Financial Results Briefing...Everywhere, MARUICHI 1 Financial Results Briefing For the Year Ended March 31, 2020 Chairman & CEO Hiroyuki Suzuki I. Consolidated Financial Highlights

Everywhere, MARUICHI 1

Financial Results BriefingFor the Year Ended March 31, 2020

Chairman & CEO Hiroyuki Suzuki

I. Consolidated Financial Highlights for the Year Ended March 31, 2020 ・・・P. 2

II. Nonconsolidated Financial Highlights for the Year Ended March 31, 2020 ・・・P. 14

III. Performance Forecasts for the Year Ending March 31, 2021 ・・・P. 24

IV. Progress of the ‘Fifth Medium-Term Management Plan’ ・・・P. 30

(Reference) Overview and Trends in Business Performance of Overseas Group Companies ・・・P. 58

(Reference) Features of the Maruichi Group ・・・P. 69

May 13, 2020


I. Consolidated Financial Highlights

for the Year Ended March 31, 2020


Consolidated Operating Results Net Sales (Millions of yen)

144,968

137,277

156,266

167,437

154,926

FY2016 FY2017 FY2018 FY2019 FY2020

Net sales (Millions of yen)

17,027

24,502

20,826

19,266

14,712

18,944

26,192

22,986

21,634

17,104

11,184

17,715

15,777

14,253

6,354

FY2016 FY2017 FY2018 FY2019 FY2020

Profits (Millions of yen)

Operating income Ordinary income Net income attributable to owners of parent

FY2019

Results

FY2020

Results

Increase/

decrease

Forecasts announced

in February

Increase/

decrease

Net sales 167,437 154,926 -7.5% 154,300 +0.4%

Operating income 19,266 14,712 -23.6% 14,300 +2.9%

Ordinary income 21,634 17,104 -20.9% 16,800 +1.8%Net income attributable to

owners of parent 14,253 6,354 -55.4% 9,900 -35.8%

(Millions of yen)


Consolidated Operating Results Statements of Income

(Millions of yen)

AmountPercentage of

total (%)Amount

Percentage of

total (%)Amount

Percentage of

total (%)Amount

Percentage of

total (%)Amount

Percentage of

total (%)

Net sales 144,968 100.0 137,277 100.0 156,266 100.0 167,437 100.0 154,926 100.0

Cost of sales 114,973 79.3 100,152 73.0 122,304 78.3 134,481 80.3 126,568 81.7

Gross profit 29,994 20.7 37,124 27.0 33,962 21.7 32,956 19.7 28,357 18.3

Selling, general and administrative

expenses12,967 8.9 12,622 9.2 13,135 8.4 13,689 8.2 13,644 8.8

Operating income 17,027 11.7 24,502 17.8 20,826 13.3 19,266 11.5 14,712 9.5

Non-operating income 2,932 2.0 2,670 1.9 2,933 1.9 3,296 2.0 3,153 2.0

Non-operating expenses 1,015 0.7 981 0.7 774 0.5 928 0.6 760 0.5

Ordinary income 18,944 13.1 26,192 19.1 22,986 14.7 21,634 12.9 17,104 11.0

Extraordinary income 1,872 1.3 329 0.2 299 0.2 573 0.3 816 0.5

Extraordinary losses 2,844 2.0 398 0.3 33 0.0 990 0.6 7,860 5.1

Income before income taxes 18,052 12.5 26,123 19.0 23,251 14.9 21,217 12.7 10,061 6.5

Income taxes 7,457 5.1 7,302 5.3 6,966 4.5 6,309 3.8 4,557 2.9

Net income attributable to non-controlling

interests-589 -0.4 1,106 0.8 507 0.3 654 0.4 -850 -0.5

Net income attributable to owners of

parent11,184 7.7 17,715 12.9 15,777 10.1 14,253 8.5 6,354 4.1

FY2019 FY2020FY2018FY2016 FY2017


The Year Ended March 31, 2020Consolidated P/L results: Factors for changes from FY2019

