Jfe Holdings, Inc. · TSE:5411
Jfe — Q1 FY2023 Earnings Presentation
88 slides from Jfe's earnings presentation, Aug 3, 2023
Slide 1: JFE Group Financial Results for First Quarter of Fiscal Year 2023
Securities Code︓5411.T JFE Group Financial Results for First Quarter of Fiscal Year 2023 ending March 31, 2024 JFE Holdings, Inc. August 3, 2023 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 1
Slide 2: A table of contents
A table of contents Financial Highlights JFE Holdings’ Financial Results for First Quarter of Fiscal Year 2023 (April 1 to June 30, 2023) and Financial Forecast for Fiscal Year 2023 (April 1, 2023, to March 31, 2024) Dividends Financial Forecast for Fiscal Year 2023 by Segment Progress of
Slide 3: Financial Highlights
JFE-HD Financial Highlights Results Business Profit ¥84.8bn. • Business profit decreased year-on-year due to negative inventory valuation differences due to a （decreased by ¥31.8bn. year-on-year) for 1Q of decline in main raw material prices. FY2023 [Excluding Inventory Valuation etc.] [¥75.8bn.] •
Slide 4: Consolidated Results for First Quarter of Fiscal Year 2023
Consolidated Results for First Quarter of Fiscal Year 2023 (April 1 to June 30, 2023) Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 4
Slide 5: Financial Results for 1Q of Fiscal Year 2023
JFE-HD Financial Results for 1Q of Fiscal Year 2023 Business profit in 1Q of FY2023 was ¥84.8bn. (decreased by ¥31.8bn. year-on-year) FY2022 FY2023 Actual Actual （billion yen） Change 1Q 1Q (Apr-Jun) (Apr-Jun) Revenue 1,253.6 1,262.0 8.4 Business Profit 116.6 84.8 (31.8) [Excluding Inventory Valuat
Slide 6: Financial Results for 1Q of Fiscal Year 2023 (by Segment)
JFE-HD Financial Results for 1Q of Fiscal Year 2023 (by Segment) FY2022 FY2023 Actual Actual （billion yen） Change Contents 1Q 1Q (Apr-Jun) (Apr-Jun) Steel Business 932.6 917.2 (15.4) Engineering Business 98.2 111.1 12.9 Trading Business 379.5 370.3 (9.2) Adjustments (156.8) (136.7) 20.1 Revenue 1,25
Slide 7: 24.9bn. Decrease in JFE Steel's Segment Profit
JFE Steel 24.9bn. Decrease in JFE Steel’s Segment Profit (FY2022.1Q (Actual) vs. FY2023.1Q (Actual)) （billion yen） FY2022 FY2023 Unit FY2022 FY2023 1Q 1Q JFE Steel 1Q 1Q Change Crude Steel (Standalone) Mt 6.43 6.05 Segment Shipment Profit 93.0 68.1 (24.9) (Standalone) Mt 5.54 5.23 Excluding Average
Slide 8: Financial Forecasts for Fiscal Year 2023
Financial Forecastsfor Fiscal Year 2023 (April 1, 2023, to March 31, 2024) Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 8
Slide 9: Financial Forecast for Fiscal Year 2023
JFE-HD Financial Forecast for Fiscal Year 2023 Full-year business profit is expected to be ¥290.0bn. (as previous forecast, increased by ¥54.2bn. year-on-year) Full-year profit attributable to owners of parent is expected to be ¥190.0bn. (as previous forecast, increased by ¥27.4bn. year-on-year)
Slide 10: Financial Forecast for Fiscal Year 2023 (by Segment)
JFE-HD Financial Forecast for Fiscal Year 2023 (by Segment) FY2023 Change Change FY2022 FY2023 Forecast FY2022 Previous （Previous) Forecast(Updated) Actual （billion yen） →FY2023 →Updated 1H Full year Full year 1H Full year Full year Full year Steel Business 1,918.9 3,881.1 4,000.0 1,880.0 3,770.0 (1
Slide 11: Dividend
JFE-HD Dividend JFE Holdings agreed to pay an interim dividend of 50 yen per share at its Board of Directors. The annual dividend for FY2023 is expected to be 100 yen per share, based on our payout ratio policy of approximately 30%. (As previous announced） Pay-out Ratio (yen/share) 160 31.9% 33.
