FY2013. Earnings Summary. Katsuhiko Ota Representative Director and Executive Vice President. May 9 th, 2014 NSSMY: ADR (US)

Transcription

1 FY : JP NSSMY: ADR (US) Earnings Summary Katsuhiko Ota Representative Director and Executive Vice President May 9 th, 2014 In this presentation, NIPPON STEEL & SUMITOMO METAL CORPORATION is abbreviated as NSSMC All output figures are presented in metric tons Unless otherwise noted, all financial figures are consolidated

2 Agenda 2 1. FY2013 Results 2. Progress in Mid-term Management Plan 3. Reference

3 3 1. FY2013 Results

4 Overview: FY2013 Results 4 Business Environment Highlights ht Positives: Domestic demand was strong Both in manufacturing & civil engineering sectors Operational Highlights g Production & Sales:* 1 Crude steel production FY MMT FY MMT (+2( 2.12MMT) Steel shipments FY MMT FY MMT (+1.04MMT) Financial Highlights FY2013 Earnings: Ordinary profit : bn (+ 21.0bn) Net income : bn (+ 22.7bn) * 2 Year-end dividend : 3/share (Full year : 5/share, payout ratio 18.7%) * 2 Challenges: Excess capacity of global steel industry Oversupply from China continued Other Efforts: Steady progress in Mid-term Plan Reorganization - Production frame work & group company Global strategy - Acquisition of Alabama plant in US FY2014 Guidance: Not released Will be disclosed when reasonable estimate become possible etc Non-consolidated volume including NIPPON STEEL & SUMIKIN KOUTETSU WAKAYAMA * 1 FY2012 volume = FY12/1H: Total of NSC+SMI + FY12/2H: NSSMC Changes from forecast as of Jan. 30, 2014 * 2

5 NSSMC Operational Highlights 5 (million tons) FY12 FY13 (E): [Previous Forecast] 1Q 2Q 1H 3Q 4Q 2H Total * 4 FY12 vs. FY13 Change FY13(E) vs. FY13 1H/13 vs. 2H/13 3Q/13 vs. 4Q/13 Pig-iron production * [45.10] Consolidated Crude Steel Production * 2 Non-Consolidated * 2 Crude Steel Production [48.30] [45.80] Steel Shipments * [42.10] Seamless Pipe Shipments * [1.20] Average Steel Selling Price (000 yen/ ton) Steel Export Ratio (value basis (%) ) * 3 * [85] [46] FOREX ( /$) [99] Includes pig-iron production of Hokkai Iron & Coke corp. and NIPPON STEEL & SUMIKIN KOUTETSU WAKAYAMA CORP. * 1 Figures for FY12/1H: Total of NSC+SMI * 2 Figures for FY12 /1H: the weighted average of NSC and SMI Forecast as of Jan. 30, 2014 * 3 * 4

6 FY2013 Financial Results 6 FY13 Change * 1 (E): ( in billion ) FY12 [Previous FY12 FY13(E) 1H/13 3Q/13 1Q 2Q 1H 3Q 4Q 2H Forecast] Total vs. vs. vs. vs. FY13 FY13 2H/13 4Q/13 * 2 Net Sales 5, , , , , , ,841.5 [5,450] 5, Operating Profit Ordinary Profit [340] Special Profit (Loss) Net Income (Loss) (359.5) * (258.4) [220] [ EPS ] [ 7.0 ] [ 5.7 ] [ 12.7 ] [ 8.5 ] [ 5.5 ] [ 14.0 ] [ 26.7 ] [ +1.3] [ -3.0] EBITDA EBITDA / Sales 10.5% 11.9% 11.2% 12.2% 11.1% 11.6% 11.4% ROS 1.7% 6.7% 6.3% 6.5% 8.0% 5.3% 6.6% [6.2%] 6.5% ROE 10.5% 8.4% 9.4% 12.0% 7.5% 9.8% 9.6% * 1Figures for FY12/1H: Total of NSC + SMI Forecast as of January 30, 2014 * 2 Special Profit (Loss) 1Q 2Q 3Q 4Q Total * 3 Gain on sales of investments in securities Loss of inactive facilities (14.5) (1.3) (2.6) (18.6) Total

7 Ordinary Profit Variance Analysis [FY12 FY13] 7 ( in billion ) Ordinary Profit FY12 [A] * FY13 [B] Change [A B] Steel Non-Steel Adjustment (3.8) (2.1) +1.7 * 1 2 * 3 * 4 Inventory evaluation FY12: FY13: Incl. carry over Incl. the merger synergy Incl. labor cost (bonus) increase & impact of power failure at Nagoya Works Engineering-0.4, Chemical +0.3, * 5 New Materials +0.4,System Solution +1.1 * 6 FY12: Kimitsu/ No.2 BF Relinig impact -7.0 FY13: Yawata/ /No.4 BF Relining i impact Positive Negative Raw Materials Prices * 2 Cost Reduction * 3 Non-Steel Group * 5 Companies BF Relining Impact * Others -57 Volume +100 * 4 FOREX Steel Prices (+1.04MT: ) & Product Mix FY12 Exclude Inventory Evaluation Impact Exclude Inventory Evaluation Impact * 1 * 1 * Figures for FY12: The total of NSC+SMI FY13

8 Ordinary Profit Variance Analysis [FY13(E) FY13] 8 ( in billion ) Ordinary Profit * FY13(E) [A] FY13 [B] Change [A B] Steel Non-Steel Adjustment (4.0) (2.1) +1.9 * 1 * 2 Inventory evaluation FY13(E): +5.0 FY13:+15.0 Engineering +2.7, Chemical ~, New Materials +0.3,System Solution -0.3 Positive Negative Volume -3 Steel Prices & Product Mix ~ +13 Raw Materials -10 Cost Reduction Others Non-Steel * 2 +3 ~ +3 Group Companies FOREX Prices ~ BF Relining Impact FY13 (E) * (-0.08MT: ) Exclude Inventory Evaluation Impact Exclude Inventory Evaluation Impact * 1 * 1 Forecast as of Jan. 30, 2014 FY13

9 Ordinary Profit Variance Analysis [1H/FY13 2H/FY13] 9 ( in billion ) 1H/FY13 [A] 2H/FY13 [B] Change [A B] Ordinary Profit Steel Non-Steel Adjustment (0.7) (1.3) * 1 Inventory evaluation 1H/FY13: H/ FY13: Incl. carry over * 3 Incl. the merger synergy +6.0 Incl. DEP, labor cost (bonus) increase & * 4 impact of power failure at Nagoya Works * 5 Engineering +10.4, Chemical -4.0, New Materials +0.1,System Solution +3.1 * 6 Yawata/ No.4 BF Relining impact Positive Negative Raw Materials Prices Cost Reduction * 3 Non-Steel * 5 BF Relining Impact * Volume *2 Others FOREX +20 Steel Prices * 4 Group Companies -3 & Product Mix (+0.08MT: ) H FY13 Exclude Inventory Evaluation Impact Exclude Inventory Evaluation Impact * 1 * 1 2H FY13

10 Ordinary Profit Variance Analysis [3Q/FY13 4Q/FY13] 10 ( in billion ) 3Q/FY13 [A] 4Q/FY13 [B] Change [A B] Ordinary Profit Steel Non-Steel Adjustment 0.6 (2.0) -2.6 * 1 Inventory evaluation 3Q/FY13: Q/FY13: Incl. carry over * 3 Incl. loss on disposal & dismantlement of facility and impact of power failure at Nagoya Works * 4 Engineering +6.1, Chemical -3.0 New Materials +0.8 System Solution +2.8 * 5 Yawata/ No.4 BF Relining impact Q FY13 Positive Negative Steel Prices & Product Mix ~ ~ Non-Steel -29 Volume Cost Raw * 4 FOREX Reduction Materials Prices Others * 2 * 3 Group BF Companies Relining Impact (+0.29MT: ) * Exclude Inventory Evaluation Impact Exclude Inventory Evaluation Impact * 1 * Q FY13

11 FY2013 Financial Results: Non-Steel Business 11 Sales & Ordinary Profit Trend (Non-steel business total) ( in billion) Sales Ordinary Profit FY2011 FY2012 FY2013 Engineering & Construction Sales Ordinary Profit Change in Ordinary Profit (YoY) Engineering & Construction Chemicals System Solutions New Materials Flat Chemicals : Effort for cost reduction & margin improvement. Positive impact of Yen depreciation : Margin improvement in chemical business IncreaseProfit increased in brisk functional business : Sales increased in solution business Increase Gross profit margin improved also : Fierce competition in wire market, but effort for cost reduction resulted Increase in increase of profit ( in billion) Sales Ordinary Profit System Solutions New Materials Sales Sales Ordinary Profit Ordinary Profit

12 Balance Sheets & Cash Flows 12 Balance Sheets ( in trillion) Cash Flows ( in billion) As of March 31,2013 Current Assets 2.1 Fixed Assets 4.9 Other Liabilities 1.7 Interest- 2.2 bearing Debt 2.5 Equity Capital Minority Interests in Consolidated Subsidiaries As of March 31,2014 Income before tax & minority interest Current Other Depreciation & amortization Assets Liabilities Interest- Equity in net income of affiliates bearing Debt Income taxes Fixed 2.2 Acquisition of tangible & Assets Equity intangible fixed assets Capital Acquisition iti of securities Asset compression Working capital, etc End of FY2012 End of FY2013 Changes Total assets (tn ) Interest-bearing debt (bn ) 2, , DER Cash & cash equivalents (bn ) Free Cash Flow Net increase (decrease) of debts Cash dividends Others Changes in Cash & Cash equivalents

13 CAPEX and Depreciation 13 NSSMC (Upper : NSC Lower :SMI) C A P E X Depreciation ( in billion) FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY (270.0) (135.8) (310.0) (178.8) (300.0) (159.1) (330.0) (136.6) (290.0) (109.9) (265.0) (115.7) (192.5) (72.2) (244.0) (102.5) (273.7) (109.8) (284.0) (120.8) (291.5) (126.2) (280.9) (122.9) Newly announced CAPEX plan Kimitsu: No.4 Coke oven for relining 29bn CAPEX CAPEX DEP SMI DEP SMI NSC NSC FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

14 Year-end Dividend 14 As announced on January 30, 2014, NSSMC intends to distribute a year-end dividend payment of 3.0 per share and plans to request approval for this at the General Meeting of Shareholders This would bring the full-year dividend distribution amount to 5.0 per share (Consolidated dividend payout ratio of approx 18.7%) [Cash Dividend Policy] Allocate profits according to earnings Factors below need to be considered as well Reserves for future investment Earnings forecast Consolidated and non-consolidated financial structure Target dividend payout ratio: approx. 20% (consolidated basis)

15 15 2. Progress in Mid-term Management Plan

16 I. Target Financial Indicators & Progress ROS 10% Asset Compression 6.5% 6.6% At least 5% & bring to 10% Mid-term progress 5% 2.3% 140 Over * 12% 1.2% 1 1H 1.20* 2 1H Base* 1 2H 1H 2H 1H 2H 1H Target FY12 FY13 FY12 FY13 FY ( ), improvement in production cost 2H 300 Target -bn - DER Merger Synergy -bn H H 0.86 FY13 2H 1.0 At least 1.0 &bringto Target As end of 3Q/FY12 * 1 Total of NSC+SMI * 2 Annual basis <given term x 2> 20(12) 50(30) 25(15) 15(9) * 1 10(6) Base 10(6) 10(6) 1H 2H 1H FY12 FY13 70(42) Half year basis 35(21) 10(6) 15(9) 10(6) 2H Target 16

17 II. With Distinctive Advanced Technology Mid-term progress 17 Ichimura Award Contribution Award Photo b K sh Rail a Compan Invention of railway vehicles active suspensions Photo by Kyushu Railway Company National Invention Award 21 st Century Invention Award Invention of electrical steel with resource-saving design Monodzukuri Nippon Grand Award Special Award Invention of new steel making technology with less impact on environment 2013 Top 100 Global Innovator Award Honored as one of the world s top 100 most innovative corporations & institutions National Invention Award Patent Office Commissioner s i Award Invention of new type of copper bonding wire for LSI MP s 2014 Corrosion Innovation Award of the Year Our OCTG enables extremely deep gas well development, which used to be regarded as impossible Commendation by Minister of MEXT Science & technology Award (Received 2 awards for 2 consecutive years) Invention of waste plastics recycling technology

18 II. With Distinctive Advanced Technology Mid-term progress 18 World Longest Railway Rails: 150-Meter Rails Established production & ship system of world longest rails Specialized transport equipments for shipment 150-meter rails just after being rolled 150-meter rails being handled Rails with less welded parts will help customers to reduce maintenance frequency to stabilize rail track

19 III. Pursuing Global Business Strategy Strategy to capture growing ASEAN market Mid-term progress 19 First overseas production of our strategic product: SuperDyma TM SuperDyma (SD) TM to be produced at NS Blue Scope (Thailand) No2. Metal coating line Capital expense: AU$ 33million (Approx.) Invest in existing No2. metal coating line to produce SD Start t of production:3 rd Quarter of 2015 SuperDyma TM NS Blue Scope Coated steel sheet with excellent corrosion Business description: Production and sale of coated steel sheet, resistance which patent belongs to NSSMC painted steel sheet & roll-formed building products Examples of use Production Facilities (approx. capacity /year): - Home appliances: Cold rolling: 0.8MMT, Galvanizing: 1.4MMT Refrigerators, wash machines, etc. Painting: 0.5MMT - Building components: Purlin, truss, etc Operating bases:30 bases in 7countries *1 7 countries: Thailand, Indonesia, Malaysia, Vietnams, Singapore, Brunei, The United States * 1

20 II. Pursuing Global Business Strategy Overseas JVs started operation: Formed stable supply systems at growing markets Mid-term progress 20 March 2013 March 2014 change Overseas JV capacity * 1 * 1 Approx. 9MMT Approx. 19MMT * 1 Total capacity of major JV. Taken no account of NSSMC s investment ratio. UP 10MMT (+110%) For autos For home appliances and cargo For energy For railways For construction February 2014: Purchasing transaction completed & JV started Total purchasing price: Approx. US$ 1.55 billion Facility & capacity (approx. volume / year): Hot strip mill (5.3MMT), PLCL (2.5 MMT), CGL(1.4 MMT)

21 III. Key Overseas Investment Plan & Progress Mid-term progress 21 Auto Construction %: NSSMC investment ratio AM/NS Calvert 50% (USA) (JV with ArcelorMittal) (Mexico) (India) TENIGAL 49% (JV with Ternium) JCAPCPL (JV with TATA) 49% Investment Amount Approx. Approx. Approx. 1.55bn$ (total price) 300MM$ 40bn Major Facility Hot Strip, PLCL,CGL, etc CGL CAPL Production Capacity 5.3MMT/Y -Hot strip 0.4MMT/Y 0.6MMT/Y FY13 FY14 FY15 Feb/14 Aug/13 May/14 Approx. NSGT 100% CGL 300MM$ 0.36MMT/Y (Thailand) Oct/13 BNA Approx. 50% No4 CGL CGL capacity 0.42MMT/Y FY15 (China) (JV with Bao) 1.1 bn CNY (New line) ( MMT/Y) Start-up ICI 80% Approx. Approx. Forging press capacity No4 Forging 1.3MM ( MM (USA) New Forging Press Line Press Line FY15 g 46MM$ crankshaft/y Crankshaft/Y) Start-up (Singapore, etc.) (Vietnam) NSBS (JV with BSL) 50% CSVC 30% (JV with CSC) WINSteel 554MM$ CGL, etc CDCM 1.40MMT/Y -CGL 115bn CDCM 120MMT/Y 1.20MMT/Y (JV total) Mar/13 JV Established Apr/13 Container 50% Approx. ETL, etc 23bn 0.80MMT/Y (China) (JV with Wuhan) Sep/13 Pipe VSB 40% 54bn 5.4bn BRL Seamless 0.6MMT/Y Ramping up &Tube (Brazil) (JV with Vallourec) (VSB s capital) Pipe, etc -SML

22 Ⅳ. Pursuing Domestic Business Strategy Mid-term progress 22 Restructuring of production framework Facility close down schedule Products Works Action Equipment FY13 FY14 FY15 Up stream process No.3 BF Kimitsu Close No.5 CC Wakayama Suspend No.2 BF (Postpone opening of new BF) 1H 4Q Kashima Close No.2 CPL, No.1 Cold Strip Mill No.1 CAL, BAL No.1 CGL, No.2 EGL 4Q Wakayama Close No.3 PL, No.1 Cold Strip Mill, CGL, ACL 1Q Sheet No.4 CGL 1Q Done Nagoya Close EGL Kimitsu Close No.1 CAP Pipe & tube Kimitsu Close Butt welded pipe line 4Q 4Q 4Q

23 23 3. Reference

24 World Economic Outlook <Released on Apr. 3, 2014 by IMF> 24 ( ): Outlook as of Jan.21, outlook 2015 outlook World Total (3.0) 3.0 (3.7) 3.6 (3.9) 3.9 Developed Countries (1.3) 1.3 (2.2) 2.2 (2.3) 2.3 USA (1.9) 1.9 (2.8) 2.8 (3.0) 3.0 EU (-0.4) -0.5 (1.0) 1.2 (1.4) 1.5 Japan (1.7) 1.5 (1.7) 1.4 (1.0) 1.0 Developing Countries (4.7) 4.7 (5.1) 4.9 (5.4) 5.3 China (7.7) 7.7 (7.5) 7.5 (7.3) 7.3 India (4.4) 4.4 (5.4) 5.4 (6.4) 6.4 * 1 ASEAN (5.0) 5.2 (5.1) (5.6) Russia (1.5) 1.3 (2.0) 1.3 (2.5) 2.3 Brazil (2.3) (2.5) (2.8) * ASEAN 5 : Thailand, Malaysia, Indonesia, Philippines, Vietnam (Source : IMF)

25 Worldwide Steel Demand Trend Worldwide Total 1.38 <CY11> <CY12> 1.43 * <CY13> <CY14(E)> <CY15(E)> * bn tons 25 (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

26 World Crude Steel Production 26 (million tons CY13 CY14 Oct - Oct Nov Dec Dec Total Jan Feb Mar [A] Jan - Mar [B] Change (B-A) World Total * , (YoY) (+7.1%) (+5.0%) (+9.3%) (+7.1%) (+4.0%) (+5.0%) (+1.3%) (+5.8%) (+4.1%) Japan (YoY) (+7.8%) (+9.0%) (+9.0%) (+8.6%) (+3.1%) (+6.0%) (+1.5%) (+2.9%) (+3.5%) Korea (YoY) (+4.7%) (-0.3%) (+1.6%) (+2.0%) (-4.4%) (+1.9%) (+6.1%) (+8.1%) (+5.3%) USA EU Russia Brazil India China (YoY) (+10.1%) (+5.9%) (+12.8%) (+9.7%) (+8.7%) (+8.0%) (+0.4%) (+8.4%) (+5.7%) * 1 Total of 65 countries ( Source :World Steel Association)

27 Hot Rolled Sheets Prices by Region 27 ( 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 Apr USA Apr USA EU Bao Steel Prevailing Listprice 1.0 Japan 0.5 ( Source : The Japan Iron and Steel Federation )

28 Key Indicators of Demand 28 FY12 FY13 FY14 Change 1H 3Q 4Q 2H 1Q (E) 2Q (E) * 1 1H (E) 1H/13 vs. 2H/13 FY12 vs. FY13 2H/13 vs. 1H(E)/14 Housing Starts (million houses) Non-residential Construction Starts (million m³) Public Works Orders ( in billion) 6,802 4,042 1,923 1,749 3,673 7,715 1,580 1,982 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 1,854 (May 2, 2014) Deep well ( 15,000ft) (Mar., 2014) World total (Except N. America, Russia & China) 1, ,094 1,167 1,234 1,296 1,345 (Mar., 2014) (Source: Baker Hughes, Smith international, NSSMC est.) *1 Estimates as top of May, 2014

29 Domestic Steel Consumption by Industrial Sector 29 FY13 FY14 Change (Million tons) FY12 1H 3Q 4Q 2H 1Q (E) 2Q* 1 (E) 1H (E) 1H/13 vs. 2H/13 FY12 vs. FY13 2H/13 vs. 1H(E)/14 Crude Steel Production in Japan Domestic Steel Consumption (A + B) Manufacture s Share (%) Ordinary (A) Construction Manufacturing Shipbuilding Automotive ti Industrial Machine Electronic Machine Specialty (B) Steel Imports Steel Exports ( Source : NSSMC est.) *1 Estimates as top of May, 2014

30 Domestic Steel Consumption Trend Long Term 30 ( million tons) Consumption(Manufacturing Sector) Consumption(Construction and Civil Engineering Sector) 120 Crude Steel Production Crude Steel Production 122 Steel Exports Steel Exports Manufacturing Sector FY Y73 FY Y74 FY Y75 FY Y76 FY Y77 FY Y78 FY Y79 FY Y80 FY Y81 FY Y82 FY Y83 Construction and Civil Engineering Sector FY Y84 FY Y85 FY Y86 FY Y87 FY Y88 FY Y89 FY Y90 FY Y91 FY Y92 FY Y93 FY Y94 FY Y95 FY Y96 FY Y97 FY Y98 FY Y99 FY Y00 FY Y01 FY Y02 FY Y03 FY Y04 FY Y05 FY Y06 FY Y07 FY Y08 FY Y09 FY Y10 FY Y11 FY Y12 FY Y13 ( Source:JISF Steel Consumption/ NSSMC est.)

31 Domestic Crude Steel Production Trend 31 All Japan (million tons) (Domestic Crude Steel Production of 1Q (E), FY14 released by METI on May. 8, 2014) (million tons) FY FY FY FY FY FY FY (million tons) SMI * 1 (Left axis) FY14/1Q(E) 25.0 NSC * 2 (Left axis) All Japan (Right axis) Total Production of Crude Steel ( NSC (non-consolidated)+smi ) FY * 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) May 2 Cold-rolled sheets(1.0xs) May

33 Domestic Steel Inventory Trends 33 (MMT) Rolled Sheets Inventory * 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 * 2 H-flange beams Inventory 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 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

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 Freight (US$/WMT, Cape size 170 thousand tons hull form) 35 From Brazil From Western Australia 30 Mold Pig Iron (US$/T,CIF Korea) 600 Mold Pig Iron(US$/t,CIF Korea)

37 FOREX Trend 37 ( /$) Apr. 1, 2008 Latest (Won /$) /$ 1, won/$ May 6, /$ 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.