First Quarter FY2014 Earnings Summary

Transcription

1 5401: JP NSSMY: ADR (US) 1 First Quarter FY2014 Earnings Summary Katsuhiro Miyamoto Executive Officer and Head of Div., Accounting & Finance Div. July 31 st, 2014 In this presentation, NIPPON STEEL & SUMITOMO METAL CORPORATION is abbreviated as NSSMC All output figures are presented in metric tons 2014 Unless NIPPON otherwise STEEL noted, & SUMITOMO all financial METAL figures CORPORATION are consolidated All Rights Reserved.

2 Agenda 2 1. FY2014 1Q Results & 1H Forecast 2. FY2014 Full Year Forecast 3. Progress in Mid-term Management Plan 4. Reference

3 3 1. FY2014 1Q Results & 1H Forecast

4 Overview: FY2014 1Q Results & 1H Forecast 4 Business Environment Forecast (FY2014 1H) Challenges: Positives: Demand decline due to tax hike, esp. 1Q Excess capacity of global steel industry Oversupply from China will continue Impact of tax hike would be limited Domestic demand decreased in 1Q, but will recover from 2Q Operational Highlights (FY2014 1H) Production & Sales:* Crude steel production (+0.55MMT) FY13 2H 22.64MMT FY14 1H 23.20MMT Steel shipments (+0.25MMT) FY13 2H 21.05MMT FY14 1H 21.30MMT Financial Highlights FY2014 1Q Earnings: Ordinary profit : 74.3 bn Net income : 48.3 bn Other Efforts: Keep pursuing our Mid-term Plan Reorganization, global strategy, etc. Ensure stable operation & supply FY2014 1H Guidance: Ordinary profit : bn Net income : 85.0 bn Interim dividend : 2/share (Payout ratio 21%) Non-consolidated volume, but includes NIPPON STEEL & SUMIKIN KOUTETSU WAKAYAMA *

5 Key Indicators of Demand 5 FY13 FY14 Change Housing Starts Non-residential Construction Starts (million houses) (million m³) * 1H 3Q 4Q 2H 1Q 1 * * 1 2Q(E) 1 1H(E) 13/4Q VS. 14/1Q 13/2H VS. 14/1H(E) 13/1H VS. 14/1H(E) Public Works Orders ( in billion) 4,042 1,923 2, ,129 8,171 1,880 1,992 3, Finished Auto Production (million cars) Export of Finished Auto (million cars) Overseas Auto Production ( 8 Japanese car makers) (million cars) Large & Middle sized Shovel Production (thousand units) Metal Machine Tool Production (thousand tons) Keel-laid New Ships (m. gross tons) Rig Count CY08 CY09 CY10 CY11 CY12 CY13 Latest USA 1,879 1,089 1,546 1,875 1,919 1,761 1,883 (July 25, 2014) Deep well ( 15,000ft) (May, 2014) World total (Except N. America, Russia & China) 1, ,094 1,167 1,234 1, ,344 (June, 2014) (Source: Baker Hughes, Smith international, NSSMC est.) * 1 Estimates as of mid - July, 2014

6 Domestic Steel Consumption by Industrial Sector 6 (Million tons) Crude Steel Production in Japan FY13 FY14 1H 3Q 4Q 2H 1Q 2Q(E) 1H(E) * 1 * 1 * 1 13/4Q VS. 14/1Q Change 13/2H VS. 14/1H(E) 13/1H VS. 14/1H(E) Domestic Steel Consumption (A + B) % for manufacturing sector Ordinary Steel Consumption (A) Construction Manufacturing Shipbuilding Automotive Industrial Machine Electronic Machine Specialty Steel Consumption (B) Steel Imports Steel Exports ( Source : NSSMC est.) * 1 Estimates as of mid - July, 2014

7 NSSMC Operational Highlights 7 (million tons) FY13 FY14 Change 1H 3Q 4Q 2H 1Q 2Q (E) 1H (E) 13/4Q VS. 14/1Q 13/2H VS. 14/1H(E) 13/1H VS. 14/1H(E) Pig-iron production Consolidated Crude Steel Production * Non-Consolidated Crude Steel Production Steel Shipments Seamless Pipe Shipments Average Steel Selling Price (000 yen/ ton) Steel Export Ratio (value basis (%)) FOREX ( /$) Appreciate 1 - Depreciate 4 * 1 Includes pig-iron production of Hokkai Iron & Coke corp. and NIPPON STEEL & SUMIKIN KOUTETSU WAKAYAMA CORP.