Net sales Increase/decrease

Factors attributable to the Company ¥-2.88 billion

MAC ¥-2.32 billion

MKK USA INC. ¥-2.88 billion

MOST ¥-1.43 billion

MMX ¥+0.33 billion

SUNSCO (including Hanoi) ¥-2.75 billion

KUMA ¥-0.82 billion

Alpha Metal ¥-0.71 billion

Other domestic subsidiaries ¥-5.40 billion

Increase/decrease in consolidated elimination and reclassification ¥+6.36 billion

Operating income Increase/decrease

Factors attributable to the Company ¥+0.55 billion

MAC ¥-1.63 billion

MKK USA INC. ¥-1.67 billion

(Interest income, dividends) 1.51 1.48 -0.03 MOST ¥-0.89 billion

(Equity in earnings of affiliated companies, etc.) 0.67 0.44 -0.23 MMX ¥-0.02 billion

(Other non-operating income) 1.11 1.24 +0.12 SUNSCO (including Hanoi) ¥-0.08 billion

(Interest expense) 0.26 0.30 -0.04 KUMA ¥-0.42 billion

(Exchange loss, net) 0.25 0.12 +0.13 Alpha Metal ¥-0.09 billion

(Expenses of real estate rent) 0.28 0.27 +0.01 Other domestic subsidiaries ¥-0.71 billion

(Other non-operating expenses) 0.14 0.07 +0.07 Increase/decrease in consolidated elimination and reclassification ¥+0.40 billion

Ordinary income 21.63 17.10 -4.53 -20.9%

(Gains on sales of property, plant and equipment) 0.16 0.45 +0.29 Ordinary income Increase/decrease

(Gains on sales of investment securities) 0.06 0.26 +0.20 Factors attributable to the Company ¥+0.31 billion

(Other extraordinary income) 0.36 0.11 -0.25 MAC ¥-1.60 billion

(Impairment loss) 0.00 3.34 -3.34 MKK USA INC. ¥-1.74 billion(Loss on disposal of property, plant and equipment, etc.) 0.05 0.16 -0.11 MOST ¥-0.82 billion(Loss on sales/valuation of investment securities) 0.58 4.26 -3.68 MMX ¥-0.05 billion

(Other extraordinary losses) 0.36 0.11 +0.25 SUNSCO (including Hanoi) ¥-0.12 billion

Income before income taxes 21.22 10.06 -11.16 -52.6% KUMA ¥-0.30 billion

(Income taxes) 6.31 4.56 +1.75 Alpha Metal ¥-0.06 billion

(Net income) 14.91 5.50 -9.40 Profits in other domestic subsidiaries ¥-0.70 billion

(Net income attributable to non-controlling interests) 0.65 -0.85 +1.51 Affiliated companies accounted for by the equity method ¥-0.23 billion

Net income attributable to owners of parent 14.25 6.35 -7.90 -55.4% Increase/decrease in consolidated elimination and reclassification ¥+0.80 billion

-23.6%

Net sales 167.44 154.93 -12.51 -7.5%

Operating income 19.27 14.71 -4.55

(Billions of yen)

FY2020

Previous Year Current YearIncrease/

decrease

Percentage

increase/decrease

Everywhere, MARUICHI

Consolidated Statements of IncomeYear-on-year Comparison of Factors Contributing to Changes

