JFE : Presentation Transcript [PDF 37p/

JFE Holdings, Inc.

Financial Results Briefing for the Fiscal Year Ended March 31, 2026

(Investors' Meeting) May 8, 2026 Participants Moderator:

We will now begin the Investors' Meeting of JFE Holdings.

Today's presenters are Mr. Yoshihisa Kitano, Representative Director and President, and Mr. Tsunao Takura, Vice President.

Let me outline today's agenda.

In the first half, Mr. Kitano will present an overview of business performance highlights.

Next, Mr. Takura will explain the financial results for fiscal year 2025 and the earnings outlook for fiscal year 2026.

In the second half, Mr. Kitano will explain the progress of key initiatives under the JFE Group Long-Term Vision, "JFE Vision 2035," and the Eighth Medium-Term Business Plan.

After all presentations, a question-and-answer session will be held. Now, President Kitano will begin with the business highlights.

Financial Highlights

• In addition to the slowdown in the Chinese economy and protectionist measures such as US tariffs,

  escalating tensions in the Middle East have created a highly uncertain geopolitical environment. This is having an impact on steel supply and demand, logistics and market conditions.

• The steel spread is significantly below medium -term projections. Following FY2025, earnings for FY2026 are also expected to fall short of initial medium-term projections.

  (The situation in the Middle East has not been taken into account.)

• In response to rising raw material prices, including those for coking coal , we are currently working to increase the sales price of steel products . We will also promptly pass on any cost increases resulting from the situation in the Middle East.

• Although the business environment remains challenging, we will adhere to the policies outlined in the "JFE Vision 2035" and the "Eighth Medium -term Business Plan" restructuring our domestic production bases into what we call the "mother steel mills" for technological development and talent cultivation, in order to create a lean and resilient production structure . Overseas, we will implement various measures, including expansion driven by strategic local partnerships in high -growth markets, primarily in India and elsewhere.

Copyright © 2026 JFE Holdings, Inc. All Rights Reserved. 4

Yoshihisa Kitano, Representative Director and President

I would like to highlight four key points regarding our performance.

Amid the slowdown of the Chinese economy, the rise of protectionist measures such as U.S. tariffs, and the escalation of tensions in the Middle East, geopolitical risks have become extremely uncertain. These factors are having an impact on steel supply and demand, logistics, and market conditions.

Steel spreads are significantly below the assumptions of our Medium-Term Business Plan. Following fiscal year 2025, our earnings forecast for fiscal year 2026 is also expected to remain below the original medium-term assumptions. While I will provide additional comments on the Middle East situation later, please note that the figures presented today do not incorporate the impact of the Middle East situation.

Also, amid rising prices of coking coal and other commodities, we are working to increase steel product selling prices. We also intend to promptly pass on cost increases resulting from the Middle East situation to selling prices.

Finally, despite this challenging environment, we will continue to advance the policies outlined in our longterm vision, "JFE Vision 2035," and the Eighth Medium-Term Business Plan. Domestically, we will restructure our production bases into what we call the "mother steel mills" for technological development and talent cultivation, in order to create a lean and resilient production structure. Overseas, we will implement various measures, including expansion driven by strategic local partnerships in high-growth markets, primarily in India and elsewhere.

On this page, the results for fiscal year 2025 are shown on the left, and the outlook for fiscal year 2026 is shown in the center.

For fiscal year 2025, business profit amounted to ¥135.3 billion, while business profit excluding inventory valuation, etc. was ¥166.3 billion.

Profit attributable to owners of the parent was ¥70.1 billion, the annual dividend was ¥80 per share, and ROE was 2.7%.

For fiscal year 2026, without incorporating the impact from the Middle East situation, business profit is forecast at ¥215.0 billion, and that excluding inventory valuation, etc. at ¥185.0 billion.

Profit attributable to owners of the parent is expected to reach ¥150.0 billion, the annual dividend is expected to remain at ¥80 per share, and ROE is projected to be approximately 6%.

Vice President Takura will later provide further details.