8 FY2014 1Q Results & 1H Forecast 8 ( in billion) Net Sales Operating Profit Ordinary Profit Special Profit & Loss Net Income 1H FY13 FY14 Change 3Q 4Q 2H 1Q 2Q(E) 1H(E) 13/4Q VS. 14/1Q 13/2H VS. 14/1H(E) 13/1H VS. 14/1H(E) 2, , , , , , , , [ EPS ] EBITDA EBITDA / Sales ROS ROE [ 12.7 ] [ 8.5 ] [ 5.5 ] [ 13.9 ] [ 26.7 ] [ 5.3 ] [ 4.0 ] [ 9.3 ] [ -0.2 ] [ -4.6 ] [ -3.4 ] % 12.2% 11.1% 11.6% 11.4% 10.0% -1.1% 65% 6.5% 80% 8.0% 53% 5.3% 66% 6.6% 65% 6.5% 55% 5.5% 55% 5.5% 55% 5.5% 02% 0.2% -1.1% 11% -1.0% 10% 9.4% 12.0% 7.5% 9.8% 9.6% 7.2% -0.3%

9 Ordinary Profit Variance Analysis [FY13/4Q FY14/1Q] 9 ( in billion ) FY13/4Q [A] FY14/1Q [B] Change [A B] Ordinary Profit Steel Non-Steel Adjustment (2.0) (3.1) -1.1 * 1 * 2 * 3 Inventory evaluation FY13/4Q: +4.0 FY14/1Q: ~ Incl. carry over Engineering -8.0, Chemical +1.0 New Materials ~ System Solution -2.0 Positive Negative ~ Volume Raw Group Materials Companies Prices Steel Prices * 2 & Product Mix Others FOREX Non-Steel Cost Reduction ( -0.24MT: ) 74.3 * 3 FY13 Exclude Inventory 4Q Evaluation Impact * 1 Exclude Inventory Evaluation Impact * 1 FY14 1Q

10 Ordinary Profit Variance Analysis [FY13/2H FY14/1H (E)] 10 ( in billion ) FY13/2H [A] FY14/1H(E) [B] Change [A B] Ordinary Profit Steel Non-Steel Adjustment t (1.3) * 1 Inventory evaluation FY13/2H:+5.0 FY14/1H : Incl. carry over * 3 Incl. the merger synergy +9.0 * 4 Engineering -9.0, Chemical ~, New Materials ~, System Solution Positive Negative Volume Raw Materials Prices Steel Prices * 2 & Product Mix Others Cost Reduction ( Approx MT: Approx. ) Group * 3 Companies Non-Steel * FOREX FY13 2H Exclude Inventory Evaluation Impact * 1 Exclude Inventory Evaluation Impact * 1 FY14 1H(E)

11 Non-Steel Business: FY2014 1Q Results & 1H Forecast Sales & Ordinary Profit Trend (Non-steel business total) Sales Ordinary Profit ( in billion) FY13/1H FY13/2H FY14/1H(E) Engineering & Construction Sales Ordinary Profit System Solutions Sales Ordinary Profit FY2013 FY2014 1H 2H 1Q 1H (E) FY2013 FY2014 1H 2H 1Q 1H (E) Change in Ordinary Profit (FY13/1H FY14/1H(E)) Engineering & Construction Chemicals System Solutions New Materials : Steady progress in major construction projects & efforts for cost reduction Increase : Decline of margin in chemical business & lower inventory evaluation profit in 14/1H Decrease Flat Flat Chemicals Sales Ordinary Profit New Materials Sales Ordinary Profit : SG&A increase, but due to strong earning of solution business profit will stay same : Fierce competition in wire market, but cost reduction efforts will work effectively to keep profit level ( in billion) FY2013 FY2014 1H 2H 1Q 1H (E) FY2013 1H 2H FY2014 1Q 1H (E)

