Japan Steel Works, Ltd. TSE:5631

Japan Steel Works : Medium-Term Management Plan JGP2028 (from FY2024 to FY2028)

Published July 19, 2024 at 4:33 a.m. UTC

Source: MarketScreener

Medium-Term Management Plan

JGP2028

From FY2024 to FY2028

June 11, 2024

THE JAPAN STEEL WORKS, LTD.

[Note]

The performance forecasts and other forward-looking statements included in this report are based on the information that was available to The Japan Steel Works, Ltd. (the "Company") and certain assumptions deemed to be reasonable at the time this report was prepared, and the actual results may differ significantly from these forecasts due to a variety of reasons.

Composition of Business Segments and Major Products

Business

Segments

Organizations

Production

Bases

Products

Industrial Machinery Products Business

Plastic Machinery B.D. / Injection Molding Machinery B.D. / Industrial Machinery B.D. / Ordnance Business H.Q.

Hiroshima

Yokohama

Nagoya (Meiki)

Pelletizers	Film and sheet	Excimer laser annealing systems
	Manufacturing equipment

Twin-screw extruders (TEX)	Magnesium alloy injection	Vacuum laminators	Defense equipment
molding machines		(Maritime)

Plastic injection	Plastic injection molding	ECR plasma	Defense equipment
molding machines	machines (Special machine) deposition systems	(Ground)

Material and Engineering Business

Japan Steel Works M&E, Inc.

Muroran

Parts for nuclear	Rotor shafts
reactor pressure vessels	for generators

Clad steel plates

Steel rolls for steel mills

Components for offshore	Steel pressure vessels
wind power generation
construction	for hydrogen storage
(Large Anvil for Pile driver)

Other Businesses

New Business

Promotion H.Q.

Markets

Plastic	Mobility	High performance	Electronic	Defense	Power generation	Renewable	Infrastructure
battery	Devices	equipment	Energy

Photonics

INDEX

PART 1

PART 2

PART 3

Review on JGP2025

Medium-Term Management Plan JGP2028

Segment Policies

PART 1	Review on JGP2025
	manama
PART 2	Medium-Term Management Plan JGP2028

PART 3 Segment Policies

Review on JGP2025 Business Results（FY2023）

Industrial Machinery Products Business: While sales are strong, it is necessary to respond to the sharp increase in orders and improve profits by maintaining and improving the in-house production rate.

Material and Engineering Business: Orders are strong even though net sales did not reach the target; profitability is on track to improve due to optimized selling prices.

		FY2023	FY2023	Target/Results
		Initial Plan	Results	Contrast

Net sales (billion yen)	250	252.5	Same level

	Industrial Machinery	190	208.3	＋9.6％
	Products Business

	Material and
	50	41.9	-16.2％
	Engineering Business


Operating income (billon yen)	20	18	-10.0%

	Industrial Machinery	21	20.4	-2.8％
	Products Business

	Material and
	3.5	3.2	-8.6％
	Engineering Business


Operating income ratio (%)	8.0	7.1	-0.9PP

ROE (%)	8.5	8.5	Same level

	© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.		6

Review on JGP2025 Capital investment, R&D investment (Until FY2023)

Although capital investment is progressing almost as planned, a major review of investment plans is necessary to respond to increasing orders, including new businesses, and to avoid lost opportunities due to facility breakdowns.

			JGP2025		Until FY2023	Evaluation
		Initial Plan			Results

Capital investment	45	Billion yen/Five	Years	24.4	Billion yen/Three years	Almost as planned

R&D investment	30	Billion yen/Five	Years	15.6	Billion yen/Three years	Almost as planned

Major capital investment projects					Backlog changes during
				the JGP2025 period

No.9 Assembly Shop (Hiroshima)	Recycling Technical Center (Hiroshima)
Assemble plastic injection molding machines/extruders	Conducting a chemical recycling test for plastics

		Industrial		Material	Company-wide
		産業機械		素形材	全社
400	Machinery		JGP2025
	From FY2021 to FY2023

300

200

100

0	FY2020	FY2021	FY2022	FY2023

Review on JGP2025 Basic Policies（Until FY2023）

4 Basic Policies

Evaluation

Achievements

Issues still to be addressed

Towards the unprecedented general manufacturer of plastic processing machinery in the world

