日鉄物産（9810） – [Delayed]FY2021Financial ResultsandFY2022 Earnings Forecasts

Securities Code: 9810FY2021 Financial ResultsandFY2022 Earnings ForecastsMay 11, 20221© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.Executive Summary In addition to the effects of executing measures in the medium- to long-term management plan, the highest levels on record were reached for ordinary profit at ¥47.8 billion and netprofit at ¥35.4 billion in FY2021 due to factors such as the rise in steel market prices. Although the outlook for economic conditions remains very unclear for FY2022, the Company will aim to achieve ¥43.0 billion in ordinary profit by executing the measures in the medium- to long-term management plan ahead of schedule.FY2019resultsFY2020results(February forecast)First half Second halfFY2021resultsFY2022forecastOrdinary profit (billions of yen)Net profit(billions of yen)Dividends (yen)33.220.720025.715.916022.7(22.3) 25.0 (45.0) 47.815.9(16.0)19.4 (32.0)35.4160(160) 190*(320) 350*43.030.0300* The year-end dividend for FY2021 will be determined in the general meeting of shareholders.22© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.Key Points of the FY2021 Financial Results The highest levels on record were achieved due to execution of measures under the medium- to long-term management plan (strengthening the business foundation and growth strategy) in addition to a recovery in the market environment (steel volume, price, etc.) Ordinary profit Net profit ¥35.4 billion (+¥19.4 billion year on year) Proposed full-year dividend ¥350 per share (+¥190 per share year on year)¥47.8 billion (+¥22.0 billion year on year)経常…Ordinary profit当期…Net profit1.9 times+¥22.0 billion¥ billionFY2020 ordinary profit¥25.7 billionFY2021 ordinary profit¥47.8 billion25.022.719.416.115.910.79.65.2上期First half下期Second halfFirst half上期Second half下期FY2020FY20213© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.Ordinary profit +¥22.0 billion2020→2021Improvement in steel prices, etc. +¥7.7 billionGain on inventory sales +¥7.3 billionGrowth strategy+¥4.8 billionStrengthening of business foundation+¥0.8 billion2019→2021Medium- to long-term management plan measures +¥11.2 billionGrowth strategy +¥5.8 billion56%>Factors Increasing and Decreasing Ordinary Profit (FY2020 Results→FY2021 Results)FY2020 FY202119.1 → 43.22.5 → 2.11.6 → – 0.52.3 → 2.9×4-0.4Industrial Supply and Infrastructure+ Execution of medium- to long-term measures- Deterioration of P/L of group companies-2.2Textiles+ Execution of medium- to long-term measures- Reduction of customers’ inventories- Increase in production and logistics costs+0.5○5Foodstuffs+ Execution of medium- to long-term measures(Capturing demand for ready-made takeout meals, etc.)- Increase in costs due to logistics disruption47.8478¥ billion+24.0○240Steel+ Execution of medium-to long-term measures(Expansion of EV-related sales, highly functional materials for the telecommunications industry, diversification of supply sources, etc.)+ Improvement in prices and increase involume+ Gain on inventory sales25.7257FY2020results4+¥22.0 billionFY2021results© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.Increases and Decreases in Ordinary Profit of Steel Business(FY2020 Results→FY2021 Results)Sales mix, etc.Others¥ billionGrowth strategyGain on inventory sales, etc.○73+7.3+1.7○17Strengthening of business foundation+0.9○9+2.3○23・ Equity method gains and losses +10Other+4.2○42・ Expansion of EV-related sales・ Highly functional materials for the telecommunications industry・ Diversification of supply sources, etc.43.2432FY2021resultsOrdinary +¥24.0 billionFY2020FY2021Change10,000 tonsConsolidated totalNon-consolidatedSubsidiaries1,6861,2913951,8651,413452+179+121+ 5892.4 95.1 102.9 118.5 130.6 135.0 Price improvement+7.7○77・ Domestic: Up 22% year on year・ Exports: Up 63% year on year19.1191FY2020resultsConsolidated steel handling volumeThe Company’s steel sale price88.8 85.5 FY202090.52020/1Q2Q3Q4Q2021/1Q2Q3Q4Q+¥31.1k/tonFY2021121.65© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.Dividend OutlookThe Company’s DividendsNet profitDividendDividend payout ratio32.4%21.3%FY2020¥15.9 billionInterim¥15.9 billion(February forecast)Year-endFY2021dividend proposalFY2022forecast(¥16.0)¥19.4 billion(¥32.0) ¥35.4billion¥160 per share¥160 per share(¥160) ¥190 per share*(¥320) ¥350 per share*¥30.0billion¥300 per share31.9%32%26.8% 30.5% 29.9% 30.5% 31.2% 32.4% 31.9% 32%(yen per share)Full-yearFiscal year endInterim120 6060 2014150 7575 2015180 10575 2016210 12090 2017220 110110 2018200 85115 2019160 11050 2020Figures for FY2014 to 2016 are based on the reverse split of shares300 350 190*160 20212022ProposalForecast(Reference) Dividend Policy* The year-end dividend for FY2021 will be determined in the general meeting of shareholders.The Company regards the return of profits to shareholders as one of the top priorities of corporate management, and has a basic policy of providing dividends according to performance with the aim of a consolidated payout ratio of at least 30%, while improving its financial condition.© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.6Balance Sheet Working capital mainly increased due to an increase in revenue¥ billionTotal Assets ¥1,100.4 billion(+¥217.1 billion)Cash and Deposits30.5305 Total Assets ¥883.2 billionCash and Deposits56.8568 Trade 営業債権Receivables5,425 542.5655.7Trade 営業債務等Payables, 3,067 etc.306.7Interest-有利子負債Bearing Debt2,983 298.3純資産Net Assets2,780 278.0棚卸資産Inventories 113.11,131 Non-current 固定資産等Assets, etc.1,707 170.72021/3ETrade 営業債権Receivable6,786 s678.6878.7(+222.9)Trade 営業債務等Payables, 3,766 etc.376.6(+69.8)(+69.8)Interest-有利子負債Bearing Debt4,156 415.6(+117.2)(+117.2)純資産Net Assets3,081 308.1(+30.1)(+30.1)棚卸資産Inventories 200.12,001 Non-current 固定資産等Assets, etc.1,911 191.12022/3EYear-on-year change shown in parentheses7© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.Shareholders’ Equity and ROEROE13.2%6.5%¥ billion2,825 282.52,553 255.310.8% 10.5%8.9%2,306 2,364 230.6236.4210.62,106 lSharehoders’ equity2018/3 2019/3 2020/3 2021/3 2022/3Cash Flows¥ billionFY2020FY2021Profit before income taxesDepreciationShare of loss (profit) of entities accounted for using equity methodInterest, tax and othersSubtotalChange in working capitalOperating cash flowsInvestment cash flows24.95.7-2.5-4.523.623.547.2-6.452.15.9-2.4-6.149.4Free cash flow40.8-118.3Financial cash flows (change in interest-bearing debt, etc.)-9.9100.6Change in cash and deposits30.4-16.48© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.-162.4-113.0Increase in working capital balance due to increased revenue-5.3Including capital and business investment -8.2Factors Increasing and Decreasing Ordinary Profit (FY2021 Results→FY2022 Forecast)- In FY2022, in addition to uncertain conditions continuing in the global economy such as the Ukraine crisis and prolonged supply chain constraints caused by COVID-19, factors decreasing profit specific to the Company are also expected, such as a decrease in the transient profit of the previous fiscal year. – The Company aims to achieve ¥43.0 billion in ordinary profit in FY2022 through management efforts such as executing measures under the medium- to long-term management plan in advance as much as possible.¥ billionMeasures under medium- to long-term management plan(across all segments)+ Execution of growth strategy+ Strengthening of business foundationSteel- Decrease in gain on inventory sales in previous fiscal year, – system expenses and other costs- Dollar interest rates, other concerns47.8478Industrial Supply and Infrastructure+ Recovery of transient losses✓ Energy cost trendsTextiles+ (Partial) end of production and logistics disruption✓ Trend of recovery in demandFoodstuffs+ Recovery of restaurant demand✓Impact of rise in meat pricesFY2021results9© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.- Around ¥5.0 billion43.0430FY2022forecastCorporate Philosophy1. Continuing to be a corporate group driven by the aspiration of providing goods and services that offer new value to the larger society.2. Putting trust and reliability first, and by doing so developing together with our customers.3. Aiming to become the kind of organization that increasingly cultivates, utilizes, and values human resources and their talents.These materials are not subject to the audit procedures based on the Financial Instruments and Exchange Law and do not guarantee the accuracy and the completeness of their information. Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information available to the Company at the time the materials were created. These materials are not promises by the Company regarding future performance. Actual performance may differ significantly from these forecasts for a number of reasons. Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity, or other instrument. No responsibility or liability can be accepted for errors or omissions or for any losses arising from the use of this information.10© 2022 NIPPON STEEL TRADING CORPORATION All Rights Reserved.