Kobe Steel : Summary of Q&A at FY2025 Second Quarter Financial Results Briefing

Financial Results for the First Half of Fiscal 2025 and Forecast for the Full Fiscal Year

November 10, 2025 Kobe Steel, Ltd.

• Summary of Financial Results and Forecast

• Financial Results for the First Half of Fiscal 2025

• Forecast for Fiscal 2025

• Return to Shareholders

• Segment Information

• Reference Information

Financial Results for the First Half of Fiscal 2025

• Demand in the automotive, construction, civil engineering and other key sectors was roughly flat year on year.

• While ordinary profit decreased year on year to 57.6 billion yen primarily due to a loss of 10.5 billion yen from a deterioration in inventory valuation, semi-annual profit attributable to owners of parent increased year on year to 62.8 billion yen primarily due to the recording of extraordinary income on the sale of cross-shareholdings.

  Forecast for Fiscal 2025

• In the second half, demand in the construction and civil engineering sectors is expected to remain sluggish, while demand in the automotive sector is expected to exceed the previous forecast due to the reduced impact of U.S. tariffs.

• Ordinary profit for the first half increased by 7.6 billion yen compared to the previous forecast.

• Despite an increase in profit for the first half and an expected improvement of 2.0 billion yen from a reduction in the risk of U.S. tariffs, the forecast for full-year ordinary profit and profit attributable to owners of parent remains at 110.0 billion yen and 100.0 billion yen, respectively, as previously forecast, primarily due to a loss of 8.5 billion yen from a deterioration in inventory valuation.

• ROIC is expected to remain at approx. 5%, as previously forecast.

• The forecast for free cash flow has been revised upward to 100.0 billion yen, reflecting improvements in working capital and the postponement of investments, among other factors. The D/E ratio is expected to increase to approx. 0.65 times compared to the previous forecast.

  Return to Shareholders

• The interim dividend has been set at 40 yen, while the annual dividend remains unchanged at 80 yen, as previously announced.

Financial Results for the First Half of Fiscal 2025

Year on year

Net Sales 1,181.4 billion yen (67.1) billion yen

57.6

Ordinary

Profit(Loss) billion yen (13.2) billion yen

Compared to the

previous forecast

Net Sales 2,465.0 billion yen (15.0) billion yen

110.0

Ordinary

Profit(Loss) billion yen ー

Excluding

Inventory Valuation

64.1 billion yen

(2.7) billion yen

Excluding

Inventory Valuation

124.0 billion yen

8.5 billion yen

Profit(Loss) Attributable to Owners of Parent

62.8 billion yen 6.2 billion yen

Profit(Loss) Attributable to Owners of Parent

Free Cash

100.0 billion yen ー

Flow 100.0 billion yen 30.0 billion yen

FY2024 Actual

FY2025 Forecast (Current)

Net sales decreased year on year due to a decline in unit selling prices in the steel and electric power segments, affected by lower prices of primary raw materials for steel production and thermal coal for power generation, among other factors.

Ordinary profit decreased year on year due to cost increases centered on fixed costs and a deterioration in inventory valuation, despite an increase in sales in the machinery segment and progress of cost pass-through in the materials businesses.

Profit attributable to owners of parent increased year on year, despite a decline in ordinary profit, primarily due to the recording of extraordinary income from the sale of cross-shareholdings, among other factors.