1. Net sales 154,926 million yena. -12,510 million yen, -7.5% year-on-year

b. In North America, sales volume and

product prices decreased

c. In Asia, sales volume for SUNSCO

decreased, unit selling prices dropped

in Hanoi, and sales volume for KUMA

decreased

2. Operating income 14,712 million yena. -4,550 million yen, -23.6% year-on-year

b. Spread reduced due to time required for

material costs to decrease, as a result

of the drop in product prices caused by

the rapid fall in prices of steel materials

outpacing the drop in material costs,

and the increase in volume of high-

priced inventory due to the decline in

sales volume

c. For MOST, sales to Canada suddenly

declined

d. In Asia, SUNSCO HCM had low spread

with competitive environment; heavy

depreciation burden of US$13

million/year

3. Ordinary income 17,104 million yena. -4,530 million yen, -20.9% year-on-year

b. For non-operating income, equity in

earnings of affiliated companies, etc.,

and dividend income declined

c. For non-operating expenses, exchange

loss decreased

4. Net income attributable to owners of parent

6,354 million yen

a. -7,900 million yen, -55.4% year-on-year

b. Extraordinary income increased by 490

million yen, due mainly to gain on sales

of Osaka Sales Office by Maruichi

Kohan and gain on sales of shares in

domestic operating companies

c. Extraordinary losses increased by

-6,870 million yen, due mainly to

equipment impairment for SUNSCO

and losses on valuation/losses on sales

on blast furnace and other shares, etc.

6


Statements of IncomeMajor factors for changes from forecastsannounced in FebruaryConsolidated Operating Results

(Billions of yen)