Slide 12: JFE Steel: Financial Forecast for Fiscal Year 2023
JFE Steel Financial Forecast for Fiscal Year 2023 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 12
Slide 13: Business environment (Domestic)
JFE Steel Business environment（Domestic） Although the level of activity in the automotive sector is improving, demand continues to be postponed due to labor shortages and the impact of soaring materials prices, particularly in the civil engineering and construction sectors. Demand for steel prod
Slide 14: Business environment (Overseas)
JFE Steel Business environment（Overseas） Overall, steel demand is expected to recover moderately. While China has increased crude steel production, domestic demand has been weak, including a slump in the real estate industry, and the market recovery is slower than expected. The Chinese governm
Slide 15: Raw materials market trends
JFE Steel Raw materials market trends Key raw materials • Iron ore prices rose from late last year to early this year due to expectations of a recovery in steel demand following the easing of China's zero coronavirus policy, however, fell around March due to a slower recovery in the steel market.
Slide 16: Crude steel production
JFE Steel Crude steel production Although there is a recovery trend in some sectors (such as for domestic automobiles), the overall recovery has been slower than previous forecast, so standalone crude steel production is expected to be approx. 24.60Mt per year. （down 0.40Mt from the previous forec
Slide 17: Improving of sales price
JFE Steel Improving of sales price In 1H of FY2023, despite the impact of the decline in main raw material prices and overseas steel market, we continue the reflections of metal and commodity costs*, overhaul of extra pricing, and enhancing sales price , and are expected to maintain sales prices g
Slide 18: Financial Forecast for Fiscal Year 2023
JFE Steel Financial Forecast for Fiscal Year 2023 FY2022 FY2023(updated) FY2023 Unit Previous Full Full Forecast 1Q 2Q 1H 2H Year 1Q 2Q 1H 2H Year billion Revenue 932.6 986.3 1,918.9 1,962.2 3,881.1 917.2 970.8 1,888.0 1,882.0 3,770.0 4,000.0 yen Segment billion 93.0 55.2 148.2 (1.4) 146.8 68.1 18.9
Slide 19: 0.0bn. Increase in JFE Steel's Segment Profit
JFE Steel 0.0bn. Increase in JFE Steel’s Segment Profit (FY2023 (Previous Forecast) vs. FY2023(Updated Forecast)) （billion yen） FY2023 FY2023 Change JFE Steel Previous Forecast Updated Forecast Segment Profit 200.0 200.0 ０.0 Excluding Inventory Valuation etc. 190.0 225.0 35.0 1. Cost ±0.0 2. Volume
Slide 20: 53.2Bn. Increase in JFE Steel's Segment Profit
JFE Steel 53.2Bn. Increase in JFE Steel’s Segment Profit (FY2022 (Actual) vs. FY2023 (Forecast)) （billion yen） FY2022 FY2023 Change JFE Steel Actual Forecast Segment Profit 146.8 200.0 53.2 Excluding Inventory Valuation etc. 73.8 225.0 151.2 1. Cost • Structural reforms effect +20.0 • Operational im
Slide 21: 26.0Bn. Yen Increase in JFE Steel's Segment Profit
JFE Steel 26.0Bn. Yen Increase in JFE Steel’s Segment Profit (FY2023.1H vs. FY2023.2H) （billion yen） FY2023 Forecast Change JFE Steel 1H Forecast 2H Forecast Full Year Segment Profit 87.0 113.0 200.0 26.0 Excluding Inventory Valuation etc. 103.0 122.0 225.0 19.0 1. Cost • Structural reforms effect +
Slide 22: Profit in the steel business
JFE Steel Profit in the steel business While raw material prices are lower than the previous forecast, maintaining sales prices will improve profitability. In FY2023, profit per ton excluding inventory valuations etc. is expected to be 10,000yen/t.（increased by 1,000yen/t from previous forecast）
