Jfe Holdings, Inc. · TSE:5411
Jfe — Q1 FY2021 Earnings Presentation
52 slides from Jfe's earnings presentation, Aug 12, 2021
Slide 1: JFE Group Financial Results for First Quarter of Fiscal Year 2021
Securities Code：5411.T JFE Group Financial Results for First Quarter of Fiscal Year 2021 ending March 31, 2022 JFE Holdings, Inc. August 12, 2021
Slide 2: A table of contents
A table of contents JFE Holdings’ Financial Results for First Quarter of Fiscal Year 2021 (April 1 to June 30, 2021) JFE Holdings’ Financial Forecasts for Fiscal Year 2021 (April 1, 2021, to March 31, 2022) Dividends Financial Results for First Quarter of Fiscal Year 2021 and Financial Forec
Slide 3: Consolidated Results for First Quarter of Fiscal Year 2021
Consolidated Results for First Quarter of Fiscal Year 2021 (April 1 to June 30, 2021) 3
Slide 4: Financial Results for First Quarter of Fiscal Year 2021
JFE-HD Financial Results for First Quarter of Fiscal Year 2021 • Global economy has continued to recover since 2H of FY2020. • Strong demand for steel and market prices amid the improved global economic trends led to a significant increase in profit, particularly in the steel business. FY2020 FY2021
Slide 5: Financial Results for First Quarter of Fiscal Year 2021 (by Segment)
JFE-HD Financial Results for First Quarter of Fiscal Year 2021 (by Segment) FY2020 FY2021 (billion yen) Change 1Q (Apr-Jun) 1Q (Apr-Jun) Revenue Steel Business 508.7 638.5 129.8 Engineering Business 105.0 103.0 (2.0) Trading Business 238.0 261.6 23.6 Adjustments (107.9) (114.2) (6.3) Total 743.9 888
Slide 6: Consolidated Financial Forecast for Fiscal Year 2021
Consolidated Financial Forecast for Fiscal Year 2021 (April 1, 2020 to March 31, 2022) 6
Slide 7: Financial Forecast for Fiscal Year 2021
JFE-HD Financial Forecast for Fiscal Year 2021 • Business profit in 1H is expected to get into a significant surplus of 195.0 billion yen mainly caused by demand recovery and market price increase in the steel business. • Full-year business profit is expected to be 350.0 billion yen, increased by 36
Slide 8: Financial Forecast for Fiscal Year 2021 (by Segment)
JFE-HD Financial Forecast for Fiscal Year 2021 (by Segment) FY2020 Actual FY2021 Forecast Change （billion yen） 1H Full Year 1H Full Year 1H Full Year Revenue Steel Business 1,027.2 2,255.2 1,450.0 3,130.0 422.8 874.8 Engineering Business 221.9 485.7 240.0 520.0 18.1 34.3 Trading Business 451.7 932.5
Slide 9: Financial Forecast for Fiscal Year 2021 vs. Previous Forecast
JFE-HD Financial Forecast for Fiscal Year 2021 vs. Previous Forecast Business profit is expected to be 350 billion yen, increased by 150 billion yen from the previous forecast. Previous Updated Change （billion yen） Forecast Forecast (B-A) (A) (B) Revenue 3,930 4,170 240 Business Profit 200 350 150 S
Slide 10: Debt/EBITDA Ratio
JFE-HD Debt/EBITDA Ratio Debt/EBITDA ratio in 1H of FY2021 (2.9x) is expected to be on par with the target of 7 th mid-term business plan. (billion yen) Calculated from (times) annualized EBITDA 700 forecast for 1H FY2021 9.0 600 8.1 8.0 500 630.0 7.0 （FY2021 1H×2） 400 6.0 Target of 7 th EBITDA (Lef
Slide 11: Dividends
Dividends 11
Slide 12: Interim dividend of 60 yen per share
JFE-HD Dividends JFE Holdings has decided to pay an interim dividend of 60 yen per share at its Board of Directors. A decision regarding the year-end dividend has been postponed while the company carefully monitors its ongoing performance. 12
Slide 13: JFE Steel Financial Results and Forecast
JFE Steel Financial Results for First Quarter of Fiscal Year 2021 and Financial Forecast for Fiscal Year 2021 13
Slide 14: Financial Results for First Quarter of Fiscal Year 2021
JFE Steel Financial Results for First Quarter of Fiscal Year 2021 Unit FY2020 FY2021 1Q 2Q 3Q 4Q Full Year 1Q Revenue billion yen 508.7 518.6 580.2 647.6 2,255.2 638.5 Segment Profit billion yen (57.8) (78.4) 34.3 36.4 (65.4) 69.7 Excluding Inventory Valuation etc.* billion yen (34.8) (33.4) 14.3 22
Slide 15: 127.5 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 127.5 Billion Yen Increase in JFE Steel’s Segment Profit (FY2020.1Q (Actual) vs. FY2021.1Q (Actual)) （billion yen） Change FY2020 FY2021 FY2020.1Q JFE Steel → 1Q 2Q 3Q 4Q Full Year 1Q FY2021.1Q Segment Profit (57.8) (78.4) 34.3 36.4 (65.4) 69.7 +127.5 1. Cost • Capital investment effect +15
Slide 16: Current Business Environment (Domestic)