Achieve the No. 1 global market share for existing products by strengthening competitiveness
Promote plastic processing machinery complexification

Make constant profit in Material and Engineering Business

Create new core businesses

New industrial machinery products
Photonics
Composite Materials
Metallic Materials

Promotion of ESG management

- Promoted product mix optimization and mutual complementation at the Group's production bases.
- Pelletizers maintain top global market share.
- Maintained and strengthened relationships with top global companies
for separator film manufacturing equipment.
- Established a production & service base for injection molding machines in Europe.
- Increased production capacity at the Hiroshima Plant, the main plant for plastic processing machinery.
- Improvement in profitability through the optimization of selling prices is on the horizon.
- Reviewed product portfolio to improve profitability.
• Strengthened quality assurance system (implemented measures to prevent recurrence of any misconduct in quality inspections).
- Increased orders for power-gen related components, taking advantage of the opportunity presented by the global energy policy review.
- Won orders for proposal-based development of defense equipment (railguns*).
- Expanded product portfolio by developing laser application products for

power semiconductors.
- Commenced operation of a large-scale gallium nitride (GaN) substrate demonstration facility.
- Commenced operation of the world's most advanced copper alloy material production facility.
- Established The Japan Steel Works Group's philosophy system with "Purpose" as the starting point.
- Identified important issues (materiality).

• Strengthened environmental measures, including endorsement of the TCFD.
- Strengthened the monitoring function of the Board of Directors.
- Increased the ratio of outside directors, and the ratio of female directors & auditors (to ensure skills and diversity).

Increasing production capacity to meet sharp increases in orders and sales, and maintaining and improving in-house production rate
Promoting global expansion and expanding service business
M&A for business expansion
Preventing breakdowns by investing on the aging core production facilities
Reviewing the product portfolio for stable profitability
Establishing a production system for new defense equipment and increasing production capacity
M&A to strengthen the industrial machinery products business
Enhancing information disclosure and dialogue with stakeholders
Strengthening the Group's governance structure
Enhancing and strengthening human capital

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.	*Railguns: A future gun that uses electrical energy to fire bullets. It is expected to significantly increase	8
the initial velocity of bullets compared to conventional guns using gunpowder.

Review on JGP2025

Due to significant changes in the business environment (internal and external), we reviewed the plan at the end of three years.

The new medium-term management plan aims to provide social value and increase corporate value based on the corporate group philosophy system.

Internal Environment

		JGP2025
FY2021	FY2022	FY2023
		Purpose
We established a new corporate	Vision
	philosophy for JSW Group	Value Creation Process

FY2024

FY2025

[Our Philosophy]

Global recession caused by COVID-19

Identified Materiality

External environment

Disruptions in global supply chains due to the invasion of Ukraine, friction between the US and China, etc.

Increased security tensions in countries surrounding Japan

Occurrence of weather disasters and their extensive severity around the world

	• Stable growth in global plastics demand
	• Aggressive investment in plastic and magnesium molding products due to the
		progress of EVs
Plus	• Increased demand for chemical recycling, etc. to meet plastic resource recycling
	requirements
（opportunity） •	Return to nuclear power generation compatible with energy security and
		decarbonization
	• Accelerated introduction of renewable energy generation
	• Reinforcement of defense capabilities to respond to the security environment in
		which Japan finds itself
Minus	• Postponement or cancellation of various investment plans by customers due to
	inflation or economic slowdown
（risk）	• Global increases in resource and energy prices due to supply chain disruptions, etc.
•	Delays in the procurement of various parts

Formulated a new medium- term management plan that views changes in the business environment as opportunities

JGP

2028

Corporate Philosophy of The Japan Steel Works, starting with Purpose "Our Philosophy"

Purpose

What is the JSW Group's value?

Material Revolution

making the world sustainable and prosperous.

Vision

What will JSW Group aim for?

Benefiting all stakeholders by developing and implementing

industrial machinery and new materials that solve social issues.

Value Creation Process

How can JSW Group provide value to realize the Vision?

JSW Group Core Competence

Melting, Mixing, and Solidifying

Machine Element and Precision Control

JSW Group will further refine its core competence, develop industrial machinery and new materials that solve social issues, and supply them to the world, thereby simultaneously creating social value and enhancing sustainable corporate value.