Jfe Holdings, Inc. · TSE:5411
Jfe — FY2023 Earnings Presentation
90 slides from Jfe's earnings presentation, May 7, 2024
Slide 1: JFE Group Financial Results for Fiscal Year 2023
Securities Code：5411.T JFE Group Financial Results for Fiscal Year 2023 ending March 31, 2024 JFE Holdings, Inc. May 7, 2024 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 1
Slide 2: Aspirations as new CEO (Vision)
JFE-HD Aspirations as new CEO (Vision) 7th Mid-term plan︓Establish profit base that is resilient to external environment through “Structural reform” and “Shifting from quantity to quality” ⇒ Business profit* is expected to reach 335 billion yen in FY2024. *excluding inventory valuation 〈Vision︓Cre
Slide 3: Aspirations as new CEO (Key Challenges)
JFE-HD Aspirations as new CEO (Key Challenges） ① Make Keihin district land utilization the fourth pillar of future earnings Land Reuse in Keihin district Steel・Engineering・Trading Businesses ＋ ～Leads Japanʼs Carbon Neutrality～ ② 4 perspectives to improve Corporate Value Double Profitability • Accele
Slide 4: A table of contents
A table of contents Financial Highlights Progress of the 7th Medium-Term Business Plan ・Economic Sustainability ・Environmental & Social Sustainability JFE Holdingsʼ Financial Results for Fiscal Year 2023 (April 1, 2023 to March 31, 2024) Financial Forecast for Fiscal Year 2024 Dividends Ap
Slide 5: Financial Highlights
JFE-HD Financial Highlights FY2023: Amid the challenging business environment, the business profit* increased sharply by 133.4 billion yen from the previous fiscal year due to improvements in domestic sales prices and structural reforms that reduced fixed costs. FY2024: The business profit* is e
Slide 6: Profitability Targets and Main Performance
JFE-HD Profitability Targets and Main Performance The 7th mid-term business FY2021 FY2022 FY2023 FY2024 plan Actual Actual Actual Forecast FY2024 Business Profit ¥416.4bn. ¥235.8bn. ¥298.2bn. ¥300.0bn. Consolidated ¥320.0bn. [Excluding Inventory Valuation etc.] [¥222.4bn.] [¥162.8bn] [¥296.2bn.] [¥3
Slide 7: Progress of the 7th Medium-Term Business Plan (Economic Sustainability)
Progress of the 7 th Medium-Term Business Plan （Economic Sustainability） Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 7
Slide 8: Trends in steel business earnings
JFE Steel Trends in steel business earnings We have established a management system that can secure profits even when crude steel production and export markets are weak. Segment profit * for fiscal 2024 is expected to exceed the 7 th mid-term target of 230 billion yen. (Earnings per ton * are ex
Slide 9: Improving of sales price and Product-mix enhancements
JFE Steel [Main initiatives of Steel Business] Improving of sales price and Product-mix enhancements FY2023: The spread including prices * improved FY2023: The ratio of high value-added products * significantly to + 5,000 yen/t (main raw material was about 48% due to expansion of sales of spread
Slide 10: Structural reforms, cost reductions, etc.
