Nisshin Steel Q1results

7/31/2019 Nisshin Steel Q1results

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Consolidated FinancialResults for the Fiscal Year

ended March 31, 2012



Qualitative Information about the

Fiscal Year ended March 31, 2012

1

As the world economy was clouded with increasing moods of stagnation and instability,

the Japanese economy gradually recovered in this period after having suffered fromsluggishness due to the effects of the Great East Japan Earthquake. However, othernegative factors including the Thailand flood, record high yen rates and economic

downturn in developing countries have adversely affected the economy.

For the iron and steel industry, the prices of such raw materials as iron ore and coalremained high, and overall difficulties mounted as exports performed poorly due to therising yen and economic sluggishness in Asia and domestic demand fell into a slump

due to increases in imports.

Against this operating environment, the Nisshin Group put more efforts into promotingrationalization and general cost-cutting measures currently in place. Cost increases thatcould not be absorbed with our own efforts had to be reflected in sales prices after the

situation was diligently explained to customers for their understanding.



Results of Operations for the Fiscal

Year ended March 31, 2012

2

(Billions of yen）

FY 2011 DifferenceDifference

a b a-b c a-c280.3 277.5 557.8 545.3 12.5 550.0 7.8

7.3 (0.3) 7.0 23.9 (16.9) 4.0 3.0

6.8 (2.2) 4.6 18.5 (13.9) 1.0 3.6

3.9 (8.7) (4.8) 12.0 (16.8) (10.0) 5.24.34 (9.73) (5.39) 13.33 (18.72) (11.06) 5.67

(Of which) Stainless Steel Business Results73.0 64.0 137.0 140.0 (3.0) 134.0 3.0

3.0 (5.0) (2.0) 8.0 (10.0) (4.0) 2.0

1.5

(8.0) (1.5) 1.5

Unrealized holding gains on

investories0.5 (4.0) (3.5) 2.0 (5.5) (5.0)

4.0 (4.0) 0.0 8.0

Net income

Income before special items

FY 2012 Previous forcast

Net sales

Operating income

1st half 2nd half

Income before special items

Net sales

Net income per share (Yen)

Unrealized holding gains on

investories



Sales condition［Non-consolidated］

3

Sales by major divisions in Japan (Volume basis)

Automotive Construction Electronics Spot Others Total

FY ended March 31, 2012 32% 24% 13% 13% 18% 100%

※ Others：Industrial machineries, Commercial and Home kitchen, etc.

1st half 2nd half

1Q 2Q 3Q 4Q Full year Full year

Ordinary steel, etc. 73 76 149 78 80 158 307 159 150 309Stainless steel 12 13 25 11 13 24 49 25 25 50

Total 85 89 174 89 93 182 356 184 175 359Ordinary steel, etc. 72.3 79.4 151.7 81.9 77.1 159.0 310.7 149.7 147.3 297.0

Stainless steel 37.0 36.0 73.0 31.0 33.0 64.0 137.0 70.0 70.0 140.0Total 109.3 115.4 224.7 112.9 110.1 223.0 447.7 219.7 217.3 437.0

16% 14% 15% 12% 15% 13% 14% 16% 15% 16%

Ordinary steel, etc. (1.1) 0.6 (0.5) 1.4 (2.0) (0.6) (1.1) 4.8 0.7 5.5Stainless steel 2.0 1.0 3.0 (1.5) (3.5) (5.0) (2.0) 5.0 3.0 8.0

(Billions of yen) Total 0.9 1.6 2.5 (0.1) (5.5) (5.6) (3.1) 9.8 3.7 13.5

129 130 129 126 120 123 126 119 125 122

82 78 80 77 80 79 79 89 82 86

Ordinary steel, etc. 77 83 160 79 80 159 319 164 161 325Stainless steel 14 16 30 12 12 24 54 28 29 57

Total 91 99 190 91 92 183 373 192 190 382

FY 2012 FY 20111st half 2nd half

Average sales price of steel products (\1,000/ton)

Export exchange rate (\/US$)

Crude steelproduction(10,000 tons)

Net volume（10,000 tons）

Net sales(Billions of yen)

Export ratio （％）

Income before

special items

Composition of overseas sales

Asia

(execept for China)China Middle East North America Europe Others Total

FY ended March 31, 2012 44% 43% 4% 3% 3% 3% 100%

※ Others：Central and South America, Africa, Australia, etc.