12 Balance Sheets 12 As of March 31,2014 As of June 30,2014 ( in billion) ( in billion) Current Assets 2,273.3 Fixed Assets 4,808.9 Other Liabilities 1,547.9 Interest-bearing Debt 2, Equity Capital 2, Current Assets 2,205.6 Fixed Assets 4,826.5 Other Liabilities 1,581.0 Interest-bearing Debt 2,180.5 Equity Capital 2, Minority Interests in Consolidated Subsidiaries End of March, 2014 End of June, 2014 Changes Total assets (bn ) 7, , Interest-bearing debt (bn ) 2, , Equity Capital (bn ) 2, , DER

13 Year-end Dividend 13 In accordance with the basic profit distribution tion policy described below, NSSMC intends to distribute a interim dividend of 2.0 per share (consolidated dividend payout ratio of 21%) [Cash Dividend Policy] Allocate profits according to earnings Factors below need to be considered as well Reserves for future investment Earnings forecast Consolidated d and non-consolidated d financial i structure t Target dividend payout ratio: approx. 20% (consolidated basis)

14 14 2. FY2014 Full Year Forecast

15 FY2014 Full Year Forecast 15 For full year FY2014, ordinary profit of 400bn (10% raise from FY2013) expected, since impacts of tax hike etc. would be diminished at 2 nd half FY13 FY14 Change ( in billion) 1H 2H 1Q 2Q(E) 1H(E) 2H(E) 13/2H 14/1H(E) VS. VS. 14/1H(E) 14/2H(E) FY13 VS. FY14(E) Net Sales Ordinary Profit Net Income 2, , , , , , Ordinary Profit Trend Ordinary Profit (Exclude inventory evaluation impact) Ordinary Profit FY12 2H FY13 1H FY13 2H FY14 1H(E) FY14 2H(E)

16 FY2014 Full Year Forecast 16 Key Indicators of Demand FY13 FY14 Change * 2 * 2 * 2 * 1H 2H 1Q 2 * 2Q(E) 2 1H(E) 2H(E) 13/2H VS. 14/1H(E) 14/1H(E) VS. 14/2H(E) FY13 VS. FY14(E) Housing Starts (million houses) Non-residential Construction Starts Public Works Orders (million m³) ( in billion) Finished Auto Production (million cars) Export of Finished Auto (million cars) Overseas Auto Production ( 8 Japanese car makers) (million cars) Large & Middle sized Shovel Production (thousand units) Metal Machine Tool Production (thousand tons) Keel-laid New Ships (m. gross tons) ,042 4,129 8,171 1,880 1,992 3,872 3,665 7, (Source: Baker Hughes, Smith international, NSSMC est.) * 1 Estimates as of mid - July, 2014

17 FY2014 Full Year Forecast Domestic D i Steel Consumption by Industrial Sector 17 (Million tons) Crude Steel Production in Japan Domestic Steel Consumption (A + B) % for manufacturing sector Ordinary Steel Consumption (A) Construction Manufacturing Shipbuilding Automotive FY13 * 1 * 1 FY14 * 1 1H 2H 1Q 2Q(E) 1H(E) 2H(E) * 1 * 1 13/2H VS. 14/1H(E) Change 14/1H(E) VS. 14/2H(E) FY13 VS. FY14(E) Industrial Machine Electronic Machine Specialty Steel Consumption (B) ( Source : NSSMC est.) * 1 Estimates as of mid - July, 2014

18 CAPEX and Depreciation 18 NSSMC (Upper : NSC Lower :SMI) C A P E X Depreciation ( in billion) FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 (E) (310.0) (178.8) (300.0) (159.1) (330.0) (136.6) (290.0) (109.9) (265.0) (115.7) (244.0) (102.5) (273.7) (109.8) (284.0) (120.8) (291.5) (126.2) (280.9) (122.9) Major CAPEX plan CAPEX SMI DEP SMI NSC NSC Kimitsu: No.4 Coke oven for relining 29bn CAPEX DEP FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 見 (E)

19 19 3. Progress in Mid-term Management Plan

20 I. Financial Indicators Target & Progress 10% ROS Asset Compression bn Asset Compression - bn - 6.5% 6.6% At least 5% 330 & bring to 10% % 5.5% 5% * 1 1.2% 1H 1.20 FY12 2H 1H DER FY13 2H 1H(E) 0.86 FY14 2H(E) Target 1.0 At least 1.0 &bi bring to Base* 1 1H FY H 140 1H FY13 Merger Synergy ( ), improvement in production cost Annual basis <given term x 2> 50(30) 20(12) 70(42) 25(15) 2H -bn - 35(21) H(E) FY14 100(60) Half year basis 10(6) 50(30) 15(9) 10(6) (6) 15(9) 15(9) 15(9) Base* 1 10(6) 10(6) 10(6) 10(6) 3Q 2H 1H 2H 1Q 1H 2H 1H 2H 1H(E) Target FY12 FY13 FY14 FY12 FY13 FY14 * 1 Total of NSC+SMI Over 300 Target 200 Over 200 Target

