Jfe Holdings, Inc. · TSE:5411

Jfe — Q3 FY2022 Earnings Presentation

87 slides from Jfe's earnings presentation, Feb 6, 2023

1. Slide 1: Financial Results through Third Quarter of Fiscal Year 2022

   Securities Code：5411.T JFE Group Financial Results through Third Quarter of Fiscal Year 2022 ending March 31, 2023 JFE Holdings, Inc. February 6, 2023 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 1

2. Slide 2: Key Points of today's Announcement

   JFE-HD Key Points of today’s Announcement Results for • Business profit in Apr-Dec of FY2022 was ¥231.0bn. 3Q of FY2022 • Full-year business profit is expected to be ¥235.0bn. (decreased by ¥20.0bn. from previous forecast） • Steel demand is expected to further decline under the previous forecast due

3. Slide 3: A table of contents

   A table of contents ➢ JFE Holdings’ Financial Results through Third Quarter of Fiscal Year 2022 (April 1 to December 31, 2022) and Financial Forecasts for Fiscal Year 2022 (April 1, 2022, to March 31, 2023) ➢ Dividends ➢ Financial Results through Third Quarter of Fiscal Year 2022 and Financial Forec

4. Slide 4: Consolidated Results through Third Quarter of Fiscal Year 22 and Forecast

   Consolidated Results through Third Quarter of Fiscal Year 2022 (April 1 to December 31, 2022) and Consolidated Financial Forecast for Fiscal Year 2022 (April 1, 2022 to March 31, 2023) Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 4

5. Slide 5: Financial Results through Third Quarter of Fiscal Year 2022

   JFE-HD Financial Results through Third Quarter of Fiscal Year 2022 ➢ Business profit in Apr-Dec of FY2022 was ¥231.0bn. (decreased by ¥91.8bn. year-on-year) FY2021 FY2022 Change （billion yen） Oct-Dec Apr-Dec Oct-Dec Apr-Dec Apr-Dec Revenue 1,154.4 3,097.3 1,344.2 3,908.5 811.2 Business Profit 123.9

6. Slide 6: Financial Results through Third Quarter of Fiscal Year 2022 (by Segment)

   JFE-HD Financial Results through Third Quarter of Fiscal Year 2022 (by Segment) FY2021 FY2022 Change （billion yen） Oct-Dec Apr-Dec Oct-Dec Apr-Dec Apr-Dec Steel Business 832.8 2,243.2 986.9 2,905.9 662.7 Engineering Business 129.8 359.1 130.9 349.9 (9.2) Trading Business 329.8 873.7 383.6 1,133.8 26

7. Slide 7: Financial Forecast for Fiscal Year 2022

   JFE-HD Financial Forecast for Fiscal Year 2022 ➢ Full-year business profit is expected to be ¥235.0bn. (decreased by ¥20.0bn. from previous forecast, decreased by ¥181.4bn. year-on-year) FY2022 Change Change FY2021 FY2022 FY2021→ Forecast Previous Actual (Previous) Forecast(Updated) FY2022 →Updated

8. Slide 8: Financial Forecast for Fiscal Year 2022 (by Segment)

   JFE-HD Financial Forecast for Fiscal Year 2022 (by Segment) FY2022 Change Change FY2021 FY2022 FY2021→ Forecast Previous Actual (Previous) Forecast(Updated) FY2022 →Updated （億円） （Updated） 1H 2H Full Year Full Year Full Year Full Year Full Year (Apr-Sep) (Oct-Mar) Steel Business 3,173.4 3,960.0 1,918

9. Slide 9: Demand for steel and Crude steel production

   JFE-HD Demand for steel and Crude steel production ➢ Due to the postponement of domestic demand in the residential & civil engineering construction sectors and continued weakness in overseas steel demand & market, Standalone crude steel production is expected to be approx. 24Mt, down 1Mt from previo

