technology development division after the Head
Office development division researches market needs.
Our Head Office development division also handles thedevelopment of processed products that include exterior
products, building materials, and the like. By merging our steel
sheet, exterior, and building material development divisions, wehave been able to organically interconnect each group’s
technology and expertise from the product planning stage. This
has allowed us to develop steel sheets optimal for processed
products, while engaging in development that makes the mostof the properties of steel sheets.
This development framework has become the source of
Yodoko’s primary advantage of integrated production from steel
sheet to final product, in a process that creates safe and secure
products for users.

Segments
Steel Sheets

Building Materials and Exteriors

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. For 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 BusinessWith the development division located in the Osaka Plant, we
carry out development of 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 Japaneseclients through ourbusiness alliance with theGerman company
ANDRITZ Küsters GmbH,a global manufacturer.

Test calender machine for paper making (gloss
finish)Grating BusinessAt the development division located in Izumiotsu Plant, we havecreated a database from diverse information on customer
needs and many types of information from sales staff, while
carrying out developmentof innovative new
products that are safe,
durable, and aestheticallypleasing. We recently
developed a type ofgrating that includes
insect growth inhibitorand serves as an antipest barrier for gutters,
Load testing
ditches, etc.

At Overseas Subsidiaries
In SYSCO’s technology development division, we are engaged
in R&D on surface-treated steel sheets in order to quickly andprecisely respond to diversifying customer demands andmarket needs.
The technology development division’s prototyping laboratory is
the hub of this R&D and has acquired certification from the
Taiwan Accreditation Foundation (a public certification agency),
which serves to ensure quality and reliability.
When evaluating the corrosion resistance, surface
discoloration, and other properties of surface-treated steel
sheets at the prototyping laboratory, we are working to achieve
speedy development by utilizing data from outdoor-exposure
tests (which check the product’s weather resistance underrealistic conditions) along with test data from various
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.
Going forward, we will further improve functionality, including
improving the scratch resistance and adding self-cleaning
features of PVDF pre-painted steel sheets (fluororesin prepainted steel sheets), as we develop products that meetcustomer demands and market needs.

Cyclic corrosion tester (CCT)

Based on the Yodogawa Steel Group Corporate Philosophy,
and in order to meet customer expectations and trust, we haveestablished quality management systems in each businessdivision. While productively running and maintaining thesesystems, we are striving to evaluate and continually improvetheir efficacy.
In the process, our highest priority is adhering to rules, such as
laws, contracts with customers, and standards, whilestrengthening systems for preventing and detecting defects
and inadequacies.
Additionally, we have established a QMR* Committee, andQMR Working Group, tasked with strengthening the overall
quality assurance framework of the Group.
Members of these cross-divisional organizations comprise quality
assurance managers in each division, including at affiliatedcompanies. Duties involve ensuring compliance with Guidelines
for Strengthening Quality Assurance Systems (stipulated byindustry bodies), sharing and spreading quality-related
information and examples 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

Condensation circulation-type carbon arc QUV weathering tester
weathering tester

33

Basic Policy on Quality Assurance

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

Supervisor: Director in charge of quality assurance
Members: quality assurance managers of each business site

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 human resources, we are
realizing part of our Corporate Philosophy, namely, to “take up
the challenge to innovate and expand based on the individual
creativity of each employee.”

Training Programs
We are striving to support career development for employees,
while also boosting skills and motivation, through OJT (On-theJob Training) focusing on daily tasks and OFF-JT leveraging
internal and external resources. Furthermore, through training
and other programs, we are fostering employees who eachmaintain a constant awareness of issues, who can think bythemselves, and who can take actions to deliver products thatmeet the needs of our times. We target employee training thatenables workers to contribute to peoples’ lives and thedevelopment of society.
Main training programs
New employee
training

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

Rank-based
training

Young employee training
Core employee training
New manager training (early management phase)

Mental health training
Language training (English, Chinese)