Slide 23: Paths toward achieving the Seventh Medium-Term Plan
JFE Steel Paths toward achieving the Seventh Medium-Term Plan In FY2023, segment profit excluding Inventory Valuation etc. in the steel business is expected to be 225 billion yen. In FY2024, due to steadily implementing various measures, including structural reforms, sales price improvements, an
Slide 24: JFE Engineering: Financial Forecast for Fiscal Year 2023
JFE Engineering Financial Forecast for Fiscal Year 2023 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 24
Slide 25: Financial Forecast for Fiscal Year 2023
JFE Engineering Financial Forecast for Fiscal Year 2023 Current Business Environment/Overview of Financial Status Expect to increase orders in the field of “Waste to Resource” and “Carbon neutral”. Due to the increase in sales by the progress of ordered projects and the impact of soaring price
Slide 26: JFE Shoji: Financial Forecast for Fiscal Year 2023
JFE Shoji Financial Forecast for Fiscal Year 2023 Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 26
Slide 27: Financial Forecast for Fiscal Year 2023
JFE Shoji Financial Forecast for Fiscal Year 2023 Current Business Environment/Overview of Financial Status Compared to the previous fiscal year, despite a recovery in automobile production, segment profit are expected to decline due to a delay in demand recovery from the initial expectations in
Slide 28: Progress of the 7th Medium-Term Business Plan
Progress of the 7th Medium-Term Business Plan (Main initiatives of Steel Business) Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 28
Slide 29: Progress of main initiatives of the 7th mid-term business plan
Progress of main initiatives of the 7th mid-term business plan (Steel Business) １. Shifting focus from quantity to quality ・Upstream facilities in Keihin will be suspended in September as planned. P30 (released on 3 rd Aug. 2023) ・Large and heavy steel plate for wind power generation has been select
Slide 30: Progress on Structural Reform
JFE Steel Progress on Structural Reform Shutdown of upstream facilities and hot rolling facilities in Keihin is scheduled for September 16, 2023. We are steadily implementing product transfers, building production systems, and dealing with employees and partner companies. Complete the structural
Slide 31: Progress in a land reuse project in Keihin District
Progress in a land reuse project in Keihin District Land reuse project in Keihin is making steady progress. (Decided to sell some land in Ogimachi and selected business partners in the northern part of Minamiwatarida-Kita area.) In June 2023, Kawasaki City announced the Ogishima Land Use Plan (d
Slide 32: Establish a joint venture company in India of grain-oriented electrical steel sheet with JSW
Establish a joint venture company in India of grain-oriented electrical steel sheet with JSW Released on 3 August 2023 rd Singed a joint venture agreement with JSW for the establishment of a joint venture company for Grain-Oriented (GO) electrical steel sheets in India. Company name: JSW JFE Electri
Slide 33: Green steel products have been selected
Green steel products “ “ have been selected Released on 20 June 2023 th JGreeXTM has been selected for four large cargo ships (dry bulk ships). About 14,000 tons of JGreeXTM are scheduled to be delivered. Collaborate with eight domestic shippers, we have created the world's first sustainable fra
