Jfe Holdings, Inc. · TSE:5411
Jfe — Q1 FY2024 Earnings Presentation
85 slides from Jfe's earnings presentation, Aug 5, 2024
Slide 1: JFE Group Financial Results for First Quarter of Fiscal Year 2024
Securities Code：5411.T JFE Group Financial Results for First Quarter of Fiscal Year 2024 ending March 31, 2025 JFE Holdings, Inc. August 5, 2024 Copyright © 2024 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 2024 (April 1 to June 30, 2024) and Financial Forecast for Fiscal Year 2024 (April 1, 2024, to March 31, 2025) Dividends Financial Forecast for Fiscal Year 2024 by Segment Topics Appen
Slide 3: Financial Highlights
JFE-HD Financial Highlights Mainly due to the lower sales for automobiles and lower profits at overseas group companies (JSW, etc.) in the first half of the year, business profit* for FY2024 is expected to be ¥308.0bn., down ¥27.0bn. from the previous forecast. Profit per ton of steel business*
Slide 4: Consolidated Results for First Quarter of Fiscal Year 2024
Consolidated Results for First Quarter of Fiscal Year 2024 (April 1 to June 30, 2024) Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 4
Slide 5: Financial Results for 1Q of Fiscal Year 2024
JFE-HD Financial Results for 1Q of Fiscal Year 2024 Business profit in 1Q of FY2024 was ¥56.9bn. (decreased by ¥27.9bn. year-on-year) FY2023 FY2024 Actual Actual （billion yen） Change 1Q 1Q (Apr-Jun) (Apr-Jun) Revenue 1,262.0 1211.1 (50.9) Business Profit 84.8 56.9 (27.9) [Excluding Inventory Valua
Slide 6: Financial Results for 1Q of Fiscal Year 2024 (by Segment)
JFE-HD Financial Results for 1Q of Fiscal Year 2024 (by Segment) FY2023 FY2024 Actual Actual (billion yen) Change Contents 1Q 1Q (Apr-Jun) (Apr-Jun) Steel Business 917.2 860.6 (56.6) Engineering Business 111.1 123.8 12.7 Trading Business 370.3 358.3 (12.0) Adjustments (136.7) (131.6) 5.1 Revenue 1,2
Slide 7: ¥36.6bn. Decrease in JFE Steel's Segment Profit
¥36.6bn. Decrease in JFE Steel’s Segment Profit JFE Steel (FY2023 1Q(Actual) vs. FY2024 1Q(Actual)) （billion yen） FY2023 FY2024 Unit Change 1Q 1Q FY2023 FY2024 JFE Steel 1Q 1Q Crude Steel (Standalone) Mt 6.05 5.48 Segment Shipment (Standalone) Mt 5.23 4.70 Profit 68.1 31.5 (36.6) Average Sales Price
Slide 8: Financial Forecasts for Fiscal Year 2024
Financial Forecasts for Fiscal Year 2024 (April 1, 2024, to March 31, 2025) Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 8
Slide 9: Financial Forecast for Fiscal Year 2024
JFE-HD Financial Forecast for Fiscal Year 2024 Full-year business profit is expected to be ¥260.0bn. (decrease by ¥40.0bn. from the previous forecast, decreased by ¥38.2bn. year-on-year) Full-year profit attributable to owners of parent is expected to be ¥205.0bn. (decrease by ¥15.0bn. from the
Slide 10: Financial Forecast for Fiscal Year 2024 (by Segment)
JFE-HD Financial Forecast for Fiscal Year 2024 (by Segment) FY2024 Change Change FY2023 FY2024 Forecast FY2023 Previous （Previous) Forecast(Updated) Actual (billion yen) →FY2024 →Updated 1H Full year Full year 1H Full year Full year Full year Steel Business 1,865.8 3,716.0 3,670.0 1,780.0 3,660.0 (5
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 FY2024 is expected to be 110 yen per share, based on our payout ratio policy of approximately 30%. (as previously announced, increased by 10 yen year-on-year.) (y
Slide 12: JFE Steel: Financial Forecast for Fiscal Year 2024
JFE Steel Financial Forecast for Fiscal Year 2024 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 12
Slide 13: Business environment (Domestic)
JFE Steel Business environment（Domestic） Demand in the automotive sector is steady, but production has declined due to newly emerged certification issues. In the civil engineering and construction field, demand continues to be postponed due to labor shortages and a surge in materials. Steel dema
