Jfe Holdings, Inc. · TSE:5411

Jfe — Q3 FY2020 Earnings Presentation

55 slides from Jfe's earnings presentation, Feb 9, 2021

  1. Slide 1: JFE Group Financial Results for Third Quarter of Fiscal Year 2020

    Securities Code: 5411.T JFE Group Financial Results for Third Quarter of Fiscal Year 2020 ending March, 31, 2021 JFE Holdings, Inc. February 9, 2021

  2. Slide 2: A table of contents

    A table of contents  JFE Holdingsʼ Financial Results for Third Quarter of Fiscal Year 2020 (April 1 to December 31, 2020)  JFE Holdingsʼ Financial Forecasts for Fiscal Year 2020 (April 1, 2020 to March 31, 2021)  Dividends  Business Performance by Segment • JFE Steel • JFE Engineering • JFE Shoj

  3. Slide 3: Consolidated Results for Third Quarter of Fiscal Year 2020

    Consolidated Results for Third Quarter of Fiscal Year 2020 (April 1 to December 31, 2020) 3

  4. Slide 4: Financial Results for Third Quarter of Fiscal Year 2020

    JFE-HD Financial Results for Third Quarter of Fiscal Year 2020 Business profit for 3 rd Quarter (Oct-Dec) was 53.1 billion yen, significantly increased by 50.2 billion yen year-on-year, due to recovery of both steel demand and steel market price from the latter part of the 1H in FY2020, and promotio

  5. Slide 5: Financial Results for Third Quarter of Fiscal Year 2020 (by Segment)

    JFE-HD Financial Results for Third Quarter of Fiscal Year 2020 (by Segment) FY2019 FY2020 Change （billion yen） Oct-Dec Apr-Dec Oct-Dec Apr-Dec Apr-Dec Revenue Steel Business 652.7 2,005.8 580.2 1,607.5 (398.3) Engineering Business 125.8 364.7 129.2 351.2 (13.5) Trading Business 271.8 829.3 224.9 676

  6. Slide 6: Consolidated Financial Forecast for Fiscal Year 2020

    Consolidated Financial Forecast for Fiscal Year 2020 (April 1, 2020 to March 31, 2021) 6

  7. Slide 7: Financial Forecast for Fiscal Year 2020

    JFE-HD Financial Forecast for Fiscal Year 2020 Business Profit for FY2020 is expected to increase by 58.0 billion yen from the previous forecast due to a further recovery in demand for steel, a significant rise in the steel market price in the steel business, and a recovery in earnings in both the e

  8. Slide 8: Financial Forecasts for Fiscal Year 2020 (by Segment)

    JFE-HD Financial Forecasts for Fiscal Year 2020 (by Segment) FY2020 FY2020 (Updated Forecast) Change (Previous Forecast） （billion yen） Full Year 1H 2H Full Year Full Year Revenue Steel Business 2,200.0 1,027.2 1,232.8 2,260.0 60.0 Engineering Business 490.0 221.9 268.1 490.0 0.0 Trading Business 930

  9. Slide 9: Financial Forecast for Fiscal Year 2020 vs FY2019

    JFE-HD Financial Forecast for Fiscal Year 2020 Business profit for 2H is expected to move into black (82.3 billion yen), and business profit for full year is expect to be -32.0 billion yen. FY2019 FY2020 (Updated Forecast) （billion yen） （Actual) 1H 2H Change Full Year (Actual) (Forecast) Full Year F

  10. Slide 10: Financial Forecasts for Fiscal Year 2020 (by Segment) vs FY2019

    JFE-HD Financial Forecasts for Fiscal Year 2020 (by Segment) FY2019 FY2020 (Updated Forecast) Change （billion yen） （Actual) Full Year 1H 2H Full Year Full Year Revenue Steel Business 2,681.3 1,027.2 1,232.8 2,260.0 (421.3) Engineering Business 512.2 221.9 268.1 490.0 (22.2) Trading Business 1,084.1

  11. Slide 11: Measures for Maintaining Financial Strength and Profit Improvement

    JFE-HD Measures for Maintaining Financial Strength and Profit Improvement Total  JFE Group: Asset Compression 165.0 billion 200.0 billion yen  Asset compression of 200.0 billion yen mainly sourced from sales of cross-holding ＋30.0 shares and lands* etc. (30.0 billion yen **Actual Apr-Dec billion y

  12. Slide 12: Progress of Cash Flow Improvements

    JFE-HD Progress of Cash Flow Improvements  Improve cash flow through profit recovery and additional asset compression  Expected Interest-bearing Debt Outstanding as of Mar. 2021 is 1.8 trillion yen (D/E 95.4%), decreased from previous year Consolidated Cash Flow Forecast in FY2020 Interest-bearing

