Jfe Holdings, Inc. · TSE:5411
Jfe — FY2021 Earnings Presentation
49 slides from Jfe's earnings presentation, May 6, 2022
Slide 1: JFE Group Financial Results for Fiscal Year 2021
Securities Code：5411.T JFE Group Financial Results for Fiscal Year 2021 ending March 31, 2022 JFE Holdings, Inc. May 6, 2022
Slide 2: A table of contents
A table of contents JFE Holdings’ Financial Results for Fiscal Year 2021 (April 1, 2021 to March 31, 2022) Business Performance by Segment • JFE Steel • JFE Engineering • JFE Shoji Dividends Fiscal Year 2022 Topic Progress of the 7 th Medium-Term Business Plan This presentation material
Slide 3: Consolidated Results for Fiscal Year 2021
Consolidated Results for Fiscal Year 2021 3
Slide 4: Financial Results for Fiscal Year 2021
JFE-HD Financial Results for Fiscal Year 2021 Despite sharply higher prices for raw materials, metals and scrap etc., strong demand for steel and the result of initiatives to improve sales price led to a significant increase in profit, particularly in the steel business. Business profit was ¥416.4
Slide 5: Financial Results for Fiscal Year 2021 (by Segment)
JFE-HD Financial Results for Fiscal Year 2021 (by Segment) FY2020 FY2021 FY2021 Actual Change Change （billion yen） Actual Forecast Full 1H 2H (C-A) (C-B) (A) (B) Year(C) Revenue Steel Business 2,255.2 3,210.0 1,410.4 1,763.0 3,173.4 918.2 (36.6) Engineering 485.7 510.0 229.2 278.9 508.2 22.5 (1.8) B
Slide 6: Progress of Cash Flow Improvements, Debt/EBITDA Ratio
JFE-HD Progress of Cash Flow Improvements, Debt/EBITDA Ratio At the end of FY2021, the Debt/EBITDA ratio exceeded the target level of the 7 th mid-term business plan (3.0x). FY2021 Progress of Debt/EBITDA Ratio Consolidated Cash Flow Debt/EBITDA Ratio (billion yen) (billion yen) (Right Axis) 1,600
Slide 7: JFE Steel Financial Results for Fiscal Year 2021
JFE Steel Financial Results for Fiscal Year 2021 7
Slide 8: JFE Steel Financial Results for Fiscal Year 2021
JFE Steel Financial Results for Fiscal Year 2021 FY2021 FY2020 FY2021 Unit Full Year Full Year Full Previous 1H 3Q 4Q 2H Year Forecast billion Revenue yen 2,255.2 1,410.4 832.8 930.2 1,763.0 3,173.4 3,210.0 billion Segment Profit yen (65.4) 158.5 93.5 71.7 165.2 323.7 303.0 Excluding Inventory billi
Slide 9: 20.7 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 20.7 Billion Yen Increase in JFE Steel’s Segment Profit (FY2021 (Previous Forecast) vs. FY2021 (Actual)) Segment profit increased from the previous forecast due to selling price improvements, such as quick reflection of raw material cost in selling prices, as well as increase in profit of
Slide 10: 389.1 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 389.1 Billion Yen Increase in JFE Steel’s Segment Profit (FY2020 (Actual) vs. FY2021 (Actual)) • The steel demand recovered significantly from FY2020, which was greatly affected by COVID-19. • Segment profit improved significantly from FY2020 due to quick reflection of raw material cost in
Slide 11: JFE Engineering Financial Results for Fiscal Year 2021
JFE Engineering Financial Results for Fiscal Year 2021 11
Slide 12: JFE Engineering Financial Results for Fiscal Year 2021
JFE Engineering Financial Results for Fiscal Year 2021 Current Business Environment/ Overview of Financial Status Orders stayed at the high level due to strong domestic demand both in the environment & energy sector and infrastructure sector. Segment profit posted 4-year consecutive increase*. • O
Slide 13: JFE Shoji Financial Results for Fiscal Year 2021
JFE Shoji Financial Results for Fiscal Year 2021 13
Slide 14: JFE Shoji Financial Results for Fiscal Year 2021
JFE Shoji Financial Results for Fiscal Year 2021 Current Business Environment/ Overview of Financial Status Full-year segment profit posted ¥55.9 bn., up ¥2.9 bn. from the previous forecast and up ¥35.9 from FY2020. Revenue and segment profit recovered from the slump brought by COVID-19 pandemic
Slide 15: Dividends
Dividends 15
Slide 16: Dividends
JFE-HD Dividends JFE Holdings has decided to propose at its general meeting of shareholders a year-end dividend of 80 yen per share, which would bring the annual dividend of 140 yen per share. 16
Slide 17: Fiscal Year 2022
Fiscal Year 2022 17
Slide 18: Financial Forecast for Fiscal Year 2022
JFE-HD Financial Forecast for Fiscal Year 2022 Our consolidated financial forecast for FY2022 remains pending because uncertainties regarding the global economy began rising as the situation in Ukraine intensified, leaving the outlook highly unclear. The major impacts on the steel business from the