JFE Steel [Main initiatives of Steel Business] Structural reforms, cost reductions, etc. Due to shutdown of upstream facilities and hot rolling facilities in Keihin in September 2023, the structural reform in the current mid-term has completed. Achieved a reduction in fixed costs (45 billion yen)
Slide 11: Profit Trends in Engineering and Trading Businesses
JFE Engineering, JFE Shoji Profit Trends in Engineering and Trading Businesses As the profitability of Engineering business and Trading business improved, we expect to achieve segment profit of 70 billion yen/year level steadily in the 7th mid-term business plan. 80 3) Waste to Resource Segment prof
Slide 12: Main initiatives on Engineering and Trading Businesses
JFE Engineering, JFE Shoji (Reference) Main initiatives on Engineering and Trading Businesses in 7th mid-term business plan EN︓Engineering business SH︓Trading business (SH)Increase capacity (SH) Establishment of electrical steel sheet of JSC processing and sales company, Serbia (EN)Collective orders
Slide 13: Progress of the 7th Medium-Term Business Plan (Environmental & Social Sustainability)
Progress of the 7 th Medium-Term Business Plan （Environmental & Social Sustainability） Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 13
Slide 14: CO2 Emissions-reduction in JFE Steel
JFE Steel CO2 Emissions-reduction in JFE Steel CO 2 emissions-reduction is progressed in FY2023 as planned 1) , and the FY2024 year-end target expect to be achieved. 1) FY2023 emission result will be reported in JFE Group Report 2024. Capital investment to achieve the FY2024 year-end target was
Slide 15: Progress in Development of Ultra-innovative Technologies
JFE Steel Progress in Development of Ultra-innovative Technologies Regarding CR blast furnace, a large amount of methane blowing test was carried out in the actual blast furnace (Keihin blast furnace before the shutdown), and it was confirmed that the in-furnace reaction was as expected*. Based on
Slide 16: Other Topics on Carbon Neutrality
JFE Steel Other Topics on Carbon Neutrality Initiatives for Green Steel Sales of JGreeXTM, a green steel applying the mass balance method, started in FY2023. Sold at a premium price with additional CO2 reduction value for shipbuilding, construction, and transformers, etc. In FY2024, we aim to ex
Slide 17: JFE steel's contribution to CO2 reduction - Eco Product
JFE Steel JFE steel’s contribution to CO2 reduction - Eco Product Top grade electrical steel sheets Steel plates for offshore wind power *Doubling capacity for producing Kurashiki NO #1 top-grade NO(Non-oriented electrical steel sheet). Production of Large and heavy steel plate CAPEX Approx. 49.
Slide 18: JFE Engineering's contribution to CO2 reduction
JFE Engineering JFE Engineeringʼs contribution to CO2 reduction Contributions to CO2 emissions reduction in FY2023 was 11.53million tons (Target: 11.50million tons) Contributions to CO2 emissions reduction 25.00 (million tons/year) 11.14 11.53 12.00 FY2013 FY2022 FY2023 FY2024 FY2030 FY2050 Target
Slide 19: Consolidated Results for Fiscal Year 2023
Consolidated Results for Fiscal Year 2023 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 19
Slide 20: Financial Results for Fiscal Year 2023
JFE-HD Financial Results for Fiscal Year 2023 Business profit in FY2023 was ¥298.2bn. (increased by ¥8.2bn. from previous forecast, increased by ¥62.4bn. year-on-year) Profit attributable to owners of parent in FY2023 was ¥197.4bn. FY2022 FY2023 FY2023 Change Change FY2022→ Forecast Actual Forec
Slide 21: Financial Results for Fiscal Year 2023 (by Segment)
Financial Results for Fiscal Year 2023 JFE-HD (by Segment) FY2022 FY2023 FY2023 Change Change FY2022→ Forecast Actual Forecast Actual FY2023 →Actual （billion yen） Full Year Full Year 1H 2H Full Year Full Year Full Year Steel Business 3,881.1 3,760.0 1,865.8 1,850.2 3,716.0 (165.1) (44.0) Engineering
Slide 22: JFE Steel Financial Results for Fiscal Year 2023
JFE Steel Financial Results for Fiscal Year 2023 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 22
Slide 23: Financial Results for Fiscal Year 2023
JFE Steel Financial Results for Fiscal Year 2023 FY2022 FY2023 FY2023 Unit Previous Full Full 1H 2H Forecast Year 3Q 4Q Year billion Revenue yen 3,881.1 1,865.8 915.6 934.6 1,850.2 3,716.0 3,760.0 billion Segment Profit 146.8 122.8 48.2 31.7 79.8 202.7 200.0 yen Excluding Inventory billion Valuation
Slide 24: ¥2.7bn. Increase in JFE Steel's Segment Profit (Forecast vs Actual)
JFE Steel ¥2.7bn. Increase in JFE Steel’s Segment Profit (FY2023 (Forecast) vs. FY2023(Actual)) （billion yen） FY2023 FY2023 Change JFE Steel Forecast actual Segment Profit 200.0 202.7 2.7 Excluding Inventory Valuation etc. 205.0 200.7 (4.3) 1. Cost ±0.0 2. Volume • Crude Steel Production and Mix (6.