10. Slide 10: Initiatives for Improving Sales Price

    JFE-HD Initiatives for Improving Sales Price ➢ In the 2H of FY2022, overseas steel market price and Key raw material cost declined due to sluggish steel demand. ➢ Further sales price improvement is expected due to the reflections of metal and commodity costs*, overhaul of extra pricing, and enhancin

11. Slide 11: Maintaining Profit in a Tough Business Environment

    JFE-HD Maintaining Profit in a Tough Business Environment ➢ In 2H of FY2022, overseas metal spread is significantly declined, and production volume shrunk. ➢ The establishment of a stable and profitable business structure that is less affected by overseas steel market conditions and steel demand is

12. Slide 12: Dividend

    Dividend Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 12

13. Slide 13: Dividend

    JFE-HD Dividend ➢ JFE Holdings has decided to propose at its general meeting of shareholders a year-end dividend of 30 yen per share, which would bring the annual dividend of 80 yen per share. (yen/share) Pay-out Ratio 160 31.9% 33.5% N/A N/A 28.0% 30.9% 140 Interim devidend 120 Year-end dividend 10

14. Slide 14: JFE Steel Financial Results and Forecast

    JFE Steel Financial Results through Third Quarter of Fiscal Year 2022 and Financial Forecast for Fiscal Year 2022 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 14

15. Slide 15: Financial Forecast through Fiscal Year 2022

    JFE Steel Financial Forecast through Fiscal Year 2022 FY2021 Actual FY2022 Updated Forecast FY2022 Previous Unit Apr-Dec Full 1H Full Forecast 3Q 4Q 2H Actual Year Actual Year (Full Year) Actual Forecast billion Revenue yen 2,243.2 3,173.4 1,918.9 986.9 954.2 1941.1 3,860.0 3,960.0 Segment billion 2

16. Slide 16: 82.0Bn. Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 82.0Bn. Yen Decrease in JFE Steel’s Segment Profit (FY2021 Apr-Dec vs. FY2022 Apr-Dec) （ billion yen ） FY2021 FY2022 JFE Steel Change Apr-Dec 1H 3Q Apr-Dec Segment Profit 252.0 148.2 21.8 170.0 (82.0) Excluding Inventory 65.0 32.2 22.8 55.0 (10.0) Valuation etc. 1. Cost +5.0 • Cost reducti

17. Slide 17: Current Business Environment (Domestic)

    JFE Steel Current Business Environment（Domestic） ➢ Domestic demand in the residential and civil engineering construction sectors is the postponed and some customer’s production activity is slowing due to a slowdown in overseas economies. ➢ The level of activity in the auto sector is slightly behind

18. Slide 18: Current Business Environment (Overseas)

    JFE Steel Current Business Environment（Overseas） ➢ With weak domestic demand in China and the outlook uncertain in Europe and US due to the slowdown of economies, demand for steel overseas is currently weak and there were moves to adjust inventories. ➢ The supply and demand for steel products and ma

19. Slide 19: Raw materials (Steel Business)

    JFE Steel Raw materials（Steel Business） ◼ Key raw material • Iron ore bottomed out at the end of October 2022 and has been on an uptrend mainly due to expectations of a recovery in demand for steel products following China's easing of its zero-coronavirus policy. • Coking coal prices are on a downwa

20. Slide 20: 15.0bn. Decrease in JFE Steel's Segment Profit

    JFE Steel 15.0bn. Decrease in JFE Steel’s Segment Profit (FY2022 (Previous Forecast) vs. FY2022(Updated Forecast)) （billion yen） FY2022 FY2022 JFE Steel Previous Forecast Updated Forecast Change Segment Profit 165.0 150.0 (15.0) Excluding Inventory Valuation etc. 83.0 77.0 (60) 1. Cost (10.0) • Cost