21 II. Gaining world-leading cost competitiveness 21 Acceptance of VALE MAX 3 Steelworks accepted:reduction in freight expected Enables flexible allocation of vessels corresponding to inventory level el of each work Reduce freight per iron ore More works to accept, less possibility of paying demurrage charge Oita, Kimitsu & Kashima works accepted Vale Brazil in June VALE MAX Large-sized raw material carrier (0.4MMT class), operated by Brazil s Vale S.A. (loaded waterline: 23m) Largest iron ore transport vessel ever accepted into Japan Pier depth:27m Since :June, 2012 * Oita Kimitsu Pier depth:19m Since :Jan.,2013 * Pier depth:19m Since :June,2014 * Kashima * First acceptance date of VALE MAX

22 III. Pursuing Global Business Strategy 22 Auto sheet JV in India started operation First CAPL facility in India: Capture growing local demand Name of company: JCAPCPL (Jamshedpur Continuous Annealing & Processing Company Private Limited) Business description: Production & sales of cold-rolled steel sheets for mainly auto Equity ratio: Tata steel 51%, NSSMC 49% JCAPCPL started operation on May 9, 2014 Total Investment amount of JV : 40 billion Yen (Approx.) Facility: C.A.P.L. (Continuous Annealing & Processing Line) Capacity: 0.6 MMT / year (Approx) (Million Units) Trend of auto production in India * C.A.P.L * NSSMC estimate

23 III. Key Overseas Investment Plan & Progress 23 %: NSSMC investment ratio (USA) (Mexico) AM/NS Calvert 50% Investment t Major Production Amount Facility Capacity Approx. 1.55bn$ (JV with ArcelorMittal) (total price) Approx. 49% (JV with Ternium) 300MM$ TENIGAL JCAPCPL * Hot Strip, PLCL,CGL, etc 5.3MMT/Y -Hot strip CGL 0.4MMT/Y 49% Approx. CAPL 40bn 0.6MMT/Y (India) (JV with TATA) Approx. Auto NSGT 100% 300MM$ CGL 0.36MMT/Y (Thailand) BNA Approx. 50% No4 CGL 1.1 bn CNY 0.42MMT/Y (China) (JV with Bao) (New line) ICI 80% Approx. No4 Forging Approx. 46MM$ 1.3MM (USA) (New Forging Press Line) Press Line crankshaft/y NSCh 42% Pickling, wire 3.2bn Approx. 3 (China) (Capacity drawing, etc 0.042MMT/Y042MMT/Y expansion of NBC China) Construction (Singapore, etc.) (Vietnam) NSBS 50% (JV with BSL) CSVC (JV with CSC) WINSteel 30% 50% 554MM$ CGL, etc 1.40MMT/Y -CGL 115bn CDCM 120 (JV total) Container Approx. (China) (JV with Wuhan) 23bn Pipe VSB 40% 5.4bn BRL &Tube (Brazil) (JV with Vallourec) (VSB s capital) 1.20MMT/Y ETL, etc 0.80MMT/Y Pipe 54bn BRL Seamless 0.6MMT/Y Pipe, etc * Figures are from press release (joint venture agreement or investment decision) -SML FY13 FY14 FY15 Feb/14 Aug/13 May/14 Oct/13 CGL capacity ( MMT/Y) Forging press capacity ( MM Crankshaft/Y) Mar/13 JV Established Apr/13 Sep/13 Ramping up FY15 Start-up FY15 Start-up FY15 Start-up