Net sales Forecast Result Amount of impact

Factors attributable to Maruichi ¥97.70 billion ¥97.66 billion ¥(0.04) billion

MAC ¥7.34 billion ¥7.37 billion ¥0.03 billion

MKK USA INC. ¥11.55 billion ¥11.77 billion ¥0.22 billion

MOST ¥4.58 billion ¥4.60 billion ¥0.02 billion

MMX ¥2.59 billion ¥2.60 billion ¥0.01 billion

SUNSCO (including Hanoi) ¥22.56 billion ¥22.65 billion ¥0.09 billion

KUMA ¥5.46 billion ¥5.58 billion ¥0.12 billion

Alpha Metal ¥4.72 billion ¥4.64 billion ¥(0.09) billion

Other domestic subsidiaries ¥83.75 billion ¥82.51 billion ¥(1.24) billion

Consolidated adjustments ¥(85.95) billion ¥(84.45) billion ¥1.51 billion

Operating income Forecast Result Amount of impact

Factors attributable to Maruichi ¥14.10 billion ¥14.47 billion ¥0.37 billion

MAC ¥(0.53) billion ¥(0.56) billion ¥(0.04) billion

MKK USA INC. ¥(0.68) billion ¥(0.56) billion ¥0.12 billion

MOST ¥(0.81) billion ¥(0.69) billion ¥0.13 billion

MMX ¥0.43 billion ¥0.41 billion ¥(0.02) billion

SUNSCO (including Hanoi) ¥0.06 billion ¥0.05 billion ¥(0.01) billion

KUMA ¥0.32 billion ¥0.28 billion ¥(0.04) billion

Alpha Metal ¥(0.02) billion ¥(0.03) billion ¥(0.01) billion


Goodwill ¥0.00 billion ¥0.00 billion ¥0.00 billion

Consolidated adjustments ¥0.34 billion ¥0.38 billion ¥0.04 billion

Ordinary income Forecast Result Amount of impact

Factors attributable to Maruichi ¥17.50 billion ¥17.91 billion ¥0.41 billion

MAC ¥(0.40) billion ¥(0.44) billion ¥(0.04) billion



MMX ¥0.42 billion ¥0.39 billion ¥(0.03) billion

SUNSCO (including Hanoi) ¥0.13 billion ¥0.12 billion ¥(0.01) billion




Affiliated companies accounted for by the equity

method¥0.44 billion ¥0.44 billion ¥(0.00) billion

Consolidated adjustments ¥(1.61) billion ¥(1.62) billion ¥(0.01) billion

Net income attributable to owners of parent Forecast Result Amount of impact

Factors attributable to Maruichi ¥11.00 billion ¥6.75 billion ¥(4.25) billion

MAC ¥(0.40) billion ¥(0.32) billion ¥0.08 billion



MMX ¥0.26 billion ¥0.26 billion ¥0.00 billion

SUNSCO (including Hanoi) ¥0.09 billion ¥(3.25) billion ¥(3.34) billion




Consolidated adjustments ¥(1.17) billion ¥2.68 billion ¥3.85 billion

Ordinary income 16.80 17.10 +0.30

Net income

attributable to owners

of parent

9.90 6.35 -3.55

154.30 154.93 +0.63

Operating income 14.30 14.71 +0.41

Net sales

FY2020

Forecasts announced

in February Results Change


Results Change Results Change Results Change Results Change

Maruichi Steel

Tube97.70 14.10 17.50 11.00 97.66 -0.04 14.47 0.37 17.91 0.41 6.75 -4.25

MAC 7.34 -0.53 -0.40 -0.40 7.37 0.03 -0.56 -0.04 -0.44 -0.04 -0.32 0.08

MKK USA INC. 11.55 -0.68 -0.69 -0.65 11.77 0.22 -0.56 0.12 -0.61 0.08 -0.55 0.09

MOST 4.58 -0.81 -0.77 -0.77 4.60 0.02 -0.69 0.13 -0.64 0.13 -0.64 0.13

MMX 2.59 0.43 0.42 0.26 2.60 0.01 0.41 -0.02 0.39 -0.03 0.26 0.00

SUNSCO

(including Hanoi)22.56 0.06 0.13 0.09 22.65 0.09 0.05 -0.01 0.12 -0.01 -3.25 -3.34

KUMA 5.46 0.32 0.34 0.25 5.58 0.12 0.28 -0.04 0.27 -0.08 0.23 -0.02

Alpha Metal 4.72 -0.02 0.04 0.03 4.64 -0.09 -0.03 -0.01 0.03 -0.01 0.02 -0.01

Other domestic

subsidiaries83.75 1.08 1.40 1.27 82.51 -1.24 0.96 -0.13 1.27 -0.13 1.20 -0.07

Af f iliated companies

accounted f or by the

equity method- - 0.44 - 0.44 -0.00

Goodwill - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Consolidated

adjustments-85.95 0.34 -1.61 -1.17 -84.45 1.51 0.38 0.04 -1.62 -0.01 2.68 3.85

Total 154.30 14.30 16.80 9.90 154.93 0.63 14.71 0.41 17.10 0.30 6.35 -3.55

Forecasts announced in Feb. 2020

-

(Billions of yen)

Results for FY2020

Net sales Operating income Ordinary incomeNet income attributable

to owners of parent

- -

Net

sales

Operating

income

Ordinary

income

Net income

attributable

to owners of

parent

-

Consolidated Operating Results Differences between forecasts announced in

February and actual results of major companies


1. Net salesa. +630 million yen, +0.4%

compared to forecasts

b. Mainly due to settlement and

consolidation adjustments

2. Operating incomea. +410 million yen, +2.9%


b. Non-consolidated profit increase

c. MKK USA INC. and MOST

expected a loss on valuation of

inventory at the end of the fiscal

year, but there was no impairment

due to stable steel market prices

in the fourth quarter, and it turned

into a positive factor

3. Ordinary income

a. +300 million yen, +1.8%


b. Same factors for operating income

4. Net income attributable to owners of

parent

a. -3,550 million yen, -35.8%


b. Non-consolidated loss on valuation of

investment securities increased

c. SUNSCO had equipment impairment

9

Consolidated Statements of IncomeComparison of Factors Contributing to Changes with Forecasts Announced in February


Net sales ShareOperating

incomeShare Net sales Share

Operating

incomeShare

Japan 104,694 62.5% 15,768 81.8% 101,407 65.5% 15,528 105.5%

North America 32,504 19.4% 2,553 13.3% 26,066 16.8% -1,527 -10.4%

Asia 31,095 18.6% 699 3.6% 27,666 17.9% 476 3.2%

Reconciliations -855 -0.5% 246 1.3% -212 -0.1% 235 1.6%

Total 167,438 100.0% 19,266 100.0% 154,926 100.0% 14,713 100.0%

(Millions of yen)

FY2019 FY2020

Consolidated Business Results by Segment (Including internal sales & transfers)


(Billions of yen)