Young employee training

35

New manager training

Social Contribution Activities

 usiness Improvement Activities
B(JK Activities) ( J: “jishu” meaning “voluntary”,
K: “kanri” meaning “management”)
We carry out voluntary management activities in small groups
addressing the themes of quality improvement, cost reduction,
productivity improvement, safety, and environmental
preservation. Once a year, we also have a large meeting thatbrings Group companies together in Osaka, with our 50th
meeting taking place in 2016.
Presentations are made at
this Group-wide meeting
to provide opportunities tostudy effective examples
that we can leverage toimprove businesspractices. We utilize thesetypes of activities in orderto strive for growth andself-realization for each
Yodogawa Steel Group JK Meeting
employee.

Diversity
We hire diverse human resources regardless of gender,
nationality, or the presence or absence of disability. 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, andsociety in general.
We also believe that establishing a work environment
conducive to energetic participation will stimulate the growth ofindividual employees with diverse talents and values, while also
contributing to greater corporate value. One key component of
this objective is encouraging the participation of female
professionals. Specifically, we have created a hiring goal to
make female professionals 20% of our college-graduate careerpath employees. Furthermore, we are carrying out training,
including language and other types of training, in order toestablish and spread the idea of female career-path employees.

 onations to Charities Using Shareholder
D
Benefits

 ocial Contribution Activities at Overseas
S
Subsidiaries

Donations by shareholders of record on March 31, 2019 who
selected a charitable donation from among the items listed in
the shareholder benefits catalog were as follows. We are very
grateful to these shareholders for their generosity.
The following donations were made in November 2019 in thename of the Yodogawa Steel Works, Ltd. (Shareholder
Donation Account).

SYSCO Taiwan■ Total donations 353,000 yen by 188 shareholders● Promoting local arts and culture

UNICEF 68 shareholders 132,000 yen
The Japanese Red Cross Society 50 shareholders 100,000 yen
Ashinaga Foundation 70 shareholders 121,000 yen■	Transfer to donations from shareholders who did not apply forshareholder benefits 853 shareholders 1,548,000 yen*Donations for UNICEF, Japanese Red Cross Society and Ashinaga Foundation

 pening the Yodoko Guest House to theO
PublicThe 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 has been 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.
The guest house was temporarily closed in the middle of March
2020 because of the COVID-19 crisis and reopened to the
public on June 6.

Yodoko Guest House (former residenceof the Yamamura Family)

Dolls are displayed at the guest house tocelebrate Hinamatsuri (Girls’ Day) in March●	Voluntarily building road median strip flower beds on anational highway near the company
As part of roadway beautification programs, we started voluntarily
building, in 1998, roadside flower beds on a national highway near
the company. We are actively promoting urban beautification projects
and working to enhance the reputation of Yodogawa Steel.
In order to support citizen education and quality of life, while also
strengthening the positive image as a company deeply connected to
local communities, we have been donating funds to cover the activity
costs of Kaohsiung Municipal Social Education Center since 2011.
This contribution is part of efforts to promote local arts and culture.

SYSCO Taiwan and PPT Thailand● Donating to neighborhood schools
At SYSCO, one of our social contribution activities was to donate
safety gear to schools in Siaogang district in 2017, in order to ensure,through the use of safety gear, added security for children andsupervising adults. Furthermore, one of PPT’s contributions to its
local community is participating in a scholarship program to support
education at elementary schools.

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 the mid-to long-term, we have pursued a variety of
initiatives taking into consideration the standpoints of all
stakeholders (shareholders, customers, business partners,
employees, and local societies) while positioning transparency,
fairness, and prompt and courageous decision-making as theobjectives of our corporate governance.