21. Slide 21: 173.7Bn. Decrease in JFE Steel's Segment Profit

    JFE Steel 173.7Bn. Decrease in JFE Steel’s Segment Profit (FY2021 (Actual) vs. FY2022 (Forecast)) （billion yen） FY2021 FY2022 Change JFE Steel Actual Forecast Segment Profit 323.7 150.0 (173.7) Excluding Inventory Valuation etc. 129.7 77.0 (52.7) 1. Cost • Positive : Promote cost reductions ±0 Negat

22. Slide 22: 146.4Bn. Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 146.4Bn. Yen Decrease in JFE Steel’s Segment Profit (FY2022.1H vs. FY2022.2H) （billion yen） FY2022 Forecast Change JFE Steel 1H Actual 2H Forecast Full Year Segment Profit 148.2 1.8 150.0 (146.4) Excluding Inventory Valuation etc. 32.2 44.8 77.0 12.6 1. Cost • Positive : Promote cost reduc

23. Slide 23: Initiatives toward achieving the 7th mid-term plan

    JFE Steel Initiatives toward achieving the 7th mid-term plan from 2nd half of FY2022 ➢ In the second half of FY2022, segment profit excluding Inventory Valuation etc.(including Disappear impact of Chiba No.6 blast furnace refit) in the steel business is expected to be about 110 billion yen on an ann

24. Slide 24: JFE Engineering Financial Forecast for Fiscal Year 2022

    JFE Engineering Financial Forecast for Fiscal Year 2022 24 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved.

25. Slide 25: Financial Forecast for Fiscal Year 2022

    JFE Engineering Financial Forecast for Fiscal Year 2022 Current Business Environment/Overview of Financial Status ➢ Orders remain strong, but losses from European construction projects have been significant. ➢ Full-year segment profit is expected to fall to ¥13.0bn. (decrease by ¥7.0bn. from previou

26. Slide 26: JFE Shoji Financial Forecast for Fiscal Year 2022

    JFE Shoji Financial Forecast for Fiscal Year 2022 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 26

27. Slide 27: Financial Forecast for Fiscal Year 2022

    JFE-Shoji Financial Forecast for Fiscal Year 2022 Current Business Environment/Overview of Financial Status ➢ Full-year segment profit is expected to be ¥60bn. (As the previous forecast is, increased by ¥4.1bn. year-on-year) Financial Forecast Change FY2022 Forecast FY2021 FY2022 Forecast FY2021 Act

28. Slide 28: Topics

    Topics Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 28

29. Slide 29: Consideration of expand manufacturing facilities for non-oriented electrical steel sheet

    JFE Steel Consideration of expand manufacturing facilities for non-oriented electrical steel sheet ➢ As the electrification of automobiles accelerates with the strengthening of environmental regulations worldwide, the demand for high-grade non-oriented electrical steel sheet(N/O) for the main engine

30. Slide 30: Consideration of expand manufacturing facilities for non-oriented electrical steel sheet

    JFE Steel Consideration of expand manufacturing facilities for non- oriented electrical steel sheet ➢ We are considering further capacity expansion of non-oriented electrical steel sheet(N/O) in response to increased demand. (Plan; starting operation in fiscal 26, with top grade N/O for the main eng

31. Slide 31: DX Report

    JFE-HD DX Report ➢ We have published 「DX report 2022」 to describe JFE’s initiatives for DX. Visit our company website. *English version is coming soon. ＜URL：https://www.jfe-holdings.co.jp/investor/library/dxreport/index.html＞ Table of Contents 1. JFE’s DX Strategy Direction ～Providing new added valu

32. Slide 32: Appendix(1) Profit/Loss Analysis

    Appendix(1) Profit/Loss Analysis Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 32