Income Before Special Items

Differential Breakdown

4

(Billions of yen) (Of which, stainless steel)

18.5 8.0Sales related 18.5 0.0

Purchasing price (36.5) (2.5)

Cost improvement, etc. 12.6 (2.0)

Subsidiaries (0.5) -

Unrealized holding gains on investories (8.0) (5.5)

Total (13.9) (10.0)

4.6 (2.0)

Ex. rate：86→79\/$ FeNi：9.9→10.4$/Lb FeCr：132→133￠/Lb

FY ended March 31,2011Price difference 19.0、Volume and composition difference(0.5)

Consolidated subsidiaries(Domestic)(0 .5)、wheeling-Nisshin(0 .5)、Unconsolidated affiliates 0.5

8.0→0 （Of which Stainless Steel 2.0→(3.5)）

Rationalization、Exchange rate, etc.

Breakdown

Iron ore(14.0)､Coking coal(14.5)､Oil(5.0)､Chromium(1.0)､Nickel(1.0)

FY ended March 31,2012



5




1.0 (4.0)Sales related 2.5 0.5

Purchasing price (0.5) 0.0

Cost improvement, etc. 0.1 0.0

Subsidiaries 0.0 -

Unrealized holding gains on investories 1.5 1.5

Total 3.6 2.0

4.6 (2.0)


Price difference 1.5､Volume and composition difference 1.0


FY ended March 31, 2011(Previous Forecast)

Breakdown

FY ended March 31,2012

Iron ore(0.5)

(1.5)→0 （Of which Stainless Steel(5.0)→(3.5)）





6


6.8 3.0Sales related (8.5) (7.0)

Purchasing price 5.0 4.0

Cost improvement, etc. 5.5 (0.5)


Unrealized holding gains on investories (8.0) (4.5)

Total (9.0) (8.0)

(2.2) (5.0)


2nd half of ended March 31, 2012

wheeling-Nisshin(0.5)、Unconsolidated affiliates(2.5)

4.0→(4.0) （Of which Stainless Steel 0.5→(4.0)）

1st half of ended March 31, 2012 BreakdownPrice difference(8.5)

Iron ore 0.5､Zinc 0.5、Nickel 4.0






7


2.2 (1.5)Sales related (8.5) (3.0)

Purchasing price 2.5 1.0

Cost improvement, etc. 0.9 0.0


Unrealized holding gains on investories (1.0) 0.0

Total (6.6) (2.0)

(4.4) (3.5)


Unconsolidated affiliates(0.5)

BreakdownPrice difference(8.5)

Iron ore 0.5、Coking coal 1.0、Nickel 1.0


4Q of FY ended March 31, 2012

(1.5)→(2.5) （Of which Stainless Steel(2.0)→(2.0)）

3Q of FY ended March 31, 2012



Balance Sheet

8

（Billions of yen）

VS Mar.31, 2011 VS Mar.31, 2011

Cash on hand and in banks 18.2 (0.1) Interest-bearing debt 268.0 (14.8)Accounts receivale 80.3 (10.2) Deferred tax liabilities 0.9 (0.1)Investories 132.3 (1.2) Other liabilities 164.9 (9.8)Other current assets 15.8 (2.6) Total liabilities 433.9 (24.8)Tangible and Intangible Common stock and additional

fixed assets 232.8 (16.6) paid-in capital 129.8 －Deferred tax assets 8.7 (2.0) Retained earnings 88.5 (7.1)Investments in securities 139.0 (3.4) Tresury stock, at cost (26.4) (0.0)