Corporate Governance Structure
We emphasize nimble management suited to the scale of ourcompany and have elected to be organized as a company with
an Audit & Supervisory Board. Furthermore, we have adopted
an Executive Officer system that aims to keep a measure ofefficient distance between Directors’ oversight/decision-making
and business execution, while still maintaining continuity, fromthe standpoint of sharing information, between management
decisions and business execution.
In order to build a Board of Directors with a dynamic structure

and one that is optimal with regard to clarifying management
responsibilities and responding to changes in the businessenvironment, we have Directors elected for one-year terms andYodogawa Steel (the “Company”) Articles of Incorporation
stipulate no more than seven Directors. By appointing diverse
Directors with differing experiences and knowledge, we aim toensure an appropriate size and diverse composition of theBoard of Directors, while facilitating more energetic,
constructive, and engaging discussions during Board meetings.
Additionally, in order to strengthen the transparency ofoversight and decision-making processes, we also appoint
Independent Outside Directors who meet the Tokyo Stock
Exchange’s criteria for independence. As of June 30, 2020, theCompany has a total of six Directors, three of whom are
Independent Outside Directors.
With regard to the structure of the Audit & Supervisory Board,
the Companies Act and our Articles of Incorporation stipulatethat we have no more than four Audit & Supervisory Board
Members, with at least half being Independent Outside Audit &Supervisory Board Members.

Directors and Audit & Supervisory Board Members (as of June 23, 2020)
Directors

Satoshi Nitta

Toshio Kumamoto Tadashi Hattori

Toshikazu Saeki

Hiroshi Okamura

Mitsuaki Yuasa

President andRepresentative Director

Director, Managing Executive
Officer

Director (Independent
Outside Director)

Director (Independent
Outside Director)

Director (Independent
Outside Director)

Director, Managing Executive
Officer

Audit & Supervisory Board Members

History of corporate governance reforms
June 2003

The Company elected to have 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

The Company adopted an Executive Officer system, reducing the number of Board of Directors members from no more than 18 to no more thanseven, in order to have a measure of distance between Directors’ oversight/decision-making functions and business execution functions, toincrease the strength and efficiency of the oversight functions of the Board of Directors, and to increase the speed of business execution.
After abolishing the Directors’ retirement benefits program, the Company adopted a stock option (stock-based remuneration) program for
Directors and Executive Officers. This program utilizes stock options and is intended to further increase the correlation between Company
performance and Company stock price, while also raising commitment and motivation toward growing the stock price and improving businessperformance.

June 2006

The Company decided to include Outside Directors on the Board of Directors and appointed one Outside Director 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 Company decided to include multiple Independent Outside Directors on the Board of Directors and appointed two Independent Outside
Directors in order to facilitate more energetic, constructive, and engaging discussions during Board meetings, while also strengthening thetransparency of oversight and decision-making processes.

December 2015

Accompanying the adoption of a corporate governance code, the Company enacted the Yodogawa Steel Works, Ltd. Corporate Governance
Guidelines as the Company’s second highest set of regulations after the laws and regulations of Japan and Yodogawa Steel Articles ofIncorporation.

June 2018
June 201937

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)

FY2019 (Directors and Audit & Supervisory Board members as of June 23, 2020)
Meeting attendance by Outside Directors and Outside Audit & Supervisory Board Members
Name

Attendance at Board of Directors meetings

Attendance at Audit & Supervisory Board meetings

Toshikazu Saeki

14 times present at 14 meetings—

Hiroshi Okamura

12 times present at 14 meetings—

In order to further strengthen governance, the Company decided to add one additional Outside Director on the Board of Directors, giving theCompany a total of seven Directors, three of whom are Independent Outside Directors.

Mitsuaki Yuasa

14 times present at 14 meetings—

The Company decided to appoint a female Outside Director in order to facilitate more energetic discussions from diverse perspectives at Board of
Directors meetings.