24 Ⅳ. Pursuing Domestic Business Strategy 24 Facility close down schedule Restructuring of production framework Products Works Action Equipment FY13 FY14 FY15 Up stream process Kimitsu Close No.3 BF No.5 CC Wakayama Suspend No.2 BF (Postpone opening of new BF) No.2 CPL, No.1 Cold Strip Mill Kashima Close No.1 CAL, BAL No.1 CGL, No.2 EGL Wakayama Close No.3 PL, No.1 Cold Strip Mill, CGL, ACL Sheet No.4 CGL Nagoya Close EGL Kimitsu Close No.1 CAP Pipe & tube Kimitsu Close Butt welded pipe line Works and facility close down schedule at subsidiary 1H 4Q 1Q Done 1Q Done 4Q 4Q 4Q Done Company Description FY13 FY14 FY15 NSPC * 1 Close: 24-inch mill at Wakayama works 3Q Close: Sakai Works (Aug. 2015), Kawasaki Works (Nov.,2015) 2Q~3Q NISC Close: PL and Cold strip mill at Nishi-Nihon Works Amagasaki 4Q Done * 2 Close: PL and Cold strip mill at Funabashi Works 1Q Done (ERW reorganization) (Sheet reorganization) * 1 Nippon Steel & Sumikin Pipe Corporation * 2 Nippon Steel & Sumikin Coated Sheet Corporation 4Q

25 25 4. Reference

26 World Economic Outlook <Released on July 24, 2014 by IMF> ( ): Outlook as of Apr. 3, outlook 2015 outlook 26 World Total (3.0) 3.2 (3.6) 3.4 (3.9) 4.0 Developed Countries (1.3) 1.3 (2.2) 1.8 (2.3) 2.4 USA (1.9) 1.9 (2.8) 1.7 (3.0) 3.0 EU (-0.5) -0.4 (1.2) 1.1 (1.5) 1.5 Japan (1.5) 1.5 (1.4) 1.6 (1.0) 1.1 Developing Countries (4.7) 4.7 (4.9) 4.6 (5.3) 5.2 China (7.7) 7.7 (7.5) 7.4 (7.3) 7.1 India (4.4) 5.0 (5.4) 5.4 (6.4) 6.4 * 1 ASEAN (5.2) 5.2 (4.9) 4.6 (5.4) 5.6 Russia (1.3) 1.3 (1.3) 0.2 (2.3) 1.0 Brazil (2.3) (1.8) (2.7) * ASEAN 5 : Thailand, Malaysia, Indonesia, Philippines, Vietnam (Source : IMF)

27 Worldwide Steel Demand Trend Worldwide Total 1.38 <CY11> <CY12> 1.43 * <CY13> <CY14(E)> <CY15(E)> * bn tons 27 (Source: WSA, Apparent finished steel consumption released on Apr., 2013) * * (billion tons) ) China Others Japan/North America/Europe From CY13 approx.+3 %/year CY CY CY14 CY CY CY

28 World Crude Steel Production 28 (million tons) World Total * 1 CY13 [A] Jan - Mar CY14 Apr May Jun Apr - Jun Jan - Jun [B] CY14 [C] (B*12/6) Change (A C) 1, , (+4.0%) (+3.8%) (+3.0%) (+3.3%) (+6.1%) (+4.1%) (+3.9%) (3.8%) Japan (RC)* 2 Korea USA EU28 Russia Brazil India China (RC)* 2 (RC)* 2 (RC)* 2 (+3.1%) (+3.5%) (-2.4%) (-0.4%) (-1.7%) (-1.5%) (+0.9%) (-0.1%) (-4.4%) (+6.6%) (+12.6%) (+11.5%) (+10.8%) (+11.7%) (+9.1%) (9.3%) (+8.7%) (+4.9%) (+4.9%) (+5.1%) (+10.7%) (+6.8%) (+5.9%) (5.7%) * 1 Total of 65 countries * 2 Rate of Change from a year earlier period ( Source :World Steel Association)

29 Hot Rolled Sheets Prices by Region 29 ( Prices of Hot Rolled Sheets in local currency as of Apr. 2009=1.0 ) Cf.) The Latest Spot Price of Hot Rolled Sheets Guangzhou/ China July USA July USA EU Bao Steel Prevailing Listprice 1.0 Japan 0.5 ( Source : The Japan Iron and Steel Federation )

30 Domestic Steel Consumption Trend Long Term 30 ( million tons) Consumption(Manufacturing Sector) Consumption(Construction and Civil Engineering Sector) Crude Steel Production 120 Crude Steel Production 122 Steel Exports Steel Exports Manufacturing Sector Construction and Civil Engineering Sector ( Source:JISF Steel Consumption/ NSSMC est.)