Slide 25: ¥55.9bn. Increase in JFE Steel's Segment Profit (FY2022 vs FY2023)
JFE Steel ¥55.9bn. Increase in JFE Steel’s Segment Profit (FY2022 (Actual) vs. FY2023 (Actual)) （ billion yen ） FY2022 FY2023 Change JFE Steel Actual Actual Segment Profit 146.8 202.7 55.9 Excluding Inventory Valuation etc. 73.8 200.7 126.9 1. Cost • Structural reforms effect +20.0 • Operational imp
Slide 26: JFE Engineering JFE Shoji Financial Results for Fiscal Year 2023
JFE Engineering JFE Shoji Financial Results for Fiscal Year 2023 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 26
Slide 27: Financial Results for Fiscal Year 2023
JFE Engineering, JFE Shoji Financial Results for Fiscal Year 2023 JFE Engineering: Revenues reached a record high for the second straight of ¥539.9bn. (up ¥27.4bn. from FY2022) Segment profit was ¥24.3bn., in line with the previous forecast. JFE Shoji: Segment profit was ¥48.9bn., increased by ¥
Slide 28: Financial Forecast for Fiscal Year 2024
Financial Forecast for Fiscal Year 2024 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 28
Slide 29: Current Business Environment (Steel Business)
JFE Steel Current Business Environment（Steel Business） • Domestic: In the automotive sector, activity levels remained steady despite the impact of certification issues and disasters. On the other hand, the postponement of demand continued due to the labor shortage and the surge in materials mainly i
Slide 30: Financial Forecast for FY2024 (Steel Business)
JFE Steel Financial Forecast for FY2024 (Steel Business) Crude Steel Production (JFE Steel standalone) for FY2024 approx. 23.4Mt Exchange Rate 150 yen/$ FY2023 FY2024 Mid-Term Change Change Actual Forecast FY2024 (B)-(A) (B)-(C) (billion yen) (A) (B) (C) Segment Profit 202.7 205.0 2.3 Excluding Inve
Slide 31: Financial Forecast for FY2024 (Engineering Business)
JFE Engineering Financial Forecast for FY2024 (Engineering Business) FY2023 FY2024 7 th (Actual) (Forecast) Change Change Mid-term (A) (B) (B)-(A) (B)-(C) (billion yen) (C) Orders 563.0 600.0 37.0 Revenue 539.9 580.0 40.1 650.0 (70.0) Segment Profit 24.3 20.0 (4.3) 35.0 (15.0) Comparison with the pr
Slide 32: Financial Forecast for FY2024 (Trading Business)
JFE Shoji Financial Forecast for FY2024 (Trading Business) FY2023 FY2024 7 th Change Change (Actual) (Forecast) Mid-term (B)-(A) (B)-(C) (A) (B) (C) (billion yen) Segment Profit 48.9 50.0 1.1 40.0 10.0 Comparison with the previous fiscal year • Segment profit is expected to increase by ¥1.1bn. from
Slide 33: Financial Forecast for FY2024
JFE-HD Financial Forecast for FY2024 FY2023 FY2024 Change （billion yen） Actual(A) Forecast(B) (B-A) Revenue 5,174.6 5,390.0 215.4 Business Profit 298.2 300.0 1.8 [Excluding Inventory Valuation etc.] [296.2] [335.0] [38.8] Steel Business 202.7 205.0 2.3 Engineering Business 24.3 20.0 (4.3) Trading Bu
Slide 34: Dividends
Dividends Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 34
Slide 35: Dividends
JFE-HD Dividends JFE Holdings has decided to propose at its general meeting of shareholders a year-end dividend of 50 yen per share, as previously announced. (annual dividend: 100 yen) The annual dividend for FY2024 is expected to be 110 yen per share, based on our payout ratio policy of approxi
Slide 36: Appendix(1) Profit/Loss Analysis
Appendix(1) Profit/Loss Analysis Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 36
Slide 37: Main Financial Data
JFE-HD Main Financial Data JAAP 【IFRS】 FY15 FY16 FY17 FY18 FY18 FY19 FY20 FY21 FY22 FY23 (bn. Yen, times) (bn. Yen, times) Ordinary Income 64.2 84.7 216.3 221.1 Business profit 232.0 37.8 -12.9 416.4 235.8 298.2 EBITDA 254.4 279.9 388.8 405.9 EBITDA ＊1 428.2 269.4 223.4 668.7 505.4 572.3 ROS 1.9% 2.
Slide 38: Cash Flow Improvements, Debt/EBITDA Ratio
JFE-HD Cash Flow Improvements, Debt/EBITDA Ratio Net debt* was decreased to ¥1,587.1bn. by ¥156.4bn. from FY2022 due to increase in cash and deposits by the capital increase. Debt/EBITDA ratio was improved to x3.2. *Net Debt = Debt - Cash and cash equivalents. Consolidated Cash Flow in FY2023 Pr
Slide 39: Financial Results for Fiscal Year 2023
JFE Steel Financial Results for Fiscal Year 2023 FY2021 FY2022 FY2023 Unit Full Full Full 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Year Year Year billion Revenue yen 638.5 771.9 832.8 930.2 3,173.4 932.6 986.3 986.9 975.3 3,881.1 917.2 948.6 915.6 934,6 3,716.0 Segment billion 69.7 88.8 93.5 71.7 323.7 9
Slide 40: ¥43.0bn. Decrease in JFE Steel's Segment Profit (1H vs 2H)
JFE Steel ¥43.0bn. Decrease in JFE Steel’s Segment Profit (FY2023.1H vs. FY2023.2H) （billion yen） FY2023 Actual Change JFE Steel (1H→2H) 1H 2H Full Year Segment Profit 122.8 79.8 202.7 (43.0) Excluding Inventory Valuation etc. 123.8 76.8 200.7 (47.0) 1. Cost • Structural reforms effect＋20.0 ＋28.0 •
Slide 41: ¥16.5bn. Decrease in JFE Steel's Segment Profit (3Q vs 4Q)
JFE Steel ¥16.5bn. Decrease in JFE Steel’s Segment Profit (FY2023.3Q vs. FY2023.4Q) （billion yen） FY2023(Actual) JFE Steel Change Full 1Q 2Q 3Q 4Q (3Q→4Q) Year Segment Profit 68.1 54.7 48.2 31.7 202.7 ▲16.5 Excluding Inventory Valuation etc. 59.1 64.7 49.2 27.7 200.7 ▲21.5 1. Cost ±0.0 2. Volume and
Slide 42: Appendix(2) Business Environmental Indicators, etc.
Appendix(2) Business Environmental Indicators, etc. Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 42
Slide 43: Current Business Environment (Domestic)
JFE Steel Current Business Environment（Domestic） 【Outlook for Domestic Auto Production】 【Trends by sector 】 10,000 units. • Despite the impact of certification issues and other factors, mobile Auto- each company is facing backorders, production 200 motivation is high, and activity levels are expecte
Slide 44: Current Business Environment (Overseas)
JFE Steel Current Business Environment（Overseas） 【 Real GDP Growth Forecast in 2024 】 【World Steel Demand Forecasts(CY)】 World US China India ASEAN-5 Unit：100 million tons 9.0 2023 Actual 3.2% 2.5% 5.2% 7.8% 4.2% World Jan.2024 3.1% 2.1% 4.6% 6.5% 4.7% Forecast China Apr.2024 Forecast 3.2% 2.7% 4.6%
Slide 45: Combined Inventories of HR, CR and Coated Steel Sheet
JFE Steel Domestic Combined Inventories of HR, Market Environment CR and Coated Steel Sheet （000ｔ） （month） 5,000 5 Maker Whole Saler Coil Center Inventory Ratio(Right axis) 4,000 4 3,000 3 2,000 2 From From Feb,2024 Jan,2024 Feb,2023 previous previous 1,000 month year 1 Inventories +54 -150 4,061 4,
Slide 46: Inventories of Plate and Wide Flange Shapes
JFE Steel Domestic Inventories of Plate (Plate Shear) Market Environment and Wide Flange Shapes Inventories of Wide Flange Shapes （000ｔ） Inventories of Plate (Plate Shear)x （month） （000ｔ） （month） 500 3.5 250 Inventories 3.5 Inventories Shipment Inventory Ratio(Right axis) Inventory Ratio(Right axis)
Slide 47: Trend of Import Steel (Ordinary Steel)
JFE Steel Domestic Market Environment Trend of Import Steel (Ordinary Steel) （000ｔ） 600 S.Korea China Taiwan Others 500 400 300 200 Unit: 000t From From Feb,2024 Jan,2024 Feb,2023 Previous Previous 100 Month Year -16 ＋10 Import Steel 389 406 379 (‐4.0%) (+2.7%) 0 Jan Mar May Jul Mar May Jul Sep Jan
Slide 48: Price Trend of Import Steel
JFE Steel Domestic Market Environment Price Trend of Import Steel （000yen/ｔ） 120 110 100 90 80 70 60 50 40 Oct Oct Oct Oct Oct Oct Jul Oct Jul Jan Oct Jul Jan Jul Jan Apr Jul Jan Apr Jul Jan Apr Jul Jan Apr Jul Jan Apr Jan Apr Jan Apr Apr 2016 2017 2018 2019 2020 2021 2022 2023 2024 Data: The Japan