  13. Slide 13: Dividends

    Dividends 13

  14. Slide 14: Dividends

    JFE-HD Dividends The company intends to propose a per-share dividend of 10 yen (total annual dividend of 10 yen) at the upcoming general meeting of shareholders, in light of the substantial improvement in earnings in the second half, particularly in the steel business, as well as prospects for impro

  15. Slide 15: JFE Steel

    JFE Steel Financial Results for Third Quarter and Financial Forecast for Fiscal Year 2020 15

  16. Slide 16: JFE Steel Financial Results for Third Quarter of Fiscal Year 2020

    JFE Steel Financial Results for Third Quarter of Fiscal Year 2020 FY2019 FY2020 Unit Apr-Jun Jul-Sep Oct-Dec Jan-Mar Full year Apr-Jun Jul-Sep Oct-Dec billion Revenue 666.6 686.5 652.7 675.5 2,681.3 508.7 518.6 580.2 yen billion Segment Profit 14.5 3.2 (6.3) (20.1) (8.7) (57.8) (78.4) 34.3 Yen Exclu

  17. Slide 17: 113.2 Billion Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 113.2 Billion Yen Decrease in JFE Steelʼs Segment Profit (FY2019 Apr-Dec vs. FY2020 Apr-Dec)  Segment profit decreased from the previous fiscal year amid decrease in production, sales volume, and profit of domestic and overseas subsidiary companies due to spread of COVID- 19  Segment pro

  18. Slide 18: Current Business Environment (Domestic)

    JFE Steel Current Business Environment (Domestic)  Domestic steel demand continues to recover on the whole due to recovery in activity levels of customers  Automobile production has already recovered to the same level as the previous year. Demand of other manufacturers are also expected to recover

  19. Slide 19: Current Business Environment (Overseas)

    JFE Steel Current Business Environment (Overseas)  Overseas steel demand continues to recover on the whole though there are some differences in each field.  In addition to the recovery of demand, limited supply capacity of mills in each country keeps global supply and demand tight, rising steel ma

  20. Slide 20: Assumptions for Financial Forecast

    JFE Steel Assumptions for Financial Forecast Crude Steel Production • Due to recovery in domestic and overseas steel demand, crude steel production (standalone) in FY2020 is expected to be approx. 22.70 M tons (approx. 12.50 M tons in 2H) (0.2 M tons increase from the previous forecast) Metal Spread

  21. Slide 21: JFE Steel Financial Forecast for Fiscal Year 2020

    JFE Steel Financial Forecast for Fiscal Year 2020 FY2020 FY2019 FY2020 Unit Full year 1H 2H Full year Oct-Dec Jan-Mar Full year (previous Actual Actual Actual Forecast Forecast Forecast forecast) Billion Revenue yen 2,681.3 1,027.2 580.2 652.5 1,232.8 2,260.0 2,200.0 Billion Segment profit yen (8.7)

  22. Slide 22: 55.0 Billion Yen Increase in JFE Steel's Segment Profit

    JFE Steel 55.0 Billion Yen Increase in JFE Steelʼs Segment Profit (FY2020 (Previous Forecast) vs. FY2020(Updated Forecast)) Segment profit is expected to improve by 55.0 billion yen from the previous forecast due to increase in crude steel production volume with recovery of demand in automobile sect

  23. Slide 23: 71.3 Billion Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 71.3 Billion Yen Decrease in JFE Steelʼs Segment Profit (FY2019 Actual vs. FY2020 Forecast) Segment profit is expected to decrease from the previous fiscal year amid decrease in 1H in production and sales volume, and decrease in profit of domestic and overseas subsidiary companies due to s

  24. Slide 24: 192.4 Billion Yen Increase in JFE Steel's Segment Profit

    JFE Steel 192.4 Billion Yen Increase in JFE Steelʼs Segment Profit (FY2020.1H vs. FY2020.2H) Segment profit in 2H is expected to be 56.2, remarkably improve from 1H due to increase in crude steel production with recovery of demand mainly in automobile sector, steel price recovery, and cancellation o

  25. Slide 25: Initiatives for Further Profits Improvement in FY2021

    JFE Steel Initiatives for Further Profits Improvement in FY2021 Segment Profit excluding Inventory Valuation etc. in 2H FY2020 : 29.2 billion yen  Based on further demand recovery, expected crude steel production (standalone) in 2H FY20 is approx. 12.50 Mt  Profit is expected to be a surplus in 2H

  26. Slide 26: JFE Engineering

    JFE Engineering Financial Forecast for Fiscal Year 2020 26

  27. Slide 27: JFE Engineering Financial Forecast for Fiscal Year 2020

    JFE Engineering Financial Forecast for Fiscal Year 2020 Overview  Segment profit is expected to achieve the same level of the previous fiscal year even under the spread of COVID-19 (increase by 10.0 billion yen from the previous forecast) , maintaining stable earnings. • Domestic demands in environ