33. Slide 33: Main Financial Data

    JFE-HD Main Financial Data J-GAAP IFRS FY14 FY15 FY16 FY17 FY18 FY18 FY19 FY20 FY21 ’22 Forecast (bn. Yen, times) (bn. Yen, times) Ordinary Income 231.0 64.2 84.7 216.3 221.1 Business profit 232.0 37.8 -12.9 416.4 235.0 EBITDA 421.5 254.4 279.9 388.8 405.9 EBITDA ＊1 428.2 269.4 223.4 668.7 505.0 ROS

34. Slide 34: Main Financial Data and Performance & Profitability Targets

    JFE-HD Main Financial Data and Performance & Profitability Targets 7 th mid-term FY2020 FY2021 FY2022 business plan FY2024 Actual Actual Forecast Business profit ¥320.0 billion ¥-12.9 billion ¥416.4 billion ¥235.0 billion Profit attributable to Consolidated owners of the parent ¥220.0 billion ¥-21.8

35. Slide 35: Progress of Cash Flow Improvements, Debt/EBITDA Ratio

    JFE-HD Progress of Cash Flow Improvements, Debt/EBITDA Ratio ➢ At the end of FY2022, the Debt/EBITDA ratio is expected to be x3.9. FY2022 （billion yen） Consolidated Cash Flow Forecast Progress of Debt/EBITDA Ratio Cash-in Cash-out (billion yen) Debt/EBITDA Ratio 16,000 (Right Axis) 9.0 Net Profit CA

36. Slide 36: Financial Results for Third Quarter of Fiscal Year 2022

    JFE Steel Financial Results for Third Quarter of Fiscal Year 2022 FY2021 FY2022 Unit Full 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q billion Revenue yen 638.5 771.9 832.8 930.2 3,173.4 932.6 986.3 986.9 Segment billion 69.7 88.8 93.5 71.7 323.7 93.0 55.2 21.8 Profit yen Excluding billion Inventory yen 25.7 42.8 (3.5

37. Slide 37: 33.4Bn. Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 33.4Bn. Yen Decrease in JFE Steel’s Segment Profit (FY2022.2Q (Actual) vs. FY2022.3Q (Actual)) （billion yen） FY2022 JFE Steel Full Change 1Q 2Q 3Q 4Q Year Actual Actual Actual Forecast Forecast Segment Profit 93.0 55.2 21.8 (20.0) 150.0 (33.4) Excluding Inventory Valuation etc. (23.0) 55.2

38. Slide 38: 41.8Bn. Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 41.8Bn. Yen Decrease in JFE Steel’s Segment Profit (FY2022.3Q (Actual) vs. FY2022.4Q (Forecast)) （billion yen） FY2022 JFE Steel Full Change 1Q 2Q 3Q 4Q Year Actual Actual Actual Forecast Forecast Segment Profit 93.0 55.2 21.8 (20.0) 150.0 (41.8) Excluding Inventory Valuation etc. (23.0) 55

39. Slide 39: Impact of the depreciation of the yen (Steel Business)

    JFE Steel Impact of the depreciation of the yen(Steel Business) ➢ Currently, the yen is trending toward appreciation, but compared to the past, the yen is still at a weaker level. ➢ The impact of foreign exchange effects on trade in FY2022 is expected to decrease by ¥91bn. (improve by ¥14bn. from pr

40. Slide 40: Shifting Focus from Quantity to Quality

    JFE Steel Shifting Focus from Quantity to Quality （Progress of Structural Reform and Major CAPEX） ➢ Steadily implementing structural reforms and capital investment to shift from quantity to quality. ✓ August 2022: Shutdown of Tin Mills in Chiba was completed, and production of steel sheet for cans w

41. Slide 41: Grain-Oriented Electrical-Steel-Sheet, Trading Business

    JFE-HD Grain-Oriented Electrical-Steel-Sheet, Trading Business Steel Business Trading Business Overseas To conduct FS of grain-oriented Establish No.1 global distribution and electrical-steel-sheet JV with JSW processing system of electrical steel in India sheet market JFE Steel signed a memorandum