31 Domestic Crude Steel Production Trend 31 All Japan (million tons) (Domestic Crude Steel Production of 2Q (E), FY14 released by METI on July 2, 2014) (million tons) 20.0 FY FY FY FY FY FY FY (million tons) FY14/2Q(E) SMI * 1 (Left axis) NSC * 2 (Left axis) All Japan (Right axis) FY14 1H(E) Total Production of Crude Steel ( NSC (non-consolidated)+smi ) 0.0 * 1 Includes Sumitomo Metals(Kokura), Sumitomo Metals(Naoetsu) and Sumikin Iron & Steel Co. Includes NIPPON STEEL & SUMIKIN KOUTETSU WAKAYAMA CORP * 2

32 Domestic Steel Products Prices 32 Plates & H-flange beams Hot-rolled sheets & Cold-rolled sheets ( thousand yen / ton ) ( thousand yen / ton ) H-flange beams ( )) Hot-rolled sheets (2.3xS) Plates(19mm) Cold-rolled sheets(1.0xs) July July

33 Domestic Steel Inventory Trends 33 Rolled Sheets Inventory * 2 H-flange beams Inventory (MMT) * Ordinary steel products inventory (Left axis) Rolled sheets * 1 inventory (Left axis) (Times) 1Hot-rolled, Cold-rolled and Coated sheets Ordinary steel products inventory turnover ratio (Right axis) (MMT) * 2 Inventories of the distributors dealing with H-flange beams manufactured by NSSMC Inventory Quantity (Left axis) Inventory Turnover Ratio (Right axis) (Times) ( Source : Japan Iron and Steel Federation )

34 Iron Ore & Coking Coal Price Trends Iron Ore Coking Coal (US$/dmt) 200 FOB from Australia to Japan (US$/wmt) FOB from Australia to Japan FY04 FY05 FY06 FY07 FY08 FY09 10/ 1Q 2Q 3Q 4Q 11/ 1Q 2Q 3Q 4Q 12/ 1Q 2Q 3Q 4Q 13/ 1Q 2Q 3Q 4Q 14/ 1Q 2Q FY04 FY05 FY06 FY07 FY08 FY09 10/ 1Q 2Q 3Q 4Q 11/ 1Q 2Q 3Q 4Q 12/ 1Q 2Q 3Q 4Q 13/ 1Q 2Q 3Q 4Q 14/ 1Q 2Q

35 Market Trends <Crude Oil & Scrap> 35 Crude Oil Scrap (US$/bbl) (US$/MT) (US$/ton) (thousand yen/ton) Arabian Light Crude (Left axis) Bunker (Right axis) USA Scrap(No1HMS) (US$/t, CIF Korea)(Left axis) Iron Scrap Bid Prices in Kanto Region (thousand yen/ton, in terms of high grade scrap)(right axis) 0.0

36 Market Trends <Freight & Mold Pig Iron> 36 (US$/WMT, Cape size 170 thousand tons hull form) 35 Freight Mold Pig Iron (US$/T,CIF Korea) 600 Mold Pig Iron(US$/t,CIF Korea) From Brazil From Western Australia

37 FOREX Trend 37 ( /$) Apr. 1, 2008 Latest (Won /$) /$ 1, won/$ July 29, /$ 1,025 won/$ Won /$ 1, , , , /$

38 38 This presentation does not constitute an offer or invitation to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. This presentation is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. No warranty is given as to the accuracy or completeness of the information contained herein. Investors and prospective investors in securities of any issuer mentioned herein are required to make their own independent d investigation and appraisal of the business and financial condition of such company and the nature of the securities. Any decision to purchase securities in the context of a proposed offering, if any, should be made solely on the basis of information contained in an offering circular published in relation to such an offering. By participating in this presentation, you agree to be bound by the foregoing limitations. This presentation contains statements that constitute forward looking statements. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of Nippon Steel & Sumitomo Metal Corp. or its officers with respect to its financial condition and results of operations, including, without limitation, future loan loss provisions and financial support to certain borrowers. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward looking statements as a result of various factors. The information contained in this presentation, is subject to change, including but not limited, to change of economic conditions, financial market conditions, and change of legislation / government directives. Any statements in this document. other than those of historical facts, are forward-looking statements about future performance of Nippon Steel & Sumitomo Metal Corp. and its group companies, which are based on management s assumptions and beliefs in light of information currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts.