Jfe Holdings, Inc. · TSE:5411

Jfe — FY2017 Earnings Presentation

42 slides from Jfe's earnings presentation, Apr 26, 2018

  1. Slide 1: Financial Results in Fiscal Year 2017 ended March 31, 2018

    JFE Group Financial Results in Fiscal Year 2017 ended March 31, 2018 JFE Holdings, Inc. April 26, 2018 1

  2. Slide 2: Table of Contents

    A Table of Contents 1. JFE Holdings’ Financial Results in Fiscal Year 2017 ended March 31, 2018 2. JFE Holdings’ Financial Forecasts for Fiscal Year 2018 ending March 31, 2019 This presentation material is for information and discussion purpose only. Any statements in the presentation which are not

  3. Slide 3: Consolidated Financial Results in Fiscal Year 2017

    1. Consolidated Financial Results in Fiscal Year 2017 (April 1, 2017 to March 31, 2018) 33

  4. Slide 4: Financial Results in Fiscal Year 2017

    JFE-HD Financial Results in Fiscal Year 2017 FY2016 FY2017 Change FY2017 Change Full Year Full Year Forecast (billion yen) Apr-Dec Jan-Mar (B-A) (B-C) (A) (B) (C) Net Sales（a）） 3,308.9 2,670.8 1,007.8 3,678.6 369.7 3,670.0 8.6 Steel Business 40.5 150.2 48.6 198.8 158.3 185.0 13.8 Engineering Busines

  5. Slide 5: Adjustments of Ordinary Income of Financial Results in Fiscal Year 2017

    JFE-HD Adjustments of Ordinary Income of Financial Results in Fiscal Year 2017 JFE-HD recorded equity method investment loss of 10.6 billion yen through third quarter of fiscal year 2017 mainly due to the delay in construction work and cost increases etc. of Japan Marine United Corporation (JMU), JF

  6. Slide 6: Extraordinary income (losses)

    JFE-HD Financial Results in Fiscal Year 2017 Extraordinary income (losses) FY2017 FY2016 Apr-Dec Jan-Mar Gain on sales of 30.1 29.2 0.1 29.3 investment securities Extraordinary income 30.1 29.2 0.1 29.3 Impairment loss (9.4) (3.2) (25.2) (28.4) Expenses for treatment - (3.8) - (3.8) of PCB waste Ext

  7. Slide 7: JFE Steel Financial Results in Fiscal Year 2017

    JFE Steel Financial Results in Fiscal Year 2017 77

  8. Slide 8: Financial Results in Fiscal Year 2017 of JFE Steel

    JFE Steel Financial Results in Fiscal Year 2017 of JFE Steel FY2016 FY2017 FY2017 Change 2H Forecast 1H （A） 3Q 4Q (B) (B-A) （C) Billion Net Sales yen 2,349.1 1,294.7 697.2 723.5 2,715.4 366.3 2,730.0 Billion Ordinary Income yen 40.5 84.6 65.6 48.6 198.8 158.3 185.0 [ROS] [%] [1.7%] [6.5%] [9.4%] [6.

  9. Slide 9: 13.8 Billion Yen Increase in JFE Steel's Ordinary Income

    JFE Steel 13.8 Billion Yen Increase in JFE Steel’s Ordinary Income （FY17（Forecast） vs. FY17（Actual）） (billion yen） FY2016 FY2017 FY2017(Actual) Change Change FY2016 Forecast JFE Steel Actual Forecast 1H 2H Full Year →FY2017 →Actual A B C C-A C-B Ordinary 40.5 185.0 84.6 114.2 198.8 158.3 13.8 Income

  10. Slide 10: 158.3 Billion Yen Increase in JFE Steel's Ordinary Income

    JFE Steel 158.3 Billion Yen Increase in JFE Steel’s Ordinary Income (FY16 (Actual) vs. FY17 (Actual)) (billion yen） FY2016 FY2017 FY2017(Actual) Change Change FY2016 Forecast JFE Steel Actual Forecast 1H 2H Full Year →FY2017 →Actual A B C C-A C-B Ordinary 40.5 185.0 84.6 114.2 198.8 158.3 13.8 Incom