42. Slide 42: Appendix(2) Business Environmental Indicators, etc.

    Appendix(2) Business Environmental Indicators, etc. Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 42

43. Slide 43: Domestic Market Environment: 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 Change From From Dec,2022 Nov,2022 Dec,2021 previous previous 1,000 month year 1 Inventories -75 -335 4

44. Slide 44: Domestic Inventories of Plate and Wide Flange Shapes

    JFE Steel Domestic Inventories of Plate (Plate Shear) Market Environment and Wide Flange Shapes Inventories of Plate (Plate Shear) Inventories of Wide Flange Shapes （000ｔ） （month）（000ｔ） Inventories （month） 500 3.5 250 3.5 Shipment Inventories Inventory Ratio(Right axis) Inventory Ratio(Right axis) 4

45. Slide 45: 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 Change Unit: 000t From From Dec,2022 Nov,2022 Dec,2021 100 Previous Previous Month Year ＋7 ＋12 Import Steel 375 368 363 (+1.9%) (+3.3%) 0 Jan Mar May Jul Sep Nov Jan Ma

46. Slide 46: Price Trend of Import Steel

    JFE Steel Domestic Market Environment Price Trend of Import Steel （000 yen/ｔ） 120 110 100 90 80 70 60 50 40 Mar Mar Mar Mar Mar Mar Mar May May May May May May May Jan Jan Jul Nov Jan Jul Nov Jan Jul Nov Jan Jul Nov Jan Jul Nov Jul Nov Jan Jul Nov Sep Sep Sep Sep Sep Sep Sep 2016 2017 2018 2019 2020

47. Slide 47: Crude Steel & Im/Export, China

    JFE Steel Overseas Market Environment Crude Steel & Im/Export, China （Mｔ） Export（Left axis） Import（Left axis） Crude steel（Right axis） （Mｔ） 9 120 8 100 7 6 80 5 60 4 3 Dec,2022 From Apr-Dec, From 40 Previous 2022 Apr-dec, 2 month 2021 Crude Steel（Mt） 77.9 +4.5% 764.6 +0.3% 20 1 Export（Mt） 5.4 -3.4% 5

48. Slide 48: 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% Change From From 5.0 Jan,2023 Dec,2022 Jan,2022 Previous Previous -250.0% month Year +4.5 +2.2 In

49. Slide 49: 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 100 100 Spread 0 0 Metal Spread ＝ HRC Price － Raw Materials Cost *HRC Price： Chinese Spot basis Raw Materials Cost： Calculated

50. Slide 50: Raw Materials Trend of Sub Material's Market Price

    (￠/lb) 60 110 160 210 260 1,000 1,400 2,200 2,600 1,800 600 2016.1 2016.1 2016.7 2016.7 FeCr (US$/t)FeMn 2017.1 2017.1 2017.7 2017.7 2018.1 2018.1 2018.7 2018.7 2019.1 2019.1 2019.7 2019.7 2020.1 2020.1 2020.7 2020.7 2021.1 2021.1 2021.7 2021.7 2022.01 2022.01 2022.07 2022.07 2023.01 2023.01 (US$/t)

51. Slide 51: Raw Materials 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

52. Slide 52: Progress of Initiatives of Steel Business

    JFE Steel Progress of Initiatives of Steel Business （Structural Reforms and Strategic Investment in Japan） Facilities ～FY19 FY20 FY21 FY22 FY23～ Upstream Facilities To be shut down (~Sep. 2023) Structural Keihin Reforms Hot rolling Facilities To be shut down District (~Sep. 2023) Cold-rolling & Hot-

53. Slide 53: Orders by Business Area

    JFE Engineering Orders by Business Area （billion yen） Business FY2021 FY2022 Main orders received in FY2022 Change Area ★・・・New projects received in 3Q of FY2022 Actual Forecast Construction works of domestic waste treatment plant [Okayama] Waste Renewal construction of domestic waste treatment plan