Miho Ishihara

11 times present at 11 meetings

12 times present at 12 meetings

Ritsuko Watanabe

Appointed at the General Meeting of Shareholders held 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

Toshikazu Saeki

Miho Ishihara

Apr. 1970 Joined Kobe Steel, Ltd.
Jun. 2001 Administration Officer of Kobe Steel, Ltd. and General Manager of
Osaka branch of Kobe Steel, Ltd.
Jun. 2002 President and Representative Director of Shinko Care Life Co., Ltd.
(currently Sumirin Care Life Co., Ltd.)
Jun. 2011 Advisor of Shinko Care Life Co., Ltd.
Apr. 2012 Specially Appointed Professor and Assistant to the President ofKobe University
Jun. 2015 Outside Director of the Company (Current Position)
Dec. 2016 Director (Audit & Supervisory Committee Member) of LOCKON CO.,LTD. (Current Position)

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

Reason for Election
Mr. Saeki’s many years of management experience and extensive knowledge
can be used for the management of Yodogawa Steel.

Hiroshi Okamura
Apr. 1976 Joined The Daiwa Bank, Ltd. (currently Resona Bank, Limited)
Jun. 2006 Representative Director, Vice President and Executive Officer ofResona Bank, Limited
Jun. 2008 President and Representative Director of Resona Research InstituteCo., Ltd.
Jun. 2009 Director of The Kinki Osaka Bank, Ltd. (currently Kansai Mirai Bank,
Limited)Jun. 2011 Part-time Auditor-secretary of Osaka Cosei Shinkin Bank (Current
Position)
Jun. 2011 Part-time Auditor of Japan Foundation Engineering Co., Ltd.
(Current Position)
Jun. 2012 President and Representative Director of Shikishima Printing Co.,
Ltd. (Current Position)
Jun. 2012 Part-time Director of Koyubusiness Co., Ltd. (Current Position)
Jun. 2013 Auditor of Osaka International Convention Center Corporation(Current Position)
Jun. 2015 Outside Director of the Company (Current Position)
Reason for Election
Mr. Okamura’s many years of management experience and extensive
knowledge can be used for the management of Yodogawa Steel.

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 Position) Joined Hibiki Audit Corporation(Current Position)
Dec. 2010 Registered as Certified Public Tax Accountant
Jun. 2019 Audit & Supervisory Board Member of the Company (Current
Position)
Reason for Election
Ms. Ishihara is a certified public accountant and tax accountant and has
experience as a consultant for internal controls and risk management. She canuse this knowledge and experience to further improve the corporate governanceof Yodogawa Steel.

Ritsuko Watanabe
Sep. 2007 Registered as attorney, Joined Hommachi Chuo Law Office (Current
Position)
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 Directors and Audit & Supervisory Board Members to complete questionnaires in order to analyze andevaluate the effectiveness of the Board of Directors. The following is a summary of the evaluation performed in FY2019.
1 Questionnaires

Scope

All 7 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 the board’s effectiveness, our goals are towork on effective activities concerning management strategies,
business plans and succession plans and to hold morethorough discussions at the Board of Directors meeting aboutrisk management and other items, based on the views of theManagement Committee.

The Yodogawa Steel Group Medium-Term Management Plan
2019 ended in March 2020. The Group has started the threeyear Yodogawa Steel Group Medium-Term Management Plan
2022, which 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
General Meeting of Shareholders
ReportAppointment

Audit &
Supervisory Board Members(Audit & Supervisory Board)

Mitsuaki Yuasa
Sep. 1973
Jun. 2006
Jul. 2006
Jun. 2008
Nov. 2008
Jun. 2009
Jun. 2016
Jun. 201839

Registered as Certified Public Accountant
Retired from KPMG AZSA & Co. (currently KPMG AZSA LLC)
Opened Mitsuaki Yuasa CPA Office (Current Position)
Outside Audit & Supervisory Board Member of the Company
Outside Member of the Board of WORLD Co., Ltd.
Outside Audit & Supervisory Board Member of Sojitz Corporation
Retired from Outside Audit & Supervisory Board Member of the Company
Outside Director of the Company (Current Position)

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 Yodogawa Steel.