  11. Slide 11: JFE Engineering Financial Results in Fiscal Year 2017

    JFE Engineering Financial Results in Fiscal Year 2017 11 11

  12. Slide 12: Financial Results in FY2017 of JFE Engineering

    JFE Engineering Financial Results in FY2017 of JFE Engineering (billion yen） FY2016 FY2017 FY2017 Change Change (Actual) (Forecast) (Actual) A B C (C-A) (C-B) Orders 424.4 500.0 495.5 71.1 (4.5) Net Sales 426.1 400.0 391.3 (34.8) (8.7) Ordinary Income 26.6 19.0 19.3 (7.3) 0.3 【Change: FY2016 Actual

  13. Slide 13: JFE Shoji Trade Financial Results in Fiscal Year 2017

    JFE Shoji Trade Financial Results in Fiscal Year 2017 13 13

  14. Slide 14: Financial Results in FY2017 of JFE Shoji

    JFE Shoji Trade Financial Results in FY2017 of JFE Shoji (billion yen） FY2016 FY2017 FY2017 Change Change (Actual) (Forecast) (Actual) A B C (C-A) (C-B) Net Sales 1,671.0 1,900.0 1,907.9 236.9 7.9 Ordinary Income 21.8 32.0 33.0 11.2 1.0 【Ordinary Income Change : FY2016 Actual to FY2017 Actual】 Incre

  15. Slide 15: Dividends

    Dividends 15 15

  16. Slide 16: Dividends

    JFE-HD Dividends JFE Holdings will propose at its forthcoming General Meeting of Shareholders a payment of 30 yen per share for the year-end dividend to return some profit to shareholders. That will result in a dividend for the year totaling 80 yen per share. 16

  17. Slide 17: Consolidated Financial Forecasts for Fiscal Year 2018

    2. Consolidated Financial Forecasts for Fiscal Year 2018 (April 1, 2018 to March 31, 2019) 17 17

  18. Slide 18: Current Business Environment

    Current Business Environment Steel demand：demand to remain solid both domestic and overseas Construction：increase in urban redevelopment projects and projects related to the Tokyo Olympic and Paralympic Games Manufacturing：remain brisk mainly in the automotive and industrial machinery sectors Overse

  19. Slide 19: Consolidated Financial Forecasts for Fiscal Year 2018 ①

    JFE-HD Consolidated Financial Forecasts for Fiscal Year 2018 ① Ordinary income of 220.0 billion yen is forecast in fiscal 2018, similar to the result in fiscal 2017 （billion yen） FY2017 FY2018 Change Actual Forecast Steel business 198.8 160.0 （40.0) Engineering business 19.3 25.0 Trading business 33

  20. Slide 20: Consolidated Financial Forecasts for Fiscal Year 2018 ②

    JFE-HD Consolidated Financial Forecasts for Fiscal Year 2018 ② ＜Breakdown of changes in ordinary income in Steel business＞ （billion yen） Sales volume, sales prices and raw materials ＋40 Cost reductions +20 Metals, materials and others －50 The cost of strengthening manufacturing capabilities ー30 Inve

  21. Slide 21: Appendix

    Appendix 21 21

  22. Slide 22: Main Financial Data

    JFE-HD Main Financial Data FY03 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (bn. Yen, times) Ordinary Income 218.3 502.9 400.5 69.2 165.8 52.9 52.2 173.6 231.0 64.2 84.7 216.3 EBITDA ※1 432.3 741.4 670.8 337.1 428.9 306.3 260.6 368.9 421.5 254.4 279.9 388.8 ROS ※2 8.8％ 14.2％ 10.2％ 2.4％ 5.

  23. Slide 23: Trend of financial indices ①

    JFE-HD Trend of financial indices ① JFE Holdings (ROE) JFE Steel (ROS) More than 10% 10% 10% 7.6% 10% 7.3% 3.7% 1.8% 1.1% 1.7% 0% 0% FY2015 FY2016 FY2017 FY2017 FY2015 FY2016 FY2017 FY2017 (Target) (Target) JFE Engineering (Ordinary Income) JFE Shoji Trade (Ordinary Income) (billion yen) (billion ye

  24. Slide 24: Trend of financial indices ②

    JFE-HD Trend of financial indices ② D/E Ratio Debt / EBITDA Ratio (right axis) (right axis) (billion yen) 60% 60% (billion yen) (times) 800 6.0 5.4 56.9% 58.2% 4.9 50% 50% 51.4% 1,400 3.4 1,379.3 1,375.4 40% 400 388.8 3.0 279.9 254.4 1,330.9 30% Debt Outstanding EBITDA (left axis) (left axis) 1,300