JFE Steel Current Business Environment（Domestic） Steel demand is expected to continue to recover as demand mainly in the manufacturing industry remains solid. Ordinary steel orders in May 2021 increased by 35.5% year on year, showing a significant recovery trend. Domestic automobile production
Slide 17: Current Business Environment (Overseas)
JFE Steel Current Business Environment（Overseas） Steel demand in most regions is expected to continue to recover. However, it is essential to monitor the impact of re-spread of COVID19 in India and ASEAN. Steel supply and demand in the Southeast Asian market are expected to be stable because s
Slide 18: Assumptions for Financial Forecast
JFE Steel Assumptions for Financial Forecast Forecast of crude steel production • Standalone crude steel production in FY2021 is expected to be approximately 26.50 Mt. (1H: less than 13.00Mt. 2H: more than 13.50Mt. Full-year forecast of production volume is the same as the previous forecast.） Metal
Slide 19: Initiatives and Progress (1)
JFE Steel Initiatives and Progress (1) Initiatives to Improve our Sales Price • The following initiatives enable us to expand the understanding of our customers in each business field, and we steadily execute sales price improvement. • We will make further efforts to proceed with the price improveme
Slide 20: Initiatives and Progress (2)
JFE Steel Initiatives and Progress (2) Product-mix enhancement（Shifting focus from quantity to quality） By steadily proceed with the following initiatives referred in the 7 th mid-term business plan, we will increase the mix of highly value-added products and enhance our earning basis. Released on J
Slide 21: Assumptions for Financial Forecast (price of raw materials, steel price)
JFE Steel Assumptions for Financial Forecast （price of raw materials, steel price） ($/DMT) Iron ore（Iron Ore Fines from Australia） HRC price in Southeast Asia $225 （CFR $/t） Term- FY2020 FY2021 $1,000 $200 contract Oct-Dec Jan-Mar Apr-Jun Jul-Sep FOB $950 $175 $/DMT 102 115 155 171 $900 $150 $850 $1
Slide 22: Financial Forecast for Fiscal Year 2021
JFE Steel Financial Forecast for Fiscal Year 2021 FY2021 Updated Forecast FY2021 Unit FY2020 Full Year Full Year 1Q 2Q 1H Previous 2H Full year Forecast billion Revenue yen 2,255.2 638.5 811.5 1,450.0 1,680.0 3,130.0 billion Segment Profit yen (65.4) 69.7 90.3 160.0 120.0 280.0 140.0 Excluding Inven
Slide 23: 140.0 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 140.0 Billion Yen Increase in JFE Steel’s Segment Profit (FY2021 (Previous Forecast) vs. FY2021(Updated Forecast)) • Although the raw material prices are expected to remain at the current high level for a certain period, the steel prices are expected to increase due to improvement of the e
Slide 24: 345.4 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 345.4 Billion Yen Increase in JFE Steel’s Segment Profit (FY2020 (Actual) vs. FY2021 (Forecast)) • The steel demand is expected to recover significantly from FY2020, which was greatly affected by COVID-19. • Segment profit is expected to improve significantly from FY2020 due to the increas
Slide 25: 40.0 Billion Yen Decrease in JFE Steel's Segment Profit
JFE Steel 40.0 Billion Yen Decrease in JFE Steel’s Segment Profit (FY2021.1H vs. FY2021.2H) • Crude steel production is expected to increase in 2H and cost reductions are also expected to improve. • Raw materials and other material costs are expected to rise because the supply-demand balance will re
Slide 26: JFE Engineering Financial Forecast for Fiscal Year 2021
JFE Engineering Financial Forecast for Fiscal Year 2021 26
Slide 27: JFE Engineering Financial Forecast for Fiscal Year 2021
JFE Engineering Financial Forecast for Fiscal Year 2021 Current Business Environment/ Overview of Financial Status Domestic demand both in the environment & energy sector and infrastructure sector is expected to remain solid. Regarding the overseas market, demand in Europe is expected to remain
Slide 28: JFE Shoji Financial Forecast for Fiscal Year 2021
JFE Shoji Financial Forecast for Fiscal Year 2021 28
Slide 29: JFE Shoji Financial Forecast for Fiscal Year 2021
JFE Shoji Financial Forecast for Fiscal Year 2021 Current Business Environment/ Overview of Financial Status In 1H, segment profit is expected to significantly increase due to rapid rise in steel market price, in addition to the demand recovery from the impact of the spread of COVID-19 both in dome
Slide 30: Topics (ESG Initiatives etc.)