Slide 34: Large and Heavy Steel Plate for wind power generation has been selected
Large and Heavy Steel Plate for wind power generation has been selected Released on 3rd August 2023 Large and heavy steel plate “J-TerraPlate™” for wind power generation produced with Kurashiki No. 7 continuous caster has been selected for the first time for the foundation structure (monopiles) of o
Slide 35: Appendix(1) Profit/Loss Analysis
Appendix(1) Profit/Loss Analysis Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 35
Slide 36: Debt/EBITDA Ratio
JFE-HD Debt/EBITDA Ratio Debt/EBITDA ratio in 1H of FY2023 is 3.5x. (times) 16,000 9.0 Debt/EBITDA Ratio Target of the 7 th 14,000 (Right Axis) 7.0 mid-term business plan 12,000 5.0 Approx. 3x 3.7 3.5 10,000 2.8 3.0 8,000 Calculated from 1.0 EBITDA annualized EBITDA 6,000 forecast for 1H FY2023 (1
Slide 37: Main Performance & Profitability Targets and Results
JFE-HD Main Performance & Profitability Targets and Results The 7th mid-term FY2021 FY2022 FY2023 business plan Actual Actual Forecast FY2024 Business Profit ¥320.0 ¥ 416.4Bn. ¥ 235.8bn. ¥290.0bn. Consolidated [Excluding Inventory Valuation etc.] bn. [¥2,224bn.] [¥162.8bn.] [¥315.0bn.] Profit attrib
Slide 38: Main Financial Data
JFE-HD Main Financial Data JAAP IFRS FY14 FY15 FY16 FY17 FY18 FY18 FY19 FY20 FY21 ’22 (bn. Yen, times) (bn. Yen, times) Ordinary Income 231.0 64.2 84.7 216.3 221.1 Business profit 232.0 37.8 -12.9 416.4 235.8 EBITDA 421.5 254.4 279.9 388.8 405.9 EBITDA ＊1 428.2 269.4 223.4 668.7 505.4 ROS 6.0% 1.9%
Slide 39: Financial Results for First Quarter of Fiscal Year 2023
JFE Steel Financial Results for First Quarter of Fiscal Year 2023 FY2021 FY2022 FY 2023 Unit Full Full 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 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 Segment billion 69.7 88.8 93.5 71.7 323.7 93.0 55.2 21.8 (23.2) 146.8
Slide 40: 91.3bn. Increase in JFE Steel's Segment Profit
JFE Steel 91.3bn. Increase in JFE Steel’s Segment Profit (FY2022.4Q (Actual) vs. FY2023.1Q (Actual)) （billion yen） FY2022 FY2023 Change JFE Steel 1Q 2Q 3Q 4Q Full year 1Q Segment Profit 93.0 55.2 21.8 (23.2) 146.8 68.1 91.3 Excluding Inventory (23.0) 55.2 22.8 18.8 73.8 59.1 40.3 Valuation etc. 1. C
Slide 41: 49.2bn. Decrease in JFE Steel's Segment Profit
JFE Steel 49.2bn. Decrease in JFE Steel’s Segment Profit (FY2023.1Q (Actual) vs. FY2023.2Q (Forecast)) （billion yen） FY2023 Forecast JFE Steel Change 1Q(Actual) 2Q(Forecast) 1H Segment Profit 68.1 18.9 87.0 (49.2) Excluding Inventory Valuation etc. 59.1 43.9 103.0 (15.2) 1. Cost ±0.0 2. Volume and M
Slide 42: 88.4bn. Increase in JFE Steel's Segment Profit
JFE Steel 88.4bn. Increase in JFE Steel’s Segment Profit (FY2022.2H (Actual) vs. FY2023.1H (Forecast)) FY2022 FY2023 Change JFE Steel 2H(Actual) 1H(Forecast) (billion yen) Segment Profit (1.4) 87.0 88.4 Excluding Inventory Valuation etc. 41.6 103.0 61.4 1. Cost • Disappearance of blast furnace refur
Slide 43: 61.2bn. Decrease in JFE Steel's Segment Profit
JFE Steel 61.2bn. Decrease in JFE Steel’s Segment Profit (FY2022.1H (Actual) vs. FY2023.1H (Forecast)) FY2022 FY2023 Change JFE Steel 1H(Actual) 1H(Forecast) (billion yen) Segment Profit 148.2 87.0 (61.2) Excluding Inventory Valuation etc. 32.2 103.0 70.8 1. Cost • Operational improvement ＋10.0 • Di
Slide 44: Appendix(2) Business Environmental Indicators, etc.