Slide 49: Crude Steel & Im/Export, China
JFE Steel Overseas Crude Steel & Im/Export, China Market Environment （Mt） （Mt） 12 120 Export（Left axis） Import（Left axis） Crude steel（Right axis） 10 100 8 80 6 60 4 40 Apr,2023 Mar, From Jan,-Mar, From From -Mar, 2024 Previous 2024 Apr,2023- Jan,-Mar,2023 2024 month Mar,2024 2 Crude Steel（Mt） 88.3 +
Slide 50: Inventories in China by Product
JFE Steel Overseas Market Environment Inventories in China by Product （Mt） 30.0 100.0% Bar Rod & Wire Plate HR CR Change by Previous year(%) 50.0% 25.0 0.0% 20.0 -50.0% 15.0 -100.0% -150.0% 10.0 -200.0% Mar,2024 From From Feb,2024 Mar,2023 5.0 Previous Previous Month Year -250.0% +0.5 +1.9 Inventory
Slide 51: Metal Spread Trend (Chinese Spot Basis)
JFE Steel Overseas Metal Spread Trend Market Environment (Chinese Spot Basis) （$/t) （$/t) 1000 1000 900 900 800 800 700 HRC 700 600 600 500 500 400 400 300 300 200 200 Metal 100 Spread 100 0 0 Metal Spread ＝ HRC Price － Raw Materials Cost *HRC Price： Chinese Spot basis Raw Materials Cost： Calculated
Slide 52: Raw materials market trends
JFE Steel Raw Materials Raw materials market trends $225 $700 Iron Ore（Iron Ore Fines from Australia） Coking Coal（Hard Coking Coal from Australia） $200 ($/DMT) $600 ($/WMT) $175 Term- $500 Contract FOB $150 $400 $125 Term- Contract FOB $300 $100 $200 $75 $50 $100 21/4 21/7 21/10 22/1 22/4 22/7 22/10
Slide 53: Trend of Sub Material's Market Price
(￠/lb) 60 110 160 210 260 1,000 1,400 1,800 2,200 2,600 600 2016.6 2016.6 2016.12 FeCr 2016.12 2017.6 (US$/t) FeMn 2017.6 2017.12 2017.12 2018.6 2018.6 2018.12 2018.12 2019.6 2019.6 2019.12 2019.12 2020.6 2020.6 2020.12 Raw Materials 2020.12 2021.6 2021.6 2021.12 2021.12 2022.06 2022.06 2022.12 2022
Slide 54: Trend of Sub Material's Market Price
JFE Steel Raw Materials Trend of Sub Material’s Market Price （yen/ｔ） Scrap ($/B) Spot Bulker 70,000 100,000 90,000 60,000 80,000 50,000 70,000 60,000 40,000 50,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 0 2016.1 2016.7 2017.1 2017.7 2018.1 2018.7 2019.1 2019.7 2020.1 2020.7 2021.1 2021.7 2
Slide 55: Orders by Business Field
JFE Engineering Orders by Business Field （billion yen） Business FY2022 FY2023 Main orders received in FY2023 Change Field Actual Actual ★・・・New projects received in 4Q of FY2023 Construction works of domestic waste treatment facility [Mie, Hokkaido, ★Chiba, ★Fukuoka] Waste Renewal works of domestic
Slide 56: Order Trends in Engineering Business
JFE Engineering Order Trends in Engineering Business （billion yen） 6 th mid- 7 th mid-term business plan term FY2021 FY2022 FY2023 FY2024 (Average) (Ave.) Actual Actual Actual Forecast Orders Total 465.6 505.8 564.9 563.0 600.0 558.4 Waste to Resource 193.1 203.9 216.9 243.7 280.0 236.1 Carbon Neutr
Slide 57: Links to the Reports Published during FY2023
JFE-HD Links to the Reports Published during FY2023 Report URL QR code JFE Group REPORT https://www.jfe- 2023 holdings.co.jp/en/investor/library/gro up-report/index.html Sustainability REPORT https://www.jfe- 2023 holdings.co.jp/en/sustainability/index. html Sustainability REPORT https://www.jfe- 20
Slide 58: Appendix(3) The 7th Medium-Term Business Plan
Appendix(3) The 7th Medium-Term Business Plan Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 58
Slide 59: Mid/long-term directions
JFE-HD Mid/long-term directions Biggest transformation in company’s history aimed at achieving global success JFE’s corporate vision Contributing to society with the world’s most innovative technology JFE’s mission To be essential to society’s sustainable development and to create safe, comfortable