Topics (ESG Initiatives etc.) 30
Slide 31: Monopiles
JFE Engineering Commercialization of manufacturing foundation structures for offshore wind-power machines E S G • JFE Engineering has decided to invest in establishing a new plant for monopile foundation structure of offshore windmills. • Total capital investment is estimated around 40 billion yen,
Slide 32: Started Operation of Upstream Large-Scale Facilities in West Japan Works
JFE Steel Started Operation of Upstream Large-Scale Facilities in West Japan Works • JFE Steel started the operation of two upstream facilities in West Japan Works, which are for strengthening its domestic manufacturing. • A new continuous casting machine can provide a large amount of high-quality l
Slide 33: Included in the World's Leading ESG Investment Indices
JFE-HD Included in the World’s Leading ESG Investment Indices E S G Included in leading ESG investment indices, “FTSE4Good Index Series”* and “FTSE Blossom Japan Index”** for the second consecutive year Released on 8th July 2021 *FTSE4Good Index Series https://www.ftserussell.com/ja/products/indices
Slide 34: External Recognition regarding DX
JFE-HD External Recognition regarding DX JFE Group has been selected as “DX Stock 2021” for the 7 th consecutive year Released on June 8th, 2021 • JFE Group has been selected as a company which competitively promotes digital transformation strategies for 7 th consecutive year. • Competitive IT Strat
Slide 35: Appendix
Appendix 35
Slide 36: Main Financial Data
JFE-HD Main Financial Data J-GAAP IFRS (Forecast) 1H FY13 FY14 FY15 FY16 FY17 FY18 FY18 FY19 FY20 FY21 (bn. Yen, times) (bn. Yen, times) Ordinary Income 173.6 231.0 64.2 84.7 216.3 221.1 Business profit 232.0 37.8 -12.9 195.0 EBITDA 368.9 421.5 254.4 279.9 388.8 405.9 EBITDA ＊1 428.2 269.4 223.4 315
Slide 37: 20.6 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 20.6 Billion Yen Increase in JFE Steel’s Segment Profit (FY2021.1Q (Actual) vs. FY2021.2Q (Forecast)) FY2021 Forecast Change JFE Steel (billion yen) 1Q(Actual) 2Q(Forecast) 1H Segment Profit 69.7 90.3 160.0 +20.6 1. Cost ±0.0 2. Volume • Production increase because of concentration of and
Slide 38: 296.2 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 296.2 Billion Yen Increase in JFE Steel’s Segment Profit (FY2020.1H (Actual) vs. FY2021.1H (Forecast)) FY2020 FY2021 Change JFE Steel 1H(Actual) 1H(Forecast) (billion yen) Segment Profit (136.2) 160.0 +296.2 1. Cost • Capital investment effect etc. ＋15.0 2. Volume • Production increase ami
Slide 39: 89.2 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 89.2 Billion Yen Increase in JFE Steel’s Segment Profit (FY2020.2H (Actual) vs. FY2021.1H (Forecast)) FY2020 FY2021 Change JFE Steel 2H(Actual) 1H(Forecast) (billion yen) Segment Profit 70.8 160.0 +89.2 1. Cost ±0.0 2. Volume • Production increase amid recovery of steel demand and Mix (Cru
Slide 40: 33.3 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 33.3 Billion Yen Increase in JFE Steel’s Segment Profit (FY2020.4Q (Actual) vs. FY2021.1Q (Forecast)) FY2020 FY2021 Change JFE Steel 1Q (billion yen) 1Q 2Q 3Q 4Q Full Year Segment Profit (57.8) (78.4) 34.3 36.4 (65.4) 69.7 +33.3 1. Cost ±0.0 2. Volume • Decrease in shipment volume. and Mix
Slide 41: 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 Jun, 2021 May, 2021 Jun, 2020 previous previous 1,000 1 month year Inventories -24 -42
Slide 42: Inventories of Plate and Wide Flange Shapes
JFE Steel Domestic Inventories of Plate (Plate Shear) Market Environment and Wide Flange Shapes （000ｔ） Inventories of Plate (Plate Shear) （Month） （000ｔ） Inventories of Wide Flange Shapes （Month） 500 3.5 250 Inventories 3.5 Inventories Shipment Inventory Ratio(Right axis) Inventory Ratio(Right axis)
Slide 43: 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 Jun, From From May, Jun, Unit:000t 100 2021 Previous Previous 2021 2020 Month Year +9 +12 Import Steel 339 330 327 (+2.7%) (+3.5%) 0 Jan Mar May Dec Jan Mar May
Slide 44: Crude Steel & Im/Export, China
JFE Steel Overseas Market Environment Crude Steel & Im/Export, China （Mｔ） Export（Left axis） Inport（Left axis） Crude steel（Right axis） （Mｔ） 9 120 8 100 7 6 80 5 60 4 3 40 Jun From Jan-Jun, From 2 2021 previous 2021 Jan-Jun, month 2020 20 1 Crude Steel（Mt） 93.9 -5.6% 562.7 +11.6% Export（Mt） 6.5 +22.6%
Slide 45: 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 Jun, From From May, Jun, 5.0 2021 Previous Previous 2021 2020 Month Year -250.0% Inventori
Slide 46: Metal Spread Trend (Chinese Spot Basis)
JFE Steel Overseas Metal Spread Trend Market Environment (Chinese Spot Basis) （$/t) （$/t) 1,000 900 900 800 800 700 700 600 600 HRC 500 500 400 400 300 300 200 200 100 100 Metal Spread 0 0 Metal Spread ＝ HRC Price － Raw Materials Cost *HRC Price： Chinese Spot basis Raw Materials Cost： Calculated fro
Slide 47: Price Trend of Import Steel
JFE Steel Domestic Market Environment Price Trend of Import Steel （000 yen /ｔ） 70 65 60 55 50 45 40 Sep Jul Sep Sep Jan Mar May Nov Jul Jul Sep May Jan Mar May Nov May Nov Jul Sep Jan Mar Jan Mar May Nov Jul Jan Mar May Nov Jan Mar 2016 2017 2018 2019 2020 2021 Data: The Japan Iron and Steel Federat
Slide 48: Trend of Sub Material's Market Price
(￠/lb) 100 120 140 160 180 60 80 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2016.1 2016.1 2016.7 FeCr (US$/t)FeMn 2016.7 2017.1 2017.1 2017.7 2017.7 2018.1 2018.1 2018.7 2018.7 2019.1 2019.1 2019.7 2019.7 Raw Materials 2020.1 2020.1 2020.7 2020.7 2021.1 2021.1 2021.7 2021.7 (US$/t) 10.0 12.0 14
Slide 49: Trend of Sub Material's Market Price
JFE Steel Raw Materials Trend of Sub Material’s Market Price （yen/ｔ）Scrap ($/B) Spot Bulker 60,000 60,000 50,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 0 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 2016.1 2016.7 2017.1 2017.7 2018.1 2
Slide 50: Strategic Investments
JFE Steel Progress of Initiatives of Steel Business （Structural Reforms and Strategic Investment in Japan） Facilities ～FY19 FY20 FY21 FY22 FY23～ To be shut down Structural Reforms Upstream Facilities (~23.9) Keihin To be shut down Hot rolling Facilities District (~23.9) Cold-rolling & Hot-dip Shut d
Slide 51: Orders by Business Area
JFE Engineering Orders by Business Area （billion yen） Business FY2020 FY2021 Main orders received in FY2021 Change Area Actual Forecast ★: New projects received in FY2021 1Q Waste Improvement works of domestic waste treatment plant to 220.0 230.0 10.0[★Kochi prefecture] Resource ★Renewal constructio
Slide 52: Copyright © 2021 JFE Holdings, Inc.
Copyright © 2021 JFE Holdings, Inc. All Rights Reserved 52