Regarding the impact of the Middle East situation, conditions are changing daily, making it difficult to reasonably incorporate its impact over the entire fiscal year. While responding appropriately to the situation, we intend to promptly pass on significantly increased costs to selling prices.

At present, the impacts that have materialized include partial stagnation of shipments to the Middle East as well as production impacts on customers. However, the impact on our own production and shipments is very limited in volume.

On the other hand, rising crude oil prices have led to sharp increases in the costs of bunker fuel for vessels, purchased energy such as gas and electricity, various materials, and logistics. We believe these cost increases will have a greater impact on our earnings.

We have estimated the impact assuming crude oil prices remain at WTI USD 100 per barrel. Our earnings forecast assumes WTI crude oil prices in the mid-USD 60 range per barrel; if prices rise to USD 100 per barrel, we estimate the cost impact at approximately ¥10.0 billion per month.

These increases are mainly attributable to higher bunker fuel costs, transportation expenses, energy costs, various materials, and logistics expenses.

Next, Mr. Takura will explain the detailed results for fiscal year 2025 and the outlook for fiscal year 2026.

Tsunao Takura, Vice President

On page 8, I will explain the total for fiscal year 2025 shown in the third column from the right.

Revenue totaled ¥4,539.2 billion, representing a decrease from the previously announced figure. Business profit was ¥135.3 billion, a decrease of ¥4.7 billion from the previous disclosure.

Exceptional items amounted to negative ¥23.1 billion. As shown below, impairment losses, including costs for promoting and developing land utilization of Keihin district, and the impact of the sheet business restructuring, and costs for removal in connection with construction of Green Transformation (GX) facilities such as the Kurashiki electric arc furnace offset gains on land sales, resulting in a net negative impact of

¥23.1 billion.

As a result, profit attributable to owners of the parent totaled ¥70.1 billion, a decrease of ¥4.9 billion from the previous disclosure.

This page shows revenue and segment profit by segment.

Compared with the previous disclosure, segment profit decreased by ¥2.0 billion in the steel business, increased by ¥3.9 billion in the engineering business, and decreased by ¥4.8 billion in the trading business.

This page shows consolidated cash flow and other financial indicators.

Due to the initial investment made in March 2026 in JSW JFE Steel Ltd. (JJSL), formerly BPSL, the Debt/EBITDA ratio temporarily increased.

On the other hand, the D/E ratio was 59.4%, close to our medium-term target. We intend to continue improving financial soundness toward fiscal year 2027.

Next, I will explain the results for JFE Steel.

On this page, we present key operating data. Crude steel production for fiscal year 2025 was 21.37 million tonnes, a decrease of 130 thousand tonnes from the previous forecast.

The export ratio of steel products was 40.8%, the average steel product price was approximately ¥120,000 per tonne, and the average exchange rate was ¥150 per USD, with no significant changes from the previous forecast.

This slide shows the difference between the previous forecast and actual results, with segment profit declining by ¥2.0 billion.

Breaking this down, volume and mix contributed a negative ¥3.0 billion due mainly to the 130 thousand tonnes decrease in crude steel production.

Inventory valuation, etc. resulted in a negative ¥1.0 billion due to carry over effects, while others included increased profits from group companies. Overall, these factors led to a net decline of ¥2.0 billion.

Comparing fiscal year 2024 and fiscal year 2025, while cost reductions, an increased ratio of high value-added products, and improved earnings at group companies were achieved, the sharp deterioration in spreads and the decline in volumes more than offset these improvements. As a result, business profit excluding inventory valuation, etc. declined by ¥68.3 billion.

Next, I will explain the engineering business.

Orders reached a record high of ¥836.1 billion, driven by orders for offshore wind power projects and a concentration of projects in the Waste to Resource field.

Revenue was ¥599.7 billion, marking the fourth consecutive year of record-high sales.

Segment profit improved by ¥3.9 billion from the previous forecast to ¥23.9 billion, mainly due to cost reductions.

Next, I will explain the trading business.

Segment profit amounted to ¥40.2 billion. Due to delayed recovery in North America, segment profit declined by ¥4.8 billion from the previous forecast.

Next, I would like to explain the earnings outlook for fiscal year 2026. First, let me outline the current business environment.

Regarding the selling environment, although there are differences by region and sector both domestically and overseas, we assume overall demand conditions will remain broadly flat compared with fiscal year 2025.

In the construction sector, rising construction costs and ongoing labor shortages are expected to persist, and sluggish conditions are likely to continue.

In the automotive sector, while there are signs of production shifts due to factors such as U.S. tariffs, production volume is expected to remain at roughly the same level as in fiscal year 2025.

Overseas, while there are signs that market conditions are bottoming out in parts of Asia, the impact of overproduction in China and protectionist measures, particularly in the United States, is expected to continue. We believe the harsh supply-demand environment will remain unchanged. Going forward, we will need to closely monitor developments in the Middle East with heightened vigilance.

As for raw material markets, we expect current price levels for iron ore and coking coal to continue.

Crude steel production is projected at approximately 21.5 million tons, roughly in line with fiscal year 2025.

This page shows overseas steel market conditions.

In China, market stagnation continues; however, due in part to rising energy prices, there are signs that the market is beginning to bottom out.

In India, steel prices have been increasing since the reimposition of safeguard measures in December. In the United States, steel prices have exceeded USD 1,000 per tonne recently, driven by the impact of import tariffs and a recovery in demand.

This page shows the earnings outlook for fiscal year 2026.

Sales revenue is forecast at ¥4,800.0 billion, representing an increase year on year.

Business profit is expected to reach ¥215.0 billion, and ¥185.0 billion excluding inventory valuation, etc., representing year-on-year increases in both cases.

Net financial income and expenses are forecast at negative ¥40.0 billion, reflecting the recent rise in interest rates. As a result, segment profit is forecast at ¥175.0 billion.

Below that, exceptional items amount to ¥15.0 billion, reflecting asset sales to be executed in the steel business between April and June.

Profit attributable to owners of the parent is forecast at ¥150.0 billion, representing an increase of approximately ¥80.0 billion from the previous fiscal year.

This page presents revenue and segment profit forecasts by segment.

As will be explained in detail shortly, all segments are expected to achieve both higher revenue and higher profit.

First, I will explain the outlook for the steel business.

We assume an increase of 130 thousand tonnes in crude steel production and an approximately ¥5 depreciation of the yen in foreign exchange rates.

Segment profit is forecast to increase by ¥62.0 billion compared with fiscal year 2025. On segment profit excluding inventory valuation, etc., profit is expected to increase by ¥1.0 billion. The breakdown is shown below.

First, cost reductions.

We expect a positive impact of ¥35.0 billion from the effects of investments coming online in fiscal year 2026, including Fukuyama No.6A coke oven and the EAF for stainless steel in Chiba, as well as other operational improvements.

Regarding volume, the increase in crude steel production and the expansion of high value-added products are expected to contribute approximately ¥10.0 billion.

On the other hand, steel spreads are expected to decrease by ¥20.0 billion. As mentioned earlier, we have announced a domestic price increase of at least ¥10,000 per tonne and are working toward an early recovery. Overseas steel market conditions are expected to recover gradually in the latter part of the year; however, due to timing differences in price adjustment and uneven recovery, spreads are still expected to decline by ¥20.0 billion year on year.

Inventory valuation, etc. is expected to contribute a positive ¥61.0 billion, reflecting higher raw material prices.

Other factors, including a positive ¥16.0 billion contribution from group companies, are mainly driven by overseas operations, particularly in India, where, in addition to JSW Steel's organic growth, contributions from JJSL (former BPSL)-which we begin participating in this fiscal year-are expected.

However, these positives will be more than offset by higher depreciation expenses and rising interest costs, resulting in a net negative impact of ¥24.0 billion for other items overall.

Next, I will discuss the engineering and trading businesses.

In the engineering business, steady execution of orders-including monopile projects for offshore wind power generation-is expected to result in revenue of ¥620.0 billion and segment profit of ¥25.0 billion, representing both higher revenue and higher profit.

Annual order intake is forecast at ¥600.0 billion, down from ¥830.0 billion in fiscal year 2025 when large-scale projects were concentrated. However, order backlog is expected to remain at a high level of ¥1.2 trillion at fiscal year-end, and revenue is expected to reach another record high.

For JFE Shoji, the trading business, we expect a recovery in North America business, which faced difficult conditions in fiscal year 2025, particularly in the latter part of the year. Combined with higher domestic steel prices, segment profit is forecast to increase by ¥4.8 billion year on year to ¥45.0 billion.

Next, regarding dividends.

As explained earlier, the dividend for fiscal year 2025 was ¥40 per share for the year-end, totaling ¥80 per share for the full year.

For fiscal year 2026, we also forecast a dividend of ¥80 per share.

The graph below shows the dividend payout ratio. Based on the current earnings outlook, the payout ratio for fiscal year 2026 is projected at 33.9%, returning to close to the 30% level.

This concludes my presentation.

Yoshihisa Kitano, Representative Director and President

Next, I would like to explain the progress of key initiatives.

This page reintroduces the Eighth Medium-Term Management Plan, which was announced in May last year. The plan covers the three fiscal years from 2025 to 2027.

The first key theme is the restructuring of the domestic production structure, including the expansion of high value-added product ratios and the reorganization of production structure and businesses.

The second theme is the expansion of overseas businesses, with a focus on expanding businesses driven by strategic partnerships with world's leading local companies in high-growth markets.

From the perspective of environmental and social sustainability, we will work on the development and widespread adoption of green steel products. This includes continuing R&D on ultra-innovative technologies, steadily advancing the construction of the innovative electric arc furnace at Kurashiki, and expanding sales of green steel products.

I will now explain the progress of these initiatives.

This page outlines our initiatives to enhance corporate value, emphasizing management that is conscious of capital costs.

Regarding dividends, we have set a policy of maintaining a minimum dividend of ¥80 per share during the period of this Medium-Term Business Plan.

However, as I will touch upon later, earnings levels in fiscal years 2025 and 2026 remain lower than initially planned, and the business environment continues to be very challenging. Therefore, we will carefully maintain financial soundness while balancing investments and funding sources.

The next page presents a timeline of key initiatives, with fiscal years 2025 to 2027 highlighted in blue.

New initiatives announced since May last year include the restructuring of the sheet business announced in April 2026 under the production system restructuring, as well as the restructuring of the shape steel business announced today.

The restructuring of the sheet business is scheduled to be completed in September 2028, while the restructuring of the shape steel business is scheduled to involve the transfer of business operations in April 2027.

From fiscal years 2024 to 2025, we have actively implemented and decided on large-scale and growth investments. Many of these investments are scheduled to come online from fiscal year 2028 onward. For example, these include the Fukuyama CGL under the high value-added product strategy, completion of capacity expansion for grain-oriented electrical steel sheets (GOES) in India by 2030, JJSL reaching a 10-million-tonne capacity by 2030, and the startup of the innovative electric arc furnace at Kurashiki in the first quarter of fiscal year 2028.

Many investment projects already approved are expected to come online sequentially beyond the Ninth Medium-Term Business Plan, contributing steadily to earnings growth.

Regarding the restructuring of domestic steel operations, in addition to initiatives announced last May, we have announced the restructuring of the group's shape steel business and the sheet business, shown in red.

The restructuring of the sheet business is expected to deliver an annual earnings improvement effect of

¥10.0 billion upon completion. Other initiatives are progressing largely as planned since their announcement last May.

One exception is the Fukuyama coke oven No. 4ABC, which was originally scheduled to be suspended in fiscal year 2026 but was brought forward and suspended in fiscal year 2025.

In addition, the electric arc furnace for stainless steel at Chiba, shown on the right, began operation on April 29.

Regarding the expansion of the ratio of high value-added products, while the pace of EV adoption in the automotive sector has been somewhat slower and the Round 1 offshore wind power projects were suspended, resulting in performance falling short of initial medium-term assumptions, we will steadily bring online the major investments listed here and aim to increase the ratio of high value-added products to 60% by fiscal year 2027.