Slide 19: Business environment (Steel Business)
JFE Steel Business environment（Steel Business） Domestic environment • Auto production which remained at low level due to the supply restriction of semiconductors is gradually recovering. However, its recovering speed is sluggish. • Activity level in other sectors remains solid amid the recovery in
Slide 20: Key raw materials (Steel Business)
JFE Steel Key raw materials（Steel Business） Iron Ore • The policy of annual crude steel production cuts in China continues in 2022. • The iron ore price is considered to remain at a current high level due to the economic stimulus measures in China. • However, the trend should be monitored because
Slide 21: Measures in FY2022 (Steel Business)
JFE Steel Measures in FY2022 (Steel Business) Sales prices: • Accelerate the measures of selling price improvement which we have been working on since FY2021, such as quick reflection of key raw material costs. (Measures have already been taken to reflect the current rise in coking coal prices and
Slide 22: Topic
Topic 22
Slide 23: Restructuring of Group Company
JFE-HD Restructuring of Group Company (Released on May 6th, 2022) JFE Container to be JFE Steel’s Wholly-Owned Subsidiary • JFE Steel has decided to make JFE Container, a group company that has been manufacturing and marketing high-quality steel drums and various high-pressure gas containers, a whol
Slide 24: Progress of the 7th Medium-Term Business Plan
Progress of the 7 th Medium-Term Business Plan 24
Slide 25: Main Performance & Profitability Targets and Results of Fiscal Year 2021
JFE-HD Main Performance & Profitability Targets and Results of Fiscal Year of 2021 • Business profit for FY2021 was ¥416.4 billion, exceeding the target in FY2024. • The first year was successfully launched with achieving the other profitability targets. The 7 th mid- FY2021 term business Actual pla
Slide 26: [Steel Business] Progress of the 7th Medium-Term Business Plan
JFE Steel [Steel Business] Progress of the 7 th Medium-Term Business Plan Overview of FY2021 Profit in FY2021 exceeded the target in FY2024, partially due to one-off effect of gain in inventory valuations etc.. （Profit per ton in FY2021: Approx. 14,000 yen/t Target in FY2024: 10,000yen/t） Excludin
Slide 27: Shifting Focus from Quantity to Quality
JFE Steel Shifting Focus from Quantity to Quality （Progress of Structural Reform and Major CAPEX） Steadily progress the structural reform to realize greatly reducing fixed cost and lowering breakeven point. Progress in development plans for partial area of Keihin district resulting from structur
Slide 28: [Engineering Business] Progress of the 7th Medium-Term Business Plan
JFE Engineering [Engineering Business] Progress of the 7 th Medium-Term Business Plan <Revenue & Segment Profit> FY2021 Initiatives and Future Initiatives Revenue Waste to Resource 40 ¥485.7bn. ¥508.2bn. ¥650.0bn. • Nationwide expansion of bases for recycling business and 30 started operation of rec
Slide 29: [Trading Business] Progress of the 7th Medium-Term Business Plan
JFE Shoji [Trading Business] Progress of the 7 th Medium-Term Business Plan <Segment Profit> FY2021 Initiatives and Future Initiatives 60 Record Establish No.1 global distribution and processing high system of electrical steel sheet market 50 • Promote the investment to capture the growing demand 40
Slide 30: Progress of GX & DX Investment
JFE-HD Progress of GX & DX Investment Progress of GX & DX Investment in FY2021 • Investment in each operating company in FY2021 was on track to the mid-term business plan • Total investment in FY2021(decision making basis) JFE Holdings’ investment 30％ More 40％ Less GX than DX than Investment of the
Slide 31: Initiatives to Establish Environmental Sustainability
JFE-HD Initiatives to Establish Environmental Sustainability Progress of Initiatives for JFE Group’s CO2 emissions reduction in FY2021 Raised FY2030 CO₂ emissions-reduction target • Raised the FY2030 CO₂-reduction target to 30% or more above the JFE group’s FY2013 level by expanding the applicatio
Slide 32: [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 33: Technology Development Items of the Green Innovation Fund Project
JFE Steel Technology Development Items of the Green Innovation Fund Project On December 24th, 2021, the following technology-development items were adopted as part of the Green Innovation Fund Project, ”Hydrogen Utilization in Iron and Steelmaking Processes” Project. With support from the Green
