Nippon Steel Corp. · TSE:5401
Nippon Steel — Shareholder Meeting (June 2024)
28 slides from Nippon Steel's shareholder meeting presentation, Jun 21, 2024
Slide 1: Nippon Steel's Business Strategies and Coming Measures
Nippon Steel’s Business Strategies and Coming Measures 1
Slide 2: Business strategy / Performance summary / Decarbonization strategy
Decarboni- Business Performance zation strategy summary strategy 2
Slide 3: Developing a robust business structure with vertical and horizontal
Overview: Developing a robust business structure with vertical and horizontal Vertical Raw Rebuild domestic material business steel business Deepen and expand Operational Overseas supporters Domestic business overseas business Stainless steel EAFs steel ASEAN Horizontal (Steel group companies) busin
Slide 4: Domestic steel business: Rebuilding
Domestic steel business: Rebuilding Financial End of FY2019 End of FY2024 resources 2023 Production Blast furnace 15 10 ▼33% facility Units 2019 2019 structural Crude steel Reduction measures Production Capacity 50 40Mt/Y ▼20% in fixed cost Improvement (Non-consol. + Nippon Steel Stainless Steel) In
Slide 5: New business opportunities capturing social changes
New business opportunities capturing social changes Response to Climate Change (GX) Business opportunities Energy Electrification of Utilize NS’ advanced structural reform automobiles technologies for development of new steel products and Decarbonization National solutions needs in industrial comple
Slide 6: Overseas: Deepening and expanding in key bases
Overseas: Deepening and expanding in 3 key bases Markets where steel demand growth is promising Expansion of integrated steel production bases Markets where Nippon Steel’s technologies and products are highly valued M&A, acquisition of brownfield production bases Growing India Home market ASEAN
Slide 7: Acquisition of U. S. Steel
Acquisition of U. S. Steel Combining the strengths of both companies to help U.S. Steel grow further Product Strong business assets technologies that organically combine iron ore mines, BFs, and EAFs Equipment Decarboni- Extensive U.S. and zation operation technologies customer bases technologie
Slide 8: Toward the Global Crude Steel Capacity 100 Mt Vision
Toward the “Global Crude Steel Capacity 100 Mt” Vision Domestic facility structural measures Decrease in domestic crude steel production capacity Overseas business expansion Global crude steel production capacity to 100 mln tons [Global crude steel production capacity*] 10,000 tons per year 10,000 1
Slide 9: Roadmap for growth strategy
Roadmap for growth strategy FY2023 FY2024 FY2025 FY2026～ Cost down End of FY2024 Termination of Kashima’s Facility structural measures About ¥100 bln One series of upstream facilities, large shape Total ¥150 bln mill and steel plate mill Sophisti- Electrical steel sheet Full operation at 1H FY2027 Y
Slide 10: Securing/promoting human resources (Human capital management)
Securing/promoting human resources (Human capital management) Social situation: Declining working population and increasing mobility of workers NS: Promote diverse management strategies Raise NS’ Recruit Increase Revise benefits, engagement profile experienced compensation personnel Internal recruit
Slide 11: Business strategy / Performance summary / Decarbonization strategy
Decarboni- Business Performance zation strategy summary strategy 11
Slide 12: Business environment: Harsh overseas market conditions
Business environment: Harsh overseas market conditions Decrease in domestic steel demand Continued high-level production Sluggish overseas China steel market Increase in steel exports Growth in domestic steel demand Persistently high raw material prices India Increase in steel production Serious dec
Slide 13: China's steel supply and demand: High production and increased exports
China’s steel supply and demand: High production and increased exports amid a decline in domestic demand 1,200tons per year Million 1,100 1,000 Crude steel Crude steel 1,000 production production 900 900 Steel About 800 demand (Crude steel 100mln tons 800 700 conversion) 600 700 500 Steel demand (Cr
Slide 14: Toward the Vision of ¥1 trillion in underlying business profit
Earnings growth in a challenging environment: Toward the Vision of ¥1 trillion in underlying business profit Three non-steel segments Target Other group companies ¥1trn Raw material business Overseas steel business 9,350 9,000 or higher Domestic steel business 7,500 Contribution 7,340 or higher from
Slide 15: Business strategy / Performance summary / Decarbonization strategy