  25. Slide 25: Cash Flow Results of FY2017

    JFE-HD Cash Flow Results of FY2017 (billion yen) Source Usage Net Income Dividends 144.6 34.5 Working Capital etc. 34.7 Capex, Investments 258.0 Depreciation 159.5 Asset Sales 67.6 Repayment of Debt 44.5 371.7 371.7 25

  26. Slide 26: 17.0 Billion Yen Decrease in JFE Steel's Ordinary Income (3Q vs 4Q)

    JFE Steel 17.０ Billion Yen Decrease in JFE Steel’s Ordinary Income (FY17 3Q (Actual) vs. FY17 4Q (Actual) (billion yen) JFE Steel 1H 2H FY2017 Change 3Q 4Q 3Q→4Q Oct-Dec Jan-Mar Ordinary 84.6 65.6 48.6 114.2 198.8 (17.0) Income Cost reductions ＋ 4.0 Volume and Mix － 4.0 Sales and Raw materials － 14.

  27. Slide 27: 29.6 Billion Yen Increase in JFE Steel's Ordinary Income (1H vs 2H)

    JFE Steel 29.6 Billion Yen increase in JFE Steel’s Ordinary Income (FY17 1H (Actual) vs. FY17 2H (Actual)) (billion yen) JFE Steel 1H 2H FY2017 Change 3Q 4Q 1H→2H Oct-Dec Jan-Mar Ordinary 84.6 65.6 48.6 114.2 198.8 29.6 Income Cost reductions ＋ 10.0 Volume and Mix + 5.0 ・Increase in materials cost i

  28. Slide 28: Classification of Placed Orders

    JFE Engineering Classification of Placed Orders （billion yen） FY2016 FY2017 Category Change Main Orders (FY2017) (Actual) (Actual) - Improvement works of the waste incineration plants (5 places) - Construction of the waste to energy plants in Meguro-Ward etc. (2 places) - Construction of the waste t

  29. Slide 29: Net Sales of JFE Shoji (by Segment)

    JFE Shoji Trade Net Sales of JFE Shoji (by Segment) (billion yen) FY2016 (A) FY2017 (A) Change Domestic Business 880.5 966.9 86.4 Export 383.4 461.7 78.3 Overseas 638.3 779.3 141.0 Business Foreign 254.9 317.6 62.7 Operation Raw Materials, Equipment etc. 152.2 161.7 9.5 TOTAL 1,671.0 1,907.9 236.9 2

  30. Slide 30: 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 Maker Whole Saler 4 Coil Center Inventory Ratio (Right) 4,500 4,000 3 3,500 3,000 2,500 2 2,000 1,500 1 1,000 Feb, 2018 500 4,125kt 0 0 Apr Apr Apr Apr Apr Aug Aug Aug Aug Aug Oct Oct Oct

  31. Slide 31: 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) (Month Inventories 450 Inventories Inventory Ratio 3.0 250 4 Shipment Inventory Ratio (Right) 3.5 2.5 200 400 3 2

  32. Slide 32: Trend of Import Steel (Ordinary Steel)

    0 100 200 300 400 500 600 Jan Feb Mar Apr May （000t） Jun 2013 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Domestic May Jun 2014 Jul Aug Market Environment Sep Oct S. Korea Nov Dec Jan Feb Mar Apr China May Jun 2015 Jul Aug Sep Oct Nov Taiwan Dec Jan Feb Mar Apr May Others (Ordinary Steel) Jun 2016 Jul A

  33. Slide 33: Price Trend of Import Steel

    40 45 50 55 60 65 70 Jan Feb Mar Apr (000 yen/ton) May Jun Jul 2013 Aug Sep Oct Nov Dec Jan Feb Mar Domestic Apr May Jun Import Steel from S. Korea Jul 2014 Market Environment Aug Data: Japanese Steel Association Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2015 Aug Sep Oct Nov Dec Jan Feb Mar Apr Ma

  34. Slide 34: Crude Steel & Im/Export, China

    JFE Steel Overseas Market Environment Crude Steel & Im/Export, China (Mt) Export(Left) Import(Left) Crude Steel (Right) (Mt) 12 80 10 70 60 8 50 6 40 4 30 20 2 10 0 0 Mar Apr Mar Apr Mar Apr Mar Apr Mar Apr Mar May May May May May Aug Aug Aug Aug Aug Jun Jun Jun Jun Jun Jul Jul Jul Jul Jul Dec Dec D