54. Slide 54: Links to the reports published during FY2022

    JFE-HD Links to the reports published during FY2022 Report URL QR code JFE Group REPORT https://www.jfe- 2022 holdings.co.jp/en/investor/library/gro up-report/index.html JFE Group CSR https://www.jfe- REPORT 2022 holdings.co.jp/en/csr/data/index.html JFE Group CSR https://www.jfe- REPORT 2022 holdin

55. Slide 55: Appendix(3) The 7th Medium-Term Business Plan

    Appendix(3) The 7th Medium-Term Business Plan 55

56. Slide 56: 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

57. Slide 57: JFE Group Environmental Vision for 2050

    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

58. Slide 58: 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

59. Slide 59: JFE Group's activities for Carbon Neutrality

    JFE-HD JFE Group’s activities for Carbon neautrality 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

60. Slide 60: [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

61. Slide 61: 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

62. Slide 62: 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

63. Slide 63: 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

64. Slide 64: Social sustainability: Contribution to Regional Societies through Engineering Business

    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

65. Slide 65: 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

66. Slide 66: 7th mid-term business plan <Steel Business> Main initiatives

    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

67. Slide 67: Transition to a lean, robust business structure by shifting focus from quantity to quality

    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

68. Slide 68: 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

69. Slide 69: 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

70. Slide 70: JFE Group-wide Strategy to Capture Growing Demand 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

71. Slide 71: 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.

72. Slide 72: 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

73. Slide 73: 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

74. Slide 74: 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

75. Slide 75: 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

76. Slide 76: 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

77. Slide 77: 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

78. Slide 78: Appendix(4) JFE Steel Carbon Neutral Strategy Briefing

    Appendix(4) JFE Steel Carbon Neutral Strategy Briefing 78

79. Slide 79: JFE Steel's Transition to Low-carbon Processes

    JFE Steel’s Transition to Low-carbon Processes Develop ultra-innovative technologies for carbon neutrality Establish & implement ultra- innovative technologies 2050 2024 (GI Use of funds) Transition Period 2030 Innovation Period 18% less Use EAFs 30% or more Carbon Adopt optimal processes CO2 Expand

80. Slide 80: JFE Steel's 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 More energy-saving equipment CO2 CCS Increased use of scrap Carbon-free (external conditions) electricity Introduce EAFs (external conditions) CCS Energy savi

81. Slide 81: 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 Innovati

82. Slide 82: Transition to Low-carbon Processes

    Transition to Low-carbon Processes ▶︎ Continue to develop ultra-innovative technologies for decarbonized steel processes by 2030 ▶︎ Increasingly use low-carbon technologies to cut CO2 by 30% or more by FY2030 Energy savings and Low-carbon feedstock & Low-carbon processes high efficiency fuel Upgrade

83. Slide 83: Development Project Supported by Green Innovation Fund

    Development Project Supported by Green Innovation Fund ▶︎ This project, targeted at using hydrogen in ironmaking and commissioned and subsidized by NEDO*, was selected in December 2021 to receive support from the Green Innovation Fund. ▶︎ The fund is helping to accelerate the development of technolo

84. Slide 84: 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 Develop technologies & conduct Medium-scale Large/full-scale small-scale tests tests tests ★ Stage Gate 2021～2025 202

85. Slide 85: 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 poli

86. Slide 86: Initiatives for Collaborating with Society

    Initiatives for Collaborating with Society • Realizing carbon-neutral steelmaking is a top priority for JFE Steel, but generating environmental value will involve large cost increases, so there are limits on what a single company can do. • Mechanisms are needed so that society, as the beneficiary of

87. Slide 87: Copyright notice

    Copyright © 2022 JFE Holdings, Inc. All Rights Reserved 本資料の無断複製・転載・webサイトへのアップロード等はおやめ下さい 87

JFE Holdings — Q3 FY2022 Earnings Presentation on 6ix