Slide 14: Business environment (Overseas)
JFE Steel Business environment（Overseas） Continued high production and increased exports in China, despite the sluggish domestic demand, are leading to a slackening in steel supply and a stagnant market situation. We expect that the tough business environment will last for a while. 【China’s crude
Slide 15: Raw materials market trends
JFE Steel Raw materials market trends Key Raw materials • Iron Ore: Prices are expected to remain at current levels as demand for Chinese steel continues to slump. • Coking Coal: Prices are expected to remain at current levels for a while, while there are some risks to rise such as sluggish produc
Slide 16: Crude Steel production
JFE Steel Crude Steel production Demand is expected to improve in 2H, but standalone crude steel production is expected to be around 23 million tons per year due to a decline in demand for automobiles both in Japan and overseas in 1H (-400Kt from the previous forecast). Continue to aim for a shi
Slide 17: Improving of sales price
JFE Steel Improving of sales price Sales prices are expected to improve due to passing on various costs to the sales price, reviewing extras, and correcting price levels. The spread in FY2024 including various costs* is expected to remain at the level of FY2023, despite the influences of the slu
Slide 18: Financial Forecast for Fiscal Year 2023
JFE Steel Financial Forecast for Fiscal Year 2023 FY2023 FY2024 FY24 Unit Previous Forecast 1Q 2Q 1H 2H Full Year 1Q 2Q 1H 2H Full Year billion Revenue 917.2 948.6 1,865.8 1,850.2 3,716.0 860.6 919.4 1,780.0 1,880.0 3,660.0 3,670.0 yen Segment billion 68.1 54.7 122.8 79.8 202.7 31.5 8.5 40.0 125.0 1
Slide 19: ¥40.0bn. Decrease in JFE Steel's Segment Profit (Previous vs Updated Forecast)
JFE Steel ¥40.0bn. Decrease in JFE Steel’s Segment Profit (FY2024 (Previous Forecast) vs. FY2024(Updated Forecast)) Decrease in sales for automobiles and in profit at overseas group companies (India) is expected mainly in 1H. （billion yen） FY2024 FY2024 Change JFE Steel Previous Forecast Updated F
Slide 20: ¥37.7bn. Decrease in JFE Steel's Segment Profit (FY2023 vs FY2024)
JFE Steel ¥37.7bn. Decrease in JFE Steel’s Segment Profit(FY2023 (Actual) vs. FY2024 (Forecast)) （billion yen） FY2023 FY2024 Change JFE Steel Actual Forecast Segment Profit 202.7 165.0 (37.7) Excluding Inventory Valuation etc. 200.7 213.0 12.3 1. Cost • Structural reforms effect＋25.0 +42.0 • Operati
Slide 21: ¥85.0bn. Increase in JFE Steel's Segment Profit (1H vs 2H)
JFE Steel ¥85.0bn. Increase in JFE Steel’s Segment Profit (FY2024.1H vs. FY2024.2H) A recovery in 2H is expected in demand for automobiles, sales expansion of high- value-added products, and an improvement in earnings for our India’s group companies, where an overall improvement in economic activi
Slide 22: Profitability in steel business
JFE Steel Profitability in steel business Mid-term target of business profit of ¥230bn. is not expected to be achieved mainly due to temporary factors in 1H. However, the target for profit per ton will be maintained at 10,000 yen per ton. Profit in 2H is expected to be in line with the forecast
Slide 23: JFE Engineering: Financial Forecast for Fiscal Year 2024
JFE Engineering Financial Forecast for Fiscal Year 2024 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 23
Slide 24: Financial Forecast for Fiscal Year 2024 (JFE Engineering)
JFE Engineering Financial Forecast for Fiscal Year 2024 Current Business Environment/Overview of Financial Status Expect to increase orders in the field of “Waste to Resource” and “Core infrastructure” Full year segment profit is expected to be ¥20.0bn. (as previously announced). Financial F
Slide 25: JFE Shoji: Financial Forecast for Fiscal Year 2024
JFE Shoji Financial Forecast for Fiscal Year 2024 Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 25
Slide 26: Financial Forecast for Fiscal Year 2024 (JFE Shoji)
JFE Shoji Financial Forecast for Fiscal Year 2024 Current Business Environment/Overview of Financial Status In the first half, demand in North America and China is expected to remain sluggish, resulting in a year-on-year decrease of ¥4.8bn. to ¥22.0bn. Annual segment profit is expected to be ¥
Slide 27: Topics
Topics Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 27
Slide 28: JFE Group and Japan Suiso Energy Sign Land-lease Agreement for Liquefied Hydrogen
JFE-HD, JFE Steel JFE Group and Japan Suiso Energy* Sign Land-lease Agreement for Demonstration of World’s First Liquefied Hydrogen Supply Chain Released on Jul 25th, 2024 Ohgishima was selected as the liquefied hydrogen receiving site for a Green Innovation Fund Project “Liquefied Hydrogen Supply C
Slide 29: Promote overseas expansion of JFE Resolus solutions business
JFE Steel Promote overseas expansion of JFE ResolusTM solutions business First order for continuous-caster breakout detection system for FHS in Vietnam. Released on May 22nd, 2024 JSW & JFE begin pilot demonstration of advanced Cyber-Physical System (CPS) technologies in blast furnace operations
Slide 30: Appendix(1) Profit/Loss Analysis
Appendix(1) Profit/Loss Analysis Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 30
Slide 31: 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. ¥260.0bn. Consolidated ¥320.0bn. [Excluding Inventory Valuation etc.] [¥222.4bn.] [¥162.8bn] [¥296.2bn.] [¥3
Slide 32: 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 33: Financial Results for Fiscal Year 2024
JFE Steel Financial Results for Fiscal Year 2024 FY2024 FY2022 FY2023 Unit 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q billion Revenue yen 932.6 986.3 986.9 975.3 3,881.1 917.2 948.6 915.6 934.6 3,716.0 860.6 billion Segment Profit yen 93.0 55.2 21.8 (23.2) 146.8 68.1 54.7 48.2 31.7 202.7 31.5 Ex
Slide 34: ¥0.2bn. Decrease in JFE Steel's Segment Profit (FY2023.4H vs. FY2024.1Q)
JFE Steel ¥0.2bn. Decrease in JFE Steel’s Segment Profit (FY2023.4H vs. FY2024.1H) （billion yen） FY2023 FY2024 Change JFE Steel 1Q 2Q 3Q 4Q Full Year 1Q Segment Profit 68.1 54.7 48.2 31.7 202.7 31.5 (0.2) Excluding Inventory Valuation 59.1 64.7 49.2 27.7 200.7 36.5 8.8 etc. 1. Cost ＋1.0 2. Volume an
Slide 35: ¥23.0bn. Decrease in JFE Steel's Segment Profit (1Q vs 2Q)
JFE Steel ¥23.0bn. Decrease in JFE Steel’s Segment Profit (FY2024.1Q vs. FY2024.2Q) （billion yen） FY2024 Forecast Change JFE Steel 1Q Actual 2Q Forecast 1H Forecast Segment Profit 31.5 8.5 40.0 (23.0) Excluding Inventory Valuation etc. 36.5 31.5 68.0 (5.0) 1. Cost ±0 2. Volume and Mix ＋1.0 • Crude s
Slide 36: ¥39.8bn. Decrease in JFE Steel's Segment Profit (FY2023.2H vs. FY2024.1H)
JFE Steel ¥39.8bn. Decrease in JFE Steel’s Segment Profit (FY2023.2H vs. FY2024.1H) （billion yen） FY2023 FY2024 Change JFE Steel 2H Actual 1H Forecast Segment Profit 79.8 40.0 (39.8) Excluding Inventory Valuation etc. 76.8 68.0 (8.8) 1. Cost ＋2.0 2. Volume and Mix (10.0) • Difference in sales volume
Slide 37: ¥82.8bn. Decrease in JFE Steel's Segment Profit (1H vs 1H)
JFE Steel ¥82.8bn. Decrease in JFE Steel’s Segment Profit (FY2023.1H vs. FY2024.1H) （billion yen） FY2023 FY2024 Change JFE Steel 1H Actual 1H Forecast Segment Profit 122.8 40.0 (82.8) Excluding Inventory Valuation etc. 123.8 68.0 (55.8) 1. Cost • Structural reforms effect＋22.0 ＋30.0 • Operational im
Slide 38: Debt/EBITDA Ratio
JFE-HD Debt/EBITDA Ratio Debt/EBITDA ratio as of the end of 1H of FY2024 is 4.2x. (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 4.2 10,000 3.5 3.0 8,000 Calculated from 1.0 EBITDA annualized EBITDA 6,000 forecast fo
Slide 39: Appendix(2) Business Environmental Indicators, etc.
Appendix(2) Business Environmental Indicators, etc. Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 39
Slide 40: 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 Cente Inventory Ratio(Right Axis) 4,000 4 3,000 3 2,000 2 May 2024 April 2024 May 2023 MoM YoY 1,000 1 Inventories +4 +81 4,121 4,117 4,040 （000t） (+0.1%) (+2.0%)
Slide 41: 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） 500 3.5 250 Inventories 4.0 Inventories Shipment Inventory Ratio (Right Axis) Inventory Ratio (Right Axis
Slide 42: Trend of Import Steel (Ordinary Steel)
JFE Steel Domestic Trend of Import Steel (Ordinary Steel) Market Environment （000ｔ） 600 S. Korea China Taiwan Others 500 400 300 200 100 Unit: 000t May 2024 April 2024 May 2023 MoM YoY -27 ＋32 Import Steel 432 459 400 (-5.8%) (+8.1%) 0 Mar May Mar May Mar May May Sep Mar Mar May Jul Sep Mar May Jan
Slide 43: 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 Apr 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 Ja
Slide 44: Crude Steel & Im/Export, China
JFE Steel Overseas Crude Steel & Im/Export, China Market Environment （Mt） Export (Left Axis) Import (Left Axis) Crude steel (Right Axis) （Mt） 12 120 10 100 8 80 6 60 4 April-June 40 June 2024 MoM 2024 YoY Crude Steel（Mt） 91.6 -1.3% 270.4 -1.3% 2 20 Export（Mt） 9.6 -9.1% 27.6 +16.0% 0 0 Jan Jan Jan Ja
Slide 45: Inventories in China by Product
JFE Steel Overseas Inventories in China by Product Market Environment （Mt） 30.0 100.0% Bar Rod & Wire Plate HR CR Change (YoY) 50.0% 25.0 0.0% 20.0 -50.0% 15.0 -100.0% -150.0% 10.0 -200.0% 5.0 June 2024 May 2024 June 2023 -250.0% MoM YoY -0.0 +1.5 Inventory（Mt） 12.8 12.8 11.3 0.0 (-0.1%) (+13.5%) -3
Slide 46: Metal Spread Trend
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 47: 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 2016.7 FeCr 2017.1 (US$/t) FeMn 2017.1 2017.7 2017.7 2018.1 2018.1 2018.7 2018.7 Raw 2019.1 2019.1 2019.7 Materials 2019.7 2020.1 2020.1 2020.7 2020.7 2021.1 2021.1 2021.7 2021.7 2022.1 2022.1 2022.7 2022.7 2023.1 2023.
Slide 48: Trend of Sub Material's Market Price
JFE Steel Raw Materials Trend of Sub Material’s Market Price （yen/ｔ） Scrap ($/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 49: Orders of JGreeX Green Steel
JFE Steel Orders of JGreeXTM Green Steel Fields of orders have expanded for electric power, consumer goods, and overseas as well as for domestic shipbuilding and construction. In FY2024, we aim to expand sales of JGreeXTM to all varieties and all fields. Domestic/ Field Products Customer Use Ove
Slide 50: Efforts to Create a Green Steel Market
JFE Steel Efforts to Create a Green Steel Market Appropriate environmental value is required for "actual reduction" of GHG emissions using low-carbon technologies in the transition period. With appealing the necessity of a mass balance system/CoC* based on the actual amount of reduction, promote
Slide 51: Orders by Business Field
JFE Engineering Orders by Business Field （billion yen） Business FY2023 FY2024 Change Main orders received in FY2024 First-Quarter Field Actual Outlook Waste to 243.7 257.0 13.3 Renewal works of domestic waste treatment facility [Kanagawa] Resource Carbon Neutral 54.3 60.0 5.7 Combined Utility 15.6 9
Slide 52: 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 53: Appendix(3) The 7th Medium-Term Business Plan
Appendix(3) The 7th Medium-Term Business Plan Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 53
Slide 54: 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 55: 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 56: JFE Group Environmental Vision for 2050: Toward Carbon Neutrality
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 57: 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 58: [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 59: 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 60: 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 61: 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 62: 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 63: 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 64: 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 65: 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 66: 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 67: 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 68: 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 69: 7th mid-term 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 70: 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 71: 7th mid-term 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 72: 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 73: 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 74: 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 75: 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 76: Appendix(4) JFE Steel Carbon Neutral Strategy Briefing
Appendix(4) JFE Steel Carbon Neutral Strategy Briefing Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 76
Slide 77: 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 78: 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 79: 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 80: 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 81: 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 82: 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 83: 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 84: 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 85: Copyright © 2024 JFE Holdings, Inc. All Rights Reserved
Copyright © 2024 JFE Holdings, Inc. All Rights Reserved Copyright © 2024 JFE Holdings, Inc. All Rights Reserved. 85