  28. Slide 28: JFE Shoji

    JFE Shoji Financial Forecast for Fiscal Year 2020 28

  29. Slide 29: JFE Shoji Financial Forecast for Fiscal Year 2020

    JFE Shoji Financial Forecast for Fiscal Year 2020 Overview  Segment profit for FY2020 is expected to increase by 4.0 billion yen compared with the previous forecast amid the recovery of steel demand in both domestic and overseas market from the 2H, although the level of business activities varies b

  30. Slide 30: ESG Initiatives

    ESG Initiatives 30

  31. Slide 31: JFE Group's Eco Products

    JFE Steel JFE Groupʼs Eco Products（Develop Environmentally Friendly Products） Contribute to the realization of a sustainable society through the development of environmentally friendly products Released on December 3rd, 2020 JFE Steel Develops JNRF™ Silicon-gradient Steel Sheet for High-speed Motors

  32. Slide 32: JFE Group's Eco Solution: Oil Sludge Treatment in China

    JFE Engineering JFE Groupʼs Eco Solution（Develop Environmentally Friendly Technologies） Released on December 24th, 2020 Launch Oil Sludge Treatment Demonstration Project in China • In China, companies that discharge oil sludge store, landfill, and incinerat the sludge as industrial waste. • Recently

  33. Slide 33: JFE Group's Eco Solution: CO2 Capture Demonstration

    JFE Engineering JFE Groupʼs Eco Solution（Develop Environmentally Friendly Technologies） Released on January 20 , 2021 th Start Demonstration Testing to Capture CO₂ from Exhaust Gas emitted from Waste Treatment Plant 〜 Standardization of CO₂ capture proposal（JFE CCU-Ready）〜 CO₂ Effective Utilization

  34. Slide 34: JFE Group's Eco Solution: Used Diapers to Fuel

    JFE Engineering JFE Groupʼs Eco Solution（Develop Environmentally Friendly technologies） Released on December 23rd, 2020 Completion of Facilities to Convert Used Disposable Diapers into Fuel ＜Expected Effects＞ The amount of disposable diapers in general waste currently accounts for approximately 4%.

  35. Slide 35: Capital and Business Alliance between Japan Marine United and Imabari Shipbuilding

    Capital and Business Alliance between Japan Marine United and Imabari Shipbuilding 35

  36. Slide 36: Capital and Business Alliance: Nihon Shipyard Co., Ltd.

    JFE-HD Capital and Business Alliance between Japan Marine United and Imabari Shipbuilding Established Nihon Shipyard Co., Ltd. a JV between JMU and Imabari Shipbuilding Overview of the equity and business alliance  Imabari Shipbuildingʼs equity participation into JMU by accepting new ordinary share

  37. Slide 37: 7th Medium-Term Business Plan

    7 th Medium-Term Business Plan 37

  38. Slide 38: 7th Medium-Term Business Plan Schedule

    JFE-HD 7th Medium-Term Business Plan Schedule︓to be released in May, 2021 with financial results for Fiscal Year 2020 ending March 2021 Planning Period of 7th Medium-Term Business Plan︓ To be formulated 4 years from Fiscal Year 2021 to 2024, when the structural reform effects of steel business wil

  39. Slide 39: Appendix

    Appendix 39

  40. Slide 40: Main Financial Data

    JFE-HD Main Financial Data J-GAAP IFRS Forecast FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY18 FY19 FY20 (bn. Yen, times) (bn. Yen, times) Ordinary Income 52.2 173.6 231.0 64.2 84.7 216.3 221.1 Business profit 232.0 37.8 -32.0 EBITDA 260.6 368.9 421.5 254.4 279.9 388.8 405.9 EBITDA ＊1 428.2 269.4 208.0 ROS

  41. Slide 41: 112.7 Billion Yen Increase in JFE Steel's Segment Profit

    JFE Steel 112.7 Billion Yen Increase in JFE Steelʼs Segment Profit (FY2020.2Q(Actual) vs. FY2020.3Q(Actual)) (billion yen) FY2020 JFE Steel Apr-Jun Jul-Sep Oct-Dec Jan-Mar Full year Change Actual Actual Actual Forecast Forecast Segment profit (57.8) (78.4) 34.3 21.8 (80.0) +112.7 1. Cost ±0.0 2. Vol

  42. Slide 42: 12.5 Billion Yen Decrease in JFE Steel's Segment Profit

    JFE Steel 12.5 Billion Yen Decrease in JFE Steelʼs Segment Profit (FY2020.3Q(Actual) vs. FY2020.4Q(Forecast)) (billion yen) FY2020 JFE Steel Apr-Jun Jul-Sep Oct-Dec Jan-Mar Full year Change Actual Actual Actual Forecast Forecast Segment profit (57.8) (78.4) 34.3 21.8 (80.0) (12.5) 1. Cost ±0.0 2. Vo