Board ofDirectors(Directors)

Audit
ReportCompliance & Risk Management Committee

ReportYodoko Hot Line
(whistleblowing system)

Working Group for Compliance& Risk Management
Compliance promotion

Auditing OfficeAppointment
Executive Committee(Executive Officers)

Audit
Accounting auditors
ReportRisk management promotion
Violation prevention &education

Internal audits
Whistleblowing

Company-wide
Committees

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

Employees

40Financial Information Overview of Consolidated Results of Operations

Market environment

yen to 3,862 million yen.
Regarding sales in Japan, although efforts were made to raiseor maintain the selling prices in each business, overall sales
volume decreased, especially in the second half. In addition,
Taiwan subsidiary SYSCO saw a significant decrease in export
particularly to North America, due to U.S. trade protectionism.
As a result, consolidated sales decreased. For earnings,
operating profit was lower in Japan primarily because of adecrease in sales volume and a smaller contribution to earnings
growth from inventory valuations than in the previous fiscal year.
All overseas subsidiaries experienced challenging market
conditions, but the combined operating profit of the threeoverseas companies improved slightly. Consequently,
consolidated operating profit was lower. Ordinary profit declined
more than operating profit because losses were recorded on
financial products under non-operating expenses in addition toa decrease in the gains on sales of investment securities
included under non-operating income. The decline inconsolidated net income was greater than the decrease inordinary profit due to valuation losses on financial instruments
caused by the deterioration in the financial instruments
markets. The lower earnings at Keiyo Tekko Futo Co., Ltd. and
SYSCO, both of which have a high percentage of noncontrolling interest ownership was another major reason for the
decline in consolidated net income. As a result, the decrease in

In the fiscal year ended March 31, 2020, the second halfbrought a rapidly strengthening sense of economic stagnationin Japan due to a downturn in consumer spending following
the October 2019 consumption tax hike and slowing capital
investment and housing starts.
The global economy saw a dramatic slowdown due to sluggish
economic activity as the effects of U.S.-China trade friction
continued to be felt throughout 2019 in every region. Anothermajor factor was the global spread of COVID-19 from the
beginning of 2020.
In the steel market in Japan, demand was generally weak due
to factors such as decreases in construction demand,
automobile production, and exports. In the overseas steelmarket, the sentiment, particularly in Asia, remained weak due
to high levels of production in China. The outlook has been
extremely uncertain due to the impact of the COVID-19
pandemic on the global economy from the beginning of 2020.

Results of operations
The Yodogawa Steel Group’s net sales in the fiscal year
decreased 13,352 million yen to 154,066 million yen. Operating
profit decreased 390 million yen to 5,489 million yen, ordinary
profit decreased 2,403 million yen to 7,425 million yen, andprofit attributable to owners of parent decreased 2,392 million

Net sales

Operating profit(Millions of yen)

180,000

90,000(Millions of yen)

167,419

154,066

Down

8.0% YoY

0

41

6,000

3,000

5,879

5,489

Down

6.6% YoY

0

profit attributable to owners of parent is smaller than thedecrease in consolidated net income.

Outlook
Various regions of the world including Japan, have extensively
implemented measures, such as restrictions on going out andthe shutdown of commercial facilities, to curb the spread of the
COVID-19 pandemic. This has significantly affected personal
consumption and corporate activities. The above actions tocurb the spread of the COVID-19 pandemic are bound to
significantly affect the global macroeconomy as well as the
Yodogawa Steel Group’s operating environment. The extent of
the pandemic’s impact is extremely uncertain at this point.
The Yodogawa Steel Group announced the Yodogawa Steel Group
Medium Term Management Plan 2022. The three year plan starts inthe fiscal year ending March 31, 2021 and follows the Yodogawa
Steel Group Medium Term Management Plan 2019. While thecurrent environment is extremely uncertain the Group is committed
to strengthen its profitability by maximizing speed and agility thatare key strengths of the Yodogawa Steel Group and implementing
measures in response to changes in the environment.

Returns to shareholders
Distributing earnings to shareholders is one of the highest
priorities of Yodogawa Steel. Earnings are distributed by paying

Profit attributable to owners of parent

Total assets(Millions of yen)

(Millions of yen)

7,000

3,862

3,500

0

220,000

6,254

Down

38.2% YoY

dividends that reflect results of operations, repurchasing stock
and in other ways. The basic policy for dividends that are in linewith our results of operations is to make payments that arestable and continuous. Dividends also take into consideration
the need for funds for investments and other actions forincreasing corporate value, the outlook for sales and earnings,
the need to maintain 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, 2018, 2019 and 2020.
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,
2020 is to be 40 yen per share. With the interim dividend of 30
yen, this will result in a dividend of 70 yen per share for thisfiscal year.
There is currently no dividend forecast for the fiscal year ending
March 31, 2021. An announcement will be made promptly
once it becomes possible to disclose a dividend forecast.

110,000

Cash and cash equivalents at end of period

209,465

201,125

Down

4.0% YoY

0

Dividends per share(Millions of yen)

(Yen)

40,00080

34,65832,31620,000UP

7.2% YoY

0

70

70

40

0

FY3/19FY3/20FY3/19FY3/20FY3/19FY3/20FY3/19FY3/20FY3/19FY3/20FY3/19FY3/20(120th term)(121st term)(120th term)(121st term)(120th term)(121st term)(120th term)(121st term)(120th term)(121st term)(120th term)(121st term)42Consolidated Financial Statements

Financial Information

Consolidated Balance Sheet(Millions of yen)

FY3/19FY3/20FY3/19(as of Mar. 31, 2019) (as of Mar. 31, 2020)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
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
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets
43

36,84344,0183,494
15,5194,397
12,733
3,881(132)
120,755

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

60,458(45,269)
15,189134,337(121,482)
12,855
18,687
47
(35)
12
554
12,004(11,175)
828
48,126

60,663(46,096)
14,566135,668(123,356)
12,312
19,001
91
(50)
41
802
11,838(11,069)769
47,493

1,472
1,472

1,641
1,641

38,292369
448
39,10988,709209,465

34,778234
424
35,437
84,572
201,125

Consolidated Statement of Income
FY3/19FY3/20Total current liabilities

17,858
—
327
9
1,736
971
6,265

10,582
2,340
640
23
250
923
4,748

27,16819,509Non-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

10
2,502
856
66
7,154
4,034

22
2,044
856
79
7,281
4,041

Total non-current liabilities
Total liabilities

14,624
41,793

14,32433,834

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity

23,22020,385
104,961(13,061)

23,22020,381
106,763(13,351)

135,505

137,014

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

12,213
1,639
1,378
(500)

10,476
1,636
1,489
(578)

Total accumulated other comprehensive income

14,73013,023

Share acquisition rights
Non-controlling interests

210
17,225224
17,029Total net assets
Total liabilities and net assets

167,671
209,465

167,291
201,125

FY3/201, 2018 to( Apr.
Mar. 31, 2019 )(as of Mar. 31, 2019) (as of Mar. 31, 2020)

Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term borrowings
Lease obligations
Income taxes payable
Provision for bonuses
Other(Millions of yen)

1, 2019 to( Apr.
Mar. 31, 2020 )Net sales

167,419

154,066

Cost of sales

144,180

131,540

Gross profit

23,23822,525

Selling, general and administrative expenses

17,35817,036

Operating profit

5,879

5,489

Non-operating income

4,292

3,035

Non-operating expenses

342

1,099

9,829

7,425

Extraordinary income

88

295

Extraordinary losses

755

2,213

Profit before income taxes

9,162

5,507

Income taxes-current

3,174

1,782

Income taxes-deferred

(509)

236

Total income taxes

2,664

2,019

Profit

6,497

3,488

243

(373)

6,254

3,862

Ordinary profit

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

Consolidated Statement of Comprehensive Income(Millions of yen)

FY3/19FY3/201, 2018 to( Apr.
Mar. 31, 2019 )1, 2019 to( Apr.
Mar. 31, 2020 )Profit

6,497

3,488

Other comprehensive income(5,903)(1,371)

593

2,117

Comprehensive income

44Consolidated Financial Statements

Financial Information

Consolidated Statement of Changes in Equity (Apr. 1, 2019 to Mar. 31, 2020)
Shareholders’ equity
Share
capitalBalance at beginning of period

23,220CapitalsurplusRetainedearnings

20,385 104,961(Millions of yen)

Accumulated other comprehensive income

TreasurysharesShare
Valuation
Foreign
Total accumulated acquisition
Total
difference on Revaluation currency Remeasurements
otherrightsshareholders’reserve forof defined
available-fortranslation benefit plans comprehensive
equitylandsale securities
adjustment
income(13,061) 135,505

12,213

1,639

1,378

(500)

14,730Noncontrollinginterests

210

Total net
assets17,225 167,671

Changes during period(2,063)

Dividends of surplus
Profit attributable toowners of parent(2,063)

3,862

Purchase of treasury
shares
Disposal of treasury
shares(3)

Reversal of revaluation
reserve for land

Balance at end of period

23,220(3)

1,802

20,381 106,763

Main Affiliated Companies

Company name Yodogawa Steel Works, Ltd.

Consolidated Subsidiaries

Established

January 30, 1935

Capital23,220,815,228 yen

Employees

1,204

Major Offices & Plants
Head office

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

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

(300)

(300)

(300)

Tokyo branch

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

10

6

6

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

Sales offices

Equity-Method Affiliated Companies

22

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(1,736)

(2)

111

(78)

(1,706)13(195)(1,889)1,508(1,736)

(2)

111

(78)

(1,706)

13

(195)

(380)

(13,351) 137,014

10,476

1,636

1,489

(578)

13,023224(290)

17,029 167,291

PlantsConsolidated Statement of Cash Flows(Millions of yen)

FY3/19FY3/201, 2018 to( Apr.
Mar. 31, 2019 )1, 2019 to( Apr.
Mar. 31, 2020 )Sadoshima Corporation

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

Japan Trustee Services Bank, Ltd. (Trust Account)

1,425

4.81

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

1,389

4.69

Resona Bank, Limited.

1,068

3.60

Mizuho Bank, Ltd.

1,062

3.58

Cash flows from operating activities

8,273

5,927

Yodoko Partners’ Shareholding Association

944

3.18

Cash flows from investing activities

1,232(1,407)

Nippon Life Insurance Company

618

2.08

Cash flows from financing activities(3,979)(2,265)

POSCO

600

2.02

Effect of exchange rate change on cash and cash equivalents

(485)

87

JFE Steel Corporation

587

1.98

Sadoshima Corporation

571

1.93

Net increase (decrease) in cash and cash equivalents

5,039

2,341

Nippon Paint Industrial Coatings Co., Ltd.

547

1.84

Cash and cash equivalents at beginning of period

27,27732,316

8,815

29.76

Cash and cash equivalents at end of period

32,31634,658

Steel wholesaling

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

Name

45

Takada Kozai Kogyo Co., Ltd.

3,862

2

—

(2,063)

Corporate Profile

3,862

Net changes in items
other than shareholders’equityTotal changes during period

Corporate Profile / Stock Information (as of March 31, 2020)

Total

Notes: 1. The Company holds 6,223,350 treasury shares and is not included in the above list ofmajor shareholders.
2. Treasury shares (6,223,350 shares) is deducted from calculations of the shareholding ratio.

Share Ownership by Category
Securities
corporations

Financial
institutions

0.35%

26.04%

Individuals
and others

12.83%

Treasuryshares

17.37%

Overseas
investors

19.41%

35,837,230
sharesOther companies
in Japan

24.00%

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 andpayment

Securities brokerage managing youraccount

・ 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

Contact

・ Selling or purchasing odd-lot shares
・ Change of name, address, etc.
・	Changes in method of dividend receipt andpayment

Specialaccount
managementadministrator

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

・ 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*	Payment of unpaid dividends can be handled at the Mizuho Bank, Ltd. Head Office or at
one of the branch offices.