Appendix(2) Business Environmental Indicators, etc. Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 44
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 （kt） （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,2023 May,2023 Jun,2022 previous previous 1,000 1 month year Inventories 4,007 -33 -5
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 Plate (Plate Shear) Inventories of Wide Flange Shapes （kt） （month） （kt） （month） Inventories Inventories 500 3.5 250 3.5 Inventory Ratio(Right axis) Shipment Inventory Ratio(Right axis) 450
Slide 47: Domestic Trend of Import Steel
JFE Steel Domestic Trend of Import Steel (Ordinary Steel) Market Environment （kt） 600 S.Korea China Taiwan Others 500 400 300 200 May, From From Apr, May, 100 2023 previous previous 2023 2022 month year Import Steel ＋39 ＋52 400 361 348 （kt） (+10.8%) (+14.8%) 0 Jan Mar May Jul Sep Nov Jan Mar May Jul
Slide 48: Price Trend of Import Steel
JFE Steel Domestic Market Environment Price Trend of Import Steel （k yen / t） 120 110 100 90 80 70 60 50 40 Oct Oct Oct Oct Oct Oct Jul 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 Data: The Japan Iron and Steel F
Slide 49: 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 40 From Apr,-Jun, From Jun,2023 2 Previous 2023 Apr,-Jun, month 2022 20 1 Crude Steel（Mt） 91.1 +1.1% 273.9 -2.2% Export（Mt） 7.5 -10.2
Slide 50: Crude Steel & Im/Export, China
JFE Steel Overseas Market Environment Crude Steel & Im/Export, China （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% 5.0 Change -250.0% Jun, From From May, Jun, 2023 Previous Previous 2023 2022 Month Year 0.0 -300.0
Slide 51: Metal Spread Trend (Chinese Spot Basis)
Overseas Metal Spread Trend JFE Steel 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 Spread 100 100 0 0 Metal Spread ＝ HRC Price － Raw Materials Cost *HRC Price： Chinese Spot basis Raw Materials Cost： Calculated
Slide 52: Raw Materials Trend of Sub Material's Market Price
(￠/lb) 60 110 160 210 260 1,000 1,400 1,800 2,200 2,600 600 2016.1 2016.1 2016.7 FeCr 2016.7 (US$/t) FeMn 2017.1 2017.1 2017.7 2017.7 2018.1 2018.1 2018.7 2018.7 2019.1 2019.1 2019.7 2019.7 2020.1 2020.1 2020.7 2020.7 2021.1 2021.1 2021.7 2021.7 2022.01 2022.01 2022.07 2022.07 2023.01 2023.01 2023.0
Slide 53: Raw Materials Trend of Sub Material's Market Price
JFE Steel Raw Materials Trend of Sub Material’s Market Price （yen / t） Scrap ($/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
Slide 54: Orders by Business Field
JFE Engineering Orders by Business Field （billion yen） Business FY2022 FY2023 Change Main orders received in FY2023 First-Quarter Field Actual Outlook Waste to 216.9 224.0 7.1 Renewal work of domestic waste treatment facility [Saitama] Resource Carbon Neutral 57.6 81.0 23.4 Combined Utility 21.1 17.
Slide 55: Links to the reports published during FY2022
JFE-HD Links to the reports published during FY2022 資料名 URL QRコード JFE Group REPORT https://www.jfe- 2022 holdings.co.jp/investor/library/group- report/index.html JFE Group CSR https://www.jfe- REPORT 2022 holdings.co.jp/csr/data/index.html JFE Group CSR https://www.jfe- REPORT 2022 holdings.co.jp/cs
Slide 56: Appendix(3) The 7th Medium-Term Business Plan
Appendix(3) The 7th Medium-Term Business Plan Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 56
Slide 57: 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 58: 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
Slide 59: 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 60: 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
Slide 61: [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 62: 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 63: 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 64: 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 65: 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
Slide 66: 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 67: 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
Slide 68: 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
Slide 69: 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 70: 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 71: 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
Slide 72: 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 73: 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 74: 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 75: 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 76: 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 77: 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 78: 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 79: Appendix(4) JFE Steel Carbon Neutral Strategy Briefing
Appendix(4) JFE Steel Carbon Neutral Strategy Briefing Copyright © 2023 JFE Holdings, Inc. All Rights Reserved. 79
Slide 80: JFE Steel's Transition to Low-carbon Processes
JFE Steel’s Transition to Low-carbon Processes 2050 Develop ultra-innovative technologies for carbon Establish & implement ultra- neutrality 2030 innovative technologies 2024 (GI Use of funds) Transition Period Innovation Period 18% less Use EAFs 30% or more Carbon Adopt optimal processes CO2 Expand
Slide 81: 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 CO2 CCS More energy-saving equipment Increased use of scrap Carbon-free (external conditions) Introduce EAFs electricity (external conditions) CCS Energy savi
Slide 82: 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 83: 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 t
Slide 84: 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 technologi
Slide 85: 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 86: 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 87: 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
Slide 88: Copyright © 2023 JFE Holdings, Inc. All Rights Reserved
Copyright © 2023 JFE Holdings, Inc. All Rights Reserved 88