Accumulated other

comprehensive income (5.0) (4.7)

Minority interests 6.6 0.3Total net assets 193.4 (11.6)

627.4 (36.4) 627.4 (36.4)Total assets Total liabilities and net assets

Debit Credit



Cash Flows

9

（Billions of yen）

FY 2012 Main factor FY 2011Income before income taxes 1.1

Depreciation and amortization 36.6

Accounts receivable (Decreace) 10.1

Inventories (Decreace) 1.1

Accounts payable (Decreace) (5.2)

Acquisition of tangible fixed assets (20.2)

Decreased debt (14.8)Cash dividends (1.8)

Acquisition of investments in

securities

18.2

(16.8)

(25.1)

42.0

Cash and cash equivalents at end of

year

Cash flows fromfinancing activities

Cash flows from

investing activities

Cash flows from

operating activities

(3.6)(30.1)

24.4

18.3

(16.0)



Interest-bearing debt and D/E ratio

10

Change in Interest-Bearing Debt and D/E Ratio

Mar-11 Jun-11 Sep-11 Dec-11 Mar-12

Interest-bearing debt (Billions of yen) 2,829 2,897 2,805 2,816 2,680Ｄ/Ｅ ratio 1.42 1.44 1.42 1.49 1.43〃(based on the credit rating) ※ 1.15 1.17 1.15 1.20 1.15※ Hybrid securities that are accepted as capital according to the credit rating

by the Japan Credit Rating Agency

(Interest payment deferral provision･Unsecured corporate bond with prepayment provision

<subordinated corporate bond-Limited to qualified institutional investors>)

D/E ratio for 5 billion yen, 50% of which is considered to be capital.



剰余金の配当についてDividends

11

End-of-period dividends are ¥1.5 per share.

(Previous year : ¥2 per share)

[Basic policies regarding dividends]

Our basic policy is to distribute appropriate

surplus according to consolidated resultsand provide stable shareholder returns,while ensuring sufficient internal reservesfor future business development in order toincrease corporate value and taking into

account future financial outlook.



Forecasts of Operations for the Fiscal

Year ending March 31, 2013

12

The Company has decided against announcing its performance forecast for thenext period since reasonable estimations are difficult to make at this point of time.

Ongoing negotiations of selling prices with customers are complicated with highlyvolatile prices of raw materials and fuels, which can also necessitate changes ininventory valuations.Even in the current circumstances, the Company is committed to securing profits

through achieving appropriate sales prices and thoroughly implementingrationalization and cost reduction programs.The performance forecast will be released as soon as it is made available. Furtherinformation will be provided at the time of announcement of the first-quarterfinancial results.

In addition, the Company and Nippon Metal Industry Co., Ltd. are set to executebusiness integration effective as of October 1, 2012 through establishing a holdingcompany via a joint share transfer.The announcement of performance forecast of the holding company to be

established will be scheduled at a later date.



References



Investment and Depreciation

13

Capital expenditures (Tangible)/ Depreciation and amoritization (Billions of yen)FY 2011

1st half 2nd half Full year

Capital expenditures (Tangible) 20.3 7.1 11.4 18.5

Depreciation and amoritization 38.4 18.7 17.9 36.6

FY 2012



Labor cost and Number of employee

14

1st half 2nd half Full year

Labor cost (non-consolidated)

(Billions of yen) 32.0 17.1 17.0 34.1

Number of employee 6,074 6,089 - 5,989

FY endedMarch

31, 2011

FY ended March 31, 2012



Purchase Price

15

1st half 2nd half

1Q 2Q 3Q 4Q Full year

Nickel($/lb) 9.9 12.2 11.0 11.6 10.0 8.3 9.2 10.4

Chromium(￠/lb) 132.3 133.0 143.0 138.0 128.0 128.0 128.0 133.0

Molybdenum($/lb) 15.7 17.3 16.7 17.0 14.6 13.4 14.0 15.5Zinc($/t) 2,187 2,254 2,227 2,241 1,897 2,025 1,961 2,101