Decarboni- Business Performance zation strategy Summary strategy 15
Slide 16: Steel industry's challenges to achieving carbon neutrality
Steel industry’s challenges to achieving carbon neutrality (CN) Most of the CO2 emissions (Scope 1 to 3) in the entire supply chain of the steel industry is generated by the production process (Scope 1), particularly the key process for Technical reducing iron ore in blast furnaces. → Need for inn
Slide 17: Steelmaking processes toward carbon neutrality: Technology options
Steelmaking processes toward carbon neutrality: Technology options • Scrap steel alone is not enough to meet global steel demand, and iron ore reduction is essential • There are two types of mass steelmaking processes: the blast furnace (BF) method (reduction + melting) and the electric arc furnace
Slide 18: Carbon-neutral steelmaking process
Carbon-neutral steelmaking process 3 Breakthrough technologies Stable supply of Stable supply of Nippon Steel is challenging Scrap green hydrogen green power Iron ore at reasonable cost at reasonable cost 3 external conditions INPUT for which gov’t support is required Coking coal Direct hydrogen red
Slide 19: Developing & implementing breakthrough technologies
Developing & implementing breakthrough technologies 2022 2023 ～2030 ～2050 Hirohata EAF Accumulated knowledge of high-grade steelmaking in EAF Hirohata EAF expanded High-grade steel started commercial production operation Started full-scale study on shift to EAF Achieve carbon neutral production prod
Slide 20: 3 challenges for achieving a carbon-neutral society
3 challenges for achieving a carbon-neutral society • Discovery of technology development seeds and Technology securing of budget (completed) development • A development project is underway • Technical review for implementation (in progress) Predictability • Determine the predictability of investmen
Slide 21: Efforts to surmount the 3 challenges
Efforts to surmount the 3 challenges Technology Gov’t support in development Green Innovation (GI) Fund ･･･ Budgeting development planning and testing "Utilization of hydrogen in the steelmaking process“ ¥193.5 bln ➡ Raised to ¥449.9 bln completed Gov’t support for One-third of the total investment
Slide 22: Thank you, our shareholders, for your continued understanding and support
Thank you, our shareholders, for your continued understanding and support 22
Slide 23: P1. Nippon Steel's business challenges and measures to be taken
P1. Nippon Steel’s business challenges and measures to be taken I am Imai, President and COO. I would like to explain our business strategy and the planned measures. P2. Business strategy First, on business strategy. P3. Overall view: Developing a robust business structure with vertical and horizont
Slide 24: Speaker notes: overseas business
Responding to changes in the social structure such as a declining workforce and the development of AI and other IT fields, we will utilize the latest technologies of the Nippon Steel Group to improve productivity and accelerate DX. P. 6. Overseas business As for overseas business, we plan to acquire
Slide 25: Speaker notes: human resources and performance summary
Even under a social environemnt such as a declining workforce andincreasing mobility in the labor market, we need to execute the diverse business strategies we have mentioned. Needless to say, the key to success is our people. To improve our productivity as a whole, we will maximize the capabilities
Slide 26: Speaker notes: dividends and decarbonization strategy
As for dividends, we are proposing a resolution today to set a dividend of 160 yen per share for fiscal 2023. For fiscal 2024 as well, we plan to maintain a dividend of 160 yen, in order to maintain a high level of shareholder returns despite the anticipated temporary decline in profits. P15. Decarb
Slide 27: Speaker notes: carbon-neutral steelmaking process
be the rather feasible approach when targeting 2030. P18. Carbon-neutral steelmaking process With the above considerations in mind, we present here our carbon-neutral steelmaking process. Hydrogen injection in BFs, direct hydrogen reduction of iron, and high-grade steel production in large-scale EAF
Slide 28: Speaker notes: concluding remarks
described here. We will continue our efforts to provide appropriate disclosure on these criteria. P22. Concluding I have explained our management strategy and the actions to be taken. We are grateful to you, our shareholders, for your continued understanding and support. Thank you for your attention