Slide 34: Main Performance & Profitability Targets and Results of Fiscal Year 2021
JFE-HD Main Performance & Profitability Targets and Results of Fiscal Year of 2021 • Earnings in FY2021 include the one-off effects such as inventory valuation gains and a rise in the overseas steel market prices. Accelerate the main measures from FY2022 to achieve the target in FY2024. • Continuous
Slide 35: Appendix
Appendix 35
Slide 36: Main Financial Data
JFE-HD Main Financial Data J-GAAP IFRS 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 -12.9 416.4 EBITDA 368.9 421.5 254.4 279.9 388.8 405.9 EBITDA ＊1 428.2 269.4 223.4 668.7 ROS ＊2 6.0%
Slide 37: 6.7 Billion Yen Increase in JFE Steel's Segment Profit
JFE Steel 6.7 Billion Yen Increase in JFE Steel’s Segment Profit (FY2021.1H vs. FY2021.2H) • Crude steel production increased, and further cost reduction was achieved in 2H • Despite rising in the price of other raw materials such as metals and scrap, segment profit in 2H increased due to selling pr
Slide 38: 21.8 Billion Yen Decrease in JFE Steel's Segment Profit
JFE Steel 21.8 Billion Yen Decrease in JFE Steel’s Segment Profit (FY2021.3Q vs. FY2021.4Q) FY2021 JFE Steel Change 1Q 2Q 3Q 4Q Full (billion yen) Year Segment Profit 69.7 88.8 93.5 71.7 323.7 (21.8) 1. Cost ±0.0 2. Volume and Mix +3.0 • Crude steel (Standalone) 6.49⇒6.69Mt +0.2Mt 3. Sales and （+18,
Slide 39: Combined Inventories of HR, CR and Coated Steel Sheet
JFE Steel Domestic Combined Inventories of HR, Market Environment CR and Coated Steel Sheet （k ton) （Month） 5,000 5 Maker Whole Saler Coil Center Inventory Ratio(Right axis) 4,000 4 3,000 3 2,000 2 Change Feb, From From Jan, Feb. 1,000 2022 previous previous 2022 2021 1 month year Inventories ±0 +1,
Slide 40: Inventories of Plate and Wide Flange Shapes
JFE Steel Domestic Inventories of Plate (Plate Shear) Market Environment and Wide Flange Shapes （k ton） Inventories of Plate (Plate Shear) （Month） （k ton） Inventories of Wide Flange Shapes （Month） 500 3.5 250 3.5 Inventories Inventories Shipment Inventory Ratio(Right axis) Inventory Ratio(Right axis
Slide 41: Trend of Import Steel (Ordinary Steel)
JFE Steel Domestic Market Environment Trend of Import Steel (Ordinary Steel) （k ton） 600 S.Korea China Taiwan Others 500 400 300 200 Change Feb, From From Jan, Feb, 100 Unit: k ton 2022 previous previous 2022 2021 month year -47 -70 Import Steel 321 368 391 (-12.8%) (-17.9%) 0 May Jun Jul May Jun Ju
Slide 42: 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 Mar, From Jan-Mar, From 2 2022 previous 2022 Jan-Mar, month 2021 20 1 Crude Steel（Mt） 88.3 +11.8% 242.3 -10.7% Export（Mt） 5.0 +36.
Slide 43: 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% 50.0% 25.0 0.0% 20.0 -50.0% 15.0 -100.0% -150.0% 10.0 -200.0% Change Mar, From From Feb, Mar, 5.0 (Mt) 2022 previous previous 2022 2021 -250.0% month year -0.7 -3
Slide 44: Metal Spread Trend (Chinese Spot Basis)
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 Metal Spread 300 300 200 200 100 100 0 0 Metal Spread ＝ HRC Price － Raw Materials Cost *HRC Price： Chinese Spot basis Raw Materials Cost： Calculated
Slide 45: Price Trend of Import Steel
JFE Steel Domestic Market Environment Price Trend of Import Steel （k yen /ｔ） 110 100 90 80 70 60 50 40 May May May May May May Mar Mar Mar Mar Mar Mar Nov Nov Nov Nov Nov Nov Sep Sep Sep Sep Sep Sep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan 2016 2017 2018 2019 2020 2021 2022 Data: The Japa
Slide 46: Strategic Investments
JFE Steel Progress of Initiatives of Steel Business （Structural Reforms and Strategic Investment in Japan） Facilities ～FY19 FY20 FY21 FY22 FY23～ Upstream Facilities To be shut down (~Sep. 2023) Structural Keihin Reforms Hot rolling Facilities To be shut down District (~Sep. 2023) Cold-rolling & Hot-
Slide 47: Orders by Business Area
JFE Engineering Orders by Business Area （billion yen） Business Actual Actual Main orders received in FY2021 Change Area FY2020 FY2021 ★: New projects received in FY2021 4Q Waste Construction of domestic waste treatment plant [Nara, Nagoya] to 220.0 203.9 -16.1 Improvement works of domestic waste tre
Slide 48: Links to the reports published during FY2021
JFE-HD Links to the reports published during FY2021 Report URL QR code JFE Group REPORT https://www.jfe- 2021 holdings.co.jp/en/investor/library/gro up-report/index.html JFE Group CSR https://www.jfe- REPORT 2021 holdings.co.jp/en/csr/data/index.html JFE Group CSR https://www.jfe- REPORT 2021 holdin
Slide 49: Copyright © 2022 JFE Holdings, Inc.
Copyright © 2022 JFE Holdings, Inc. All Rights Reserved 49