The Kasaoka monopile factory, as already announced, has won the Round 2 Akita Katagami offshore wind project and is currently manufacturing products.

Regarding the execution of our overseas growth strategy, in fiscal year 2025 we focused primarily on India and have advanced two joint business projects with JSW.

The first is the expansion of the manufacturing and sales business for grain-oriented electrical steel sheets (GOES). At the two sites, J2ES and J2ES Nashik, J2ES is currently under construction, while J2ES Nashik has completed acquisition and is already contributing to production and sales. We will expand total production capacity to 350 thousand tonnes per year by fiscal year 2030 and establish the No.1 supplier position in India.

The second is the establishment of a joint venture for an integrated steelworks, JJSL. In March, we completed an initial 25% investment, and we plan to complete an additional 25% investment this June. We held the inauguration ceremony on April 24 and will focus on steadily generating earnings from this business going forward.

In the offshore wind power business, the entire JFE Group is working together on these initiatives.

JFE Engineering, as mentioned earlier, has won the Akita Katagami project and is currently manufacturing products.

Regarding the utilization of the Keihin land, there have been no major developments since last May. However, we are actively considering the sale of the advanced logistics zone, and in March we announced that we had entered into a Memorandum of Understanding with Mitsubishi Corporation to jointly pursue power generation and data center businesses. We will work steadily to bring these initiatives to fruition.

With respect to reducing GHG emissions, we will steadily advance initiatives aimed at achieving the targets set forth in the Medium-Term Business Plan.

The innovative electric arc furnace shown on this page is currently under construction and is scheduled to start operation with an annual capacity of 2 million tonnes, timed with the suspension of the aging No. 2 blast furnace at Kurashiki. One-third of the construction cost is being supported by the Japanese government.

In our digital transformation (DX) strategy, we have completed the migration of core systems to open environment. With data now properly organized, we will accelerate data utilization through the use of AI. This will support operational improvements and faster management decision-making, contributing to the sustained enhancement of corporate value. We believe a solid foundation has been established.

In our financial strategy, we aim to balance growth investments, carbon neutrality investments, and stable shareholder returns. On the cash inflow side, however, business profit has not reached the levels assumed in the Eighth Medium-Term Business Plan, and therefore we believe it is necessary to revise our capital expenditure plans based on actual earnings levels.

At the same time, we will work diligently on asset sales and inventory reductions, while maintaining our dividend policy.

The business environment in fiscal years 2025 and 2026 remains extremely challenging, and fiscal year 2026 is also expected to fall below the initial Medium-Term Business Plan assumptions.

Achieving the earnings targets for fiscal year 2027, the final year of the Eighth Medium-Term Business Plan, will be difficult. Nevertheless, we will firmly focus on restoring profitability in domestic steel business.

We have identified three priority initiatives for restoring profitability in domestic steel business.

First, improving spreads through the full implementation of steel product price increases. As reported, we are working on price increases of at least ¥10,000 per tonne for major domestic products. This price increase does not include the cost increases caused by the Middle East situation and is not a pass-through of those costs. We will separately reflect additional cost increases resulting from the Middle East situation.

Second, expanding sales of high value-added products such as electrical steel sheets and heavy plates, and steadily increasing the ratio of high value-added products.

Third, building a lean and resilient production structure and continuing efforts to reduce costs.

Overseas businesses will capture earnings from JSW's continued expansion of crude steel production capacity, including equity method income corresponding to our 15% stake, as well as earnings from JJSL, in which we hold a 50% stake.

In the engineering business, orders in the Waste to Resource and waste-to-energy fields have been extremely strong, and we will aim to improve earnings by combining these with the core infrastructure field.

In the trading business, while carefully monitoring international conditions, we will promote overseas businesses.

Finally, this table summarizes initiatives that will contribute to growth beyond the Ninth Medium-Term Business Plan.

In addition to the restructuring of domestic production systems already described, we are considering collaborations with other industry players, including the Yamato Kogyo Group and YODOKO, Ltd.

With respect to increasing the ratio of high value-added products, we will capture emerging steel demand associated with the shipbuilding industry's recovery roadmap and capacity expansion efforts being pursued jointly by the government and the shipbuilding industry.

Overseas growth initiatives will include JSW's organic growth, JJSL, J2ES, and J2ES Nashik, as well as considering overseas business driven by strategic partnerships with world's leading local companies in North America in addition to India.

［Regarding the collaboration between JFE and JSW］

Yoshihisa Kitano, Representative Director and President

Finally, I would like to share a few comments regarding the cooperation between JFE and JSW.

On April 24, we held the inauguration ceremony for JJSL, which I attended. JFE and JSW entered into a comprehensive business alliance in 2009, and in the following year we invested 15%, making JSW an equity-method affiliate of JFE.

Since then, we have provided JSW with manufacturing technologies for automotive steel sheets, quality control methods, technical services, and technologies related to electrical steel sheets.

In addition, we have cooperated on various operational technologies from blast furnace operations through rolling processes. During this period, we dispatched personnel to Indian steelworks to provide on-site guidance, and also hosted JSW engineers in Japan for training and instruction.

Thus, this partnership has gone beyond a simple capital alliance or contractual relationship and has fostered human exchange and mutual trust over time. After approximately ten years of such cooperation, around 2019 we began considering whether we could move to the next stage.

At the time of the comprehensive business alliance in 2009, JSW's crude steel production capacity was approximately 7 million tonnes per year; today it has grown to around 30 million tonnes per year. In discussions about creating a new form of partnership beyond past approaches, we first focused on collaborating with JSW in our core technology field-grain-oriented electrical steel sheets (GOES).

We believed this field required not only a technical alliance but also involvement in corporate management, and therefore negotiated on the condition of a 50-50 joint venture. As a result, we decided to establish a joint manufacturing and sales business for electrical steel sheets.

More recently, we proposed jointly participating at a 50% stake in the operation of an integrated steelworks, and agreed to move forward together. JSW itself has ambitious goals, aiming for 50 million tonnes per year and eventually 100 million tonnes of crude steel production capacity.

In light of these ambitions, we discussed how JFE could contribute, including through high value-added product technologies, steelworks operation expertise, and capital investment, and agreed to jointly participate in management. This led to the current partnership.

India is growing at an annual rate of approximately 8%, and per-capita steel consumption has now exceeded 100 kilograms. In that sense, India is at the starting point of a historical phase similar to that experienced by Japan, South Korea, and China, where steel consumption increased alongside economic growth.

While income disparity remains and it is difficult to predict whether India will grow to the same extent as Japan or South Korea, we believe steel consumption will not remain at the current level of around 100 kilograms per capita.

We continue to maintain a relationship of trust through frequent meetings involving JSW Chairman Jindal, JSW Steel President Acharya, and from JFE, myself, President Hirose, Executive Vice President Ogawa, and Senior Vice President Akagi. We would like to grow JJSL and ensure that it also contributes to JFE's growth.

For fiscal year 2026, we expect approximately ¥10.0 billion in earnings contribution from JJSL. Looking ahead, we expect this contribution to significantly exceed that level, and we are committed to steadily capturing this growth.

Finally, I would like to thank the analysts who traveled all the way to Sambalpur to visit the site and conduct on-site inspections.

END

This presentation material was prepared for the purpose of publicizing the status of our company's financial results of FY2025. The information included in this presentation does not constitute a disclosure under the Financial Instruments and Exchange Act and we do not guarantee the accuracy or completeness of the information contained within. The information included in this presentation is not an offer to sell, or a solicitation of an offer to buy, any securities in Japan, the United States or any other jurisdiction. The forward-looking statements regarding forecasts included in this presentation were based on information available to us at the time when this presentation was prepared and include uncertainties. Therefore, please refrain from making any investment decisions based solely on this document. Our company shall not be liable for any damages arising as a result of the use of this document.