Slide 60: Initiatives to achieve environmental and social sustainability
JFE-HD Initiatives to achieve environmental and social sustainability (helping to solve critical issues) E JFE Group Environmental Vision for 2050 • Aim to realize carbon neutral by 2050, taking climate change as an extremely important business concern for JFE • Accelerate R&D in new technologies an
Slide 61: JFE Group Environmental Vision for 2050
JFE-HD JFE Group Environmental Vision for 2050 Toward Carbon Neutrality by 2050 JFE Group Environmental Vision for 2050 （GX Investment during 7th mid-term business plan：340 billion yen) GX：Green transformation 1. Key environmental initiative under 7 th mid-term business plan • Steel business：Reducti
Slide 62: JFE Group's activities for Carbon neutrality
JFE-HD JFE Group’s activities for Carbon neutrality Steel Business: CO₂ emission reduction by 18% at the end of FY2024 (vs. FY2013) Through decarbonization in steel manufacturing processes etc., JFE Group aims to be carbon neutral. Engineering Business: Contribute to carbon neutrality in society on
Slide 63: [Steel Business] Roadmap for Carbon Neutrality
JFE Steel [Steel Business] Roadmap for Carbon Neutrality Revised our roadmap for realizing carbon neutrality in 2050, considering installing the technologies below in the concrete: Carbon recycling blast furnace: Each established technology to be installed in order (late 2030s） Hydrogen-based ir
Slide 64: Carbon-recycle Blast Furnace
JFE Steel Carbon-recycle Blast Furnace • Technologies for reducing CO₂ emissions from blast furnaces are necessary to maximize blast furnaces’ advantages such as mass production, high-efficiency production, and high-grade steel production • Combining carbon-recycling blast furnace with CCU enables t
Slide 65: Groupwide commercialization of offshore wind-power business
JFE-HD Groupwide commercialization of offshore wind-power business (Study feasibility) • Become a pioneer in offshore wind-power generation business by commercializing manufacture of monopile and other seabed-fixed structures. • Establish groupwide supply-chain such as monopile-structure manufacturi
Slide 66: Social sustainability: Safety management, HR issues
JFE-HD Social sustainability：Safety management, HR issues Further increase efforts to prevent accidents not only by using facilities but management also through safety education and obedience of rules, in order to achieve top-priority goal of zero major accidents. Safety Groupwide investment for saf
Slide 67: Social sustainability: Contribution to Regional Societies through Engineering
JFE Engineering Social sustainability：Contribution to Regional Societies through Engineering Business • Expand bases of local production and local consumption business (Food-recycling business and regional PPS business) • Contribute to the regional society considering to expand combined utility serv
Slide 68: Establish economic sustainability (stable earnings power)
JFE-HD Establish economic sustainability (stable earnings power) Establish sufficient profitability and stable financial base for proactive business operation for the mid/long-term growth 1. Shift focus of domestic steel business from quantity to quality ーPursue world-class earnings power • Achieve
Slide 69: 7th mid-term business plan <Steel Business>
JFE Steel 7 th mid-term business plan <Steel Business> Aim to achieve world-class per-ton profit and enhance strategies for global growth Promote innovation for carbon neutrality Main initiatives 1. Transition to a lean, robust business structure by shifting focus from quantity to quality 2. Expand
Slide 70: Transition to a lean, robust business structure
JFE Steel Transition to a lean, robust business structure by shifting focus from quantity to quality Improve per-ton profit by both fixed cost reduction and increase of high value- added products ratio, and enhance earning base. Achieve world-class cost Expand margins and quality competitiveness and
Slide 71: Expand and Accelerate Overseas Business
JFE Steel Expand and Accelerate Overseas Business • Expand returns from 1. vertical specialization business such as steel production applied for automobiles • Further deepen integrated production in high-demand market (2. “Insider” business) • Expand 3. solution business, in which we provide cutting
Slide 72: Strategy to Capture Growing Demand for Electrical Steel Sheet
JFE Steel Examples of Steel Business’s Critical Initiatives: Strategy to Capture Growing Demand for Electrical Steel Sheet Domestic To expand non-oriented Overseas To conduct FS of grain-oriented electrical steel sheet (N/O) electrical-steel-sheet JV with JSW production capacity Released April 1, 20
Slide 73: JFE Group-wide Strategy for Electrical Steel Sheet
JFE-HD JFE Group-wide Strategy to Capture Growing Demand for Electrical Steel Sheet（Steel Business and Trading Business） JFE Steel JFE Shoji Production of Expand production and supply Processing and electrical steel function of high value-added World’s No.1 global distribution distribution of sheets
Slide 74: 7th mid-term business plan <Engineering Business>
JFE Engineering 7 th mid-term business plan <Engineering Business> Expand sales revenue to 1-trillion-yen level in FY2030 Targets • Revenue 650.0 billion yen FY2024 • Segment Profit 35.0 billion yen （billion yen） （billion yen） 【Segment profit】 【Revenue】 1-trillion-yen level 40 35.0 1,000 650.0 30 24
Slide 75: Engineering Business's Main initiatives
JFE Engineering Engineering Business’s Main initiatives ーEnhancing mid/long-term priority areasー • Expand engineering business as a growth sector by helping to solve pressing issues in global society, in view of increasing importance of the environmental, recycling and renewable- energy fields. • Ex
Slide 76: 7th mid-term business plan <Trading Business>
JFE Shoji 7 th mid-term business plan <Trading Business> Establish growth foundation by enhancing SCM Target FY2024 Segment profit 40bn. （bn.） 40 【Segment Profit】 27.6 ¥40 billion 23.5 20.3 20 Equipment & Business Investment ： Approx. ¥120 billion over 4 years 0 4th mid-term ave. 5th mid-term ave. 6
Slide 77: Trading Business's Main initiatives
JFE Shoji Trading Business’s Main initiatives ーKey Strategies for growth, Strengthen purchasing and sales capabilitiesー Strengthen SCM of Automotive steel Fully Capture steel demand in Japan Enhance SCM for high-tensile steel both in Increase earnings by enhancing JFE Group’s overseas and domestic m
Slide 78: JFE Group's DX strategies
JFE-HD JFE Group’s DX strategies • Promote DX in every business area such as advancing productivity through innovation, transforming exiting businesses and creating new businesses. • Proactively invest money and human resource necessary for DX： DX investment approx. 120 billion yen over 4 years JFE
Slide 79: Balance Financial Soundness with Effective Investment
JFE-HD Balance Financial Soundness with Effective Investment based on a “select and concentrate” approach • Selective maintenance investment, focusing on investments for enhancing competitiveness and establishing stable profit base • Ensure earning source by asset compression 1. Equipment & Business
Slide 80: Main Financial Data and Performance & Profitability Targets
JFE-HD Main Financial Data and Performance & Profitability Targets 7 th mid-term FY2020 business plan Actual FY2024 Business profit ¥ 320.0 billion ¥ -12.9 billion Consolidated Profit attributable to owners of the parent ¥ 220.0 billion ¥ -21.8 billion ROE 10% -1.3% Debt/EBITDA About 3x 8.1x D/E*1 A
Slide 81: Appendix(4) JFE Steel Carbon Neutral Strategy Briefing
Appendix(4) JFE Steel Carbon Neutral Strategy Briefing Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 81
Slide 82: Carbon Neutrality Vision 2050
JFE Steel’s Carbon Neutrality Vision 2050 Oxygen Fuel/oxygen + Store CO2 in slag/concrete CCS Storage Reduction gas powder material Converter CO2 CCS More energy-saving equipment Increased use of scrap Carbon-free (external conditions) Introduce EAFs electricity (external conditions) CCS Energy savi
Slide 83: JFE Steel's Transition: Direction and Challenges
JFE Steel’s Transition: Direction and Challenges ▶ Developing technologies to produce high-quality and high-functional steel in the GI Fund project by using technologies to utilize hydrogen in the blast furnace process and direct-reduction steelmaking as well as EAFs. ▶ Considering the transition of
Slide 84: JFE's Carbon Neutrality Action Plan
JFE’s Carbon Neutrality Action Plan ▶ JFE Steel is introducing low-carbon steel processes during its “transition period” to 2030. ▶ In its “innovation period” from 2030 to 2050, JFE Steel aims to develop and implement ultra- innovative technologies for carbon neutrality. Transition period Innovation
Slide 85: Progress on the CO2 Emissions Reduction Plan
Progress on the CO 2 Emissions Reduction Plan ▶ Moving forward according to the FY2022 plan, achieving a 13% reduction. Also expecting to achieve the FY2024 year end target. ▶ Making solid progress in investment approval and implementation to achieve the reduction targets. Already approved for appro
Slide 86: Projects Supported by the Green Innovation Fund
Projects Supported by the Green Innovation Fund ▶ Promoting the development of ultra-innovative technologies in the NEDO project on hydrogen utilization in iron and steelmaking processes, financed by the Green Innovation (GI) Fund. ▶ Started building a small test blast furnace (150m 3 ) in Chiba Dis
Slide 87: Overall Scale of GI Fund Projects
Overall Scale of GI Fund Projects ▶ Development toward Stage Gate Reviews scheduled mainly in FY2025–2026 ▶ Studies also underway with a view to actual implementation in 2030–2040s ★ Stage Gate Develop technologies & conduct Medium-scale Large/full-scale small-scale tests tests tests 2021〜2025 2026〜
Slide 88: Stimulating Demand for Green Steel
Stimulating Demand for Green Steel ▶ In the EU, green steel is branded and sold using a mass balance approach. ▶ Achieving 30% CO2 reduction by FY2030 will enable JFE Steel to supply up to 5M tons of green steel per year using the same approach. ▶ To create a carbon-neutral world, government policie
Slide 89: Collaborating with Society on Carbon Neutrality
Collaborating with Society on Carbon Neutrality ▶ While achieving carbon neutrality is a top management priority for JFE Steel, generating environmental value involves large investments and cost increases associated with transitioning, requiring efforts beyond the private company level. ▶ Mechanisms
Slide 90: Copyright © 2024 JFE Holdings, Inc. All Rights Reserved
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 90