  35. Slide 35: Inventories in China by Products

    JFE Steel Overseas Market Environment Inventories in China by Products （000t） 35,000 100% Bar Rot & Wire Plate HR CR Change by previous year(%) 30,000 50% 25,000 0% 20,000 -50% 15,000 -100% 10,000 -150% 5,000 -200% 0 -250% May May May May May Aug Aug Aug Aug Aug Mar Mar Mar Mar Mar Jun Jun Jun Jun J

  36. Slide 36: Exports from China by Products

    0 2,000 4,000 6,000 8,000 10,000 12,000 Jan (000t) Feb Mar Apr May Jun 2013 Jul Aug Sep Oct Nov CGL Dec Jan Overseas Feb Mar Apr May Jun Market Environment 2014 Jul CRC Aug Sep Oct Nov Dec Jan Feb HRC Mar Apr May Jun 2015 Jul Aug Sep Oct Nov Dec Jan Feb Mar HRC (All oy) Apr May Jun 2016 Jul Aug Sep

  37. Slide 37: Metal Spread Trend (Chinese Spot Basis)

    JFE Steel Overseas Metal Spread Trend Market Environment (Chinese Spot Basis) 70 0 70 0 ($/t) ($/t) 60 0 60 0 HRC 50 0 50 0 40 0 40 0 30 0 30 0 20 0 20 0 10 0 10 0 Metal Spread 0 0 Jul-1 2 Jul-1 3 Jul-1 4 Jul-1 5 Jul-1 6 Jul-1 7 Jan -1 2 Oct -1 2 Jan -1 3 Oct -1 3 Jan -1 4 Oct -1 4 Jan -1 5 Oct -1 5

  38. Slide 38: Raw Materials Price

    JFE Steel Raw Materials Raw Materials Price （$/DMT） Iron ore (iron ore fines from Australia) （$/WMT） Coking Coal （Hard Coking Coal from Australia) $100 $400 鉄鉱石 ＦＯＢ 豪州強粘炭FOB 鉄鉱石 ターム契約FOB 豪州強粘炭 ターム契約FOB $90 $350 $80 $300 $70 $250 $200 $60 $150 $50 $100 $40 $50 $30 Hard Coaking Coal Term-contract FOB

  39. Slide 39: Raw Materials Trend of Metals' Market Price

    400 600 800 1,000 1,200 1,400 1,600 60.0 80.0 100.0 120.0 140.0 160.0 180.0 2013.1 2013.1 2013.7 2013.7 （￠/lb） FeCr （U$/t） FeMn 2014.1 2014.1 2014.7 2014.7 2015.1 2015.1 2015.7 2015.7 2016.1 2016.1 2016.7 2016.7 2017.1 2017.1 2017.7 2017.7 2018.1 2018.1 10.00 12.00 14.00 16.00 2.00 4.00 6.00 8.00 80

  40. Slide 40: Raw Materials Trend of Market Price

    10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 0 100,000 120,000 20,000 40,000 60,000 80,000 (yen/t） 2010.4 2010.4 2010.10 2010.10 2011.4 2011.4 Scrap 2011.10 2011.10 2012.4 (yen/t）LNG Price 2012.4 2012.10 2012.10 2013.4 2013.4 2013.10 2013.10 2014.4 2014.4 2014.10 2014.10 2015.4 2015.4 201

  41. Slide 41: Trend of exchange rate (against USD, KRW)

    Trend of exchange rate（against USD,KRW） JPY/USD JPY/KRW 130 0.14 0.13 120 JPY/USD 0.12 (left axis) 110 0.11 100 0.10 JPY/KRW (right axis) 0.09 90 0.08 80 0.07 70 0.06 May-14 Jan-11 Jan-15 Jan-18 Oct-13 Oct-16 Jul-12 Jul-16 Jun-13 Sep-14 Jun-17 Sep-17 Mar-12 Mar-16 Feb-13 Feb-14 Feb-17 Dec-15 Apr-11

  42. Slide 42: Copyright © 2018 JFE Holdings, Inc. All Rights Reserved

    Copyright © 2018 JFE Holdings, Inc. All Rights Reserved 42

JFE Holdings — FY2017 Earnings Presentation on 6ix