Oil($/bl) 81.6 111.0 107.6 109.3 106.4 110.8 108.6 109.0

FY endedMarch

31,2011

FY ended March 31, 2012



Distribution Ownership by Shareholder

Group

16

（Thousands）

% % %

Financial

institutions380,117 38.2% 382,965 38.5% 364,388 36.6%

Securities

companies 12,312 1.2% 8,338 0.8% 14,092 1.4%

Other companies 206,685 20.8% 206,723 20.8% 212,002 21.3%

Foreign 132,571 13.3% 133,036 13.4% 141,902 14.3%

Treasury stock 89,113 9.0% 89,130 9.0% 89,139 9.0%

Individuals 173,702 17.5% 174,308 17.5% 172,977 17.4%

Total

Ended March 31,2011 Ended September 31,2011 Ended March 31,2012

994,500



Quarterly Operating Results

17

[Consolidated] (Billions of yen)

FY 2011 1st half 2st half

1Q 2Q 3Q 4Q Full year

Net Sales 557.8 136.9 143.4 280.3 141.2 136.3 277.5 557.8

Operating income 7.0 2.9 4.4 7.3 2.5 (2.8) (0.3) 7.0

Income before special items 4.6 3.4 3.4 6.8 2.2 (4.4) (2.2) 4.6

Net income (4.8) 2.1 1.8 3.9 (1.7) (7.0) (8.7) (4.8)

Unrealized holding gains on investories 0.0 3.0 1.0 4.0 (1.5) (2.5) (4.0) 0.0

[Non-Consolidated] (Billions of yen)

Net sales Ordinary steel, etc. 297.0 72.3 79.4 151.7 81.9 77.1 159.0 310.7

Stainless steel 140.0 37.0 36.0 73.0 31.0 33.0 64.0 137.0

Total 437.0 109.3 115.4 224.7 112.9 110.1 223.0 447.7

Operating income 19.4 1.7 3.8 5.5 1.4 (4.5) (3.1) 2.4

Ordinary steel, etc. 5.5 (1.1) 0.6 (0.5) 1.4 (2.0) (0.6) (1.1)Stainless steel 8.0 2.0 1.0 3.0 (1.5) (3.5) (5.0) (2.0)

Total 13.5 0.9 1.6 2.5 (0.1) (5.5) (5.6) (3.1)

Net income 10.3 0.4 0.5 0.9 (3.2) (8.0) (11.2) (10.3)

Ordinary steel, etc. 6.0 2.0 1.5 3.5 0.5 (0.5) 0.0 3.5

Stainless steel 2.0 1.0 (0.5) 0.5 (2.0) (2.0) (4.0) (3.5)Total 8.0 3.0 1.0 4.0 (1.5) (2.5) (4.0) 0.0

Unrealized holding

gains on

investories

Income before

special items

FY 2012



Contact:

Public & Investor Relations Team,

General Administration & Risk Management Dept.

Nisshin Steel Co., Ltd.

Tel:+81 3 3216 5566

This presentation is not a disclosure document compliant with the FinancialInstruments and Exchange Law. Nisshin Steel makes no guarantee as to the

accuracy or completeness of the information contained.This presentation was created based on the contents of business results for thefiscal year ended March 31, 2012, announced on April 27, 2012. Forward-lookingstatements regarding the plans, strategies and business results contained in this

presentation may differ from actual results due to a variety of significant factors,including domestic and foreign politico-economic conditions, steel demand in majormarkets, and changes in laws and regulations. Consequently, Nisshin Steel advisesreaders not to make investment decisions based solely on this material. NisshinSteel assumes no liability for losses incurred as a result of using this presentation.

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Nisshin Steel Q1results