  43. Slide 43: Domestic 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, 2020 Nov, 2020 Dec, 2019 previous previous 1,000 1 month year Inventories ＋18 -76

  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)

  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 100 Dec, From From Nov, Dec, Unit:000t 2020 Previous Previous 2020 2019 Month Year ±0 -82 Import Steel 359 359 441 0 (±0%) (-18.7%) Jan Mar May Jul Sep Nov Jan M

  46. Slide 46: 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） 12 100 90 10 80 70 8 60 6 50 40 4 Dec, Full Year 30 Y on Y Y on Y 2020 Change 2020 Change 20 2 Crude Steel（Mt） 91.3 +7.7% 1,053.0 +5.2% Export（Mt） 4.9 +3.5% 5

  47. Slide 47: Inventories in China by Product

    JFE Steel Overseas Market Environment Inventories in China by Product （Mｔ） 30.0 Bar Rod & Wire Plate HR CR Change by previous year (%) 100.0% 25.0 50.0% 20.0 0.0% 15.0 -50.0% 10.0 -100.0% Change Dec, From From Nov, Dec, 5.0 -150.0% 2020 Previous Previous 2020 2020 Month Year Inventories -1.5 +0.7 8.

  48. Slide 48: Overseas Metal Spread Trend (Chinese Spot Basis)

    Overseas Metal Spread Trend JFE Steel Market Environment (Chinese Spot Basis) （$/t) （$/t) 700 700 600 600 500 500 HRC 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 from market price of Iron

  49. Slide 49: Price Trend of Import Steel

    JFE Steel Domestic Market Environment Price Trend of Import Steel （000 yen/ ton） 70 65 60 55 50 45 40 Mar Jan Mar Jul Sep Jan Mar Jul Sep Jan Mar Jul Sep Jan Mar Jul Sep Jan Jul Sep Jan Mar Jul Sep May Nov May Nov May Nov May Nov May Nov May Nov 2015 2016 2017 2018 2019 2020 Data: The Japan Iron and

  50. Slide 50: Raw Materials: Iron Ore and Coking Coal

    JFE Steel Raw Materials Iron Ore and Coking Coal ($/DMT) ($/WMT) $180 Iron ore (Iron Ore Fines from Australia) $300 Coking Coal （Hard Coking Coal from Australia) $275 $160 Spot FOB Spot FOB Term-contract FOB $250 $140 Term-contract FOB $225 $120 $200 $100 $175 $150 $80 $125 $60 $100 $40 $75 17/4 17/

  51. Slide 51: Trend of Metal's Market Price

    (￠/lb) 60 80 100 120 140 160 180 1,000 1,200 1,400 1,600 400 600 800 2015.1 2015.1 2015.7 FeCr (U$/t) FeMn 2015.7 2016.1 2016.1 2016.7 2016.7 2017.1 2017.1 2017.7 2017.7 2018.1 2018.1 2018.7 2018.7 2019.1 Raw Materials 2019.1 2019.7 2019.7 2020.1 2020.1 2020.7 2020.7 2021.1 2021.1 (U$/lb) (U$/t) 800

  52. Slide 52: Trend of Sub Material's Market Price

    JFE Steel Raw Materials Trend of Sub Materialʼs Market Price （¥/ｔ） Scrap ($/B) Spot Bulker 45,000 40,000 40,000 35,000 35,000 30,000 30,000 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 0 0 2015.1 2015.7 2016.1 2016.7 2017.1 2017.7 2018.1 2018.7 2019.1 2019.7 2020.1 2020.7 2021

  53. Slide 53: Orders by Business Field

    JFE Engineering Orders by Business Field （billion yen） Business FY2019 FY2020 Main orders received in FY2020 1H Change Field Actual Forecast ★・・・New projects received in FY2020 3Q  Construction of waste treatment plant [Fukui, Fukuyama, Kurashiki, Okayama]  Improvement works of waste treatment pla

  54. Slide 54: Links to the reports published during FY2020

    JFE-HD Links to the reports published during FY2020 Report URL QR code JFE Group REPORT https://www.jfe- 2020 holdings.co.jp/en/investor/library/gro up-report/index.html JFE Group CSR https://www.jfe- REPORT 2020 holdings.co.jp/en/csr/index.html JFE Group CSR https://www.jfe- REPORT 2020 holdings.co

  55. Slide 55: Copyright © 2021 JFE Holdings, Inc.

    Copyright © 2021 JFE Holdings, Inc. All Rights Reserved 55

JFE Holdings — Q3 FY2020 Earnings Presentation on 6ix