Previous

Year

Current

YearChange

Current assets 165.7 169.4 +3.72

(Cash and bank deposits) 60.8 83.8 +23.06(Trade notes and accounts

receivable)36.8 33.7 -3.11

(Inventories) 33.2 27.9 -5.38

(Others) 34.9 24.0 -10.85

Long-term assets 155.4 140.7 -14.62

(Property, plant and equipment) 79.4 76.0 -3.39

(Intangible assets) 1.6 1.3 -0.34

(Investments and other assets) 74.4 63.5 -10.89

Total assets 321.0 310.1 -10.90

Current liabilities 36.6 36.3 -0.33

(Trade notes and accounts

payable)19.1 22.3 +3.21

(Short-term bank loans) 8.8 5.5 -3.30

(Accrued income taxes) 2.7 1.6 -1.10

(Others) 6.0 6.9 +0.86

Long-term liabilities 9.5 6.5 -2.91

Total liabilities 46.1 42.8 -3.25

Net assets 274.9 267.3 -7.65

(Common stock) 9.6 9.6 +0.00

(Additional paid-in capital) 15.9 15.9 +0.01

(Retained earnings) 256.1 255.0 -1.02

(Treasury stock) -27.0 -27.0 +0.04

(Unrealized holding gains on

available-for-sale securities)11.0 6.1 -4.89

(Foreign currency translation

adjustments)-1.5 -2.4 -0.87

(Remeasurements of defined

benefit plans)-0.1 0.0 +0.09

(Stock options) 0.2 0.2 +0.00

(Non-controlling interests) 10.8 9.8 -1.01

Total liabilities and net assets 321.0 310.1 -10.90

FY2020

Balance Sheets compared with

the previous fiscal yearConsolidated Operating Results

Cash and bank deposits Japan ¥+21.70 billion Overseas ¥+1.05 billionConsolidated

adjustments¥+0.31 billion

Trade notes and

accounts receivableJapan ¥-8.79 billion Overseas ¥-0.32 billion

Consolidated


Inventories Japan ¥+1.16 billion Overseas ¥-5.80 billionConsolidated

adjustments¥-0.75 billion

OthersSubsidiary

NCD¥-9.28 billion Others ¥-1.86 billion

Consolidated


Maruichi ¥-0.35 billionDomestic

subsidiaries¥+0.98 billion MOST ¥-0.22 billion

MAC ¥-0.29 billionMKK USA

INC.¥-0.33 billion SUNSCO ¥-4.52 billion

KUMA ¥+0.07 billion MMX ¥-0.05 billionConsolidated


Intangible assets Maruichi ¥+0.12 billion Subsidiaries ¥-0.45 billionConsolidated


Trade notes and

accounts payableJapan ¥-0.85 billion Overseas ¥-1.78 billion

Consolidated


Alpha Metal ¥-0.07 billion SUNSCO ¥-2.13 billionMKK USA

INC.¥-0.94 billion

KUMA ¥-0.20 billion MMX ¥-0.16 billionConsolidated


Accrued income taxes Maruichi ¥-0.93 billion Subsidiaries ¥-0.17 billionConsolidated


Others Maruichi ¥+0.70 billion Subsidiaries ¥-0.22 billionConsolidated


Maruichi ¥-2.26 billionDomestic

subsidiaries¥+0.20 billion

Consolidated


SUNSCO ¥-0.62 billion KUMA ¥-0.09 billionMKK USA

INC.¥-0.00 billion

MMX ¥+0.00 billion MAC ¥-0.13 billion MOST ¥+0.00 billion

Retained earnings Japan ¥-0.24 billion Overseas ¥-5.11 billionConsolidated


Unrealized holding

gains on available-for-

sale securities

Maruichi ¥-4.80 billion Subsidiaries ¥-0.00 billionConsolidated


Foreign currency

translation adjustments

Non-controlling interests ¥-0.06 billionConsolidated


OthersConsolidated


Increase/decrease

MKK USA INC.

¥+1.01 billion

¥-4.89 billion

¥-0.87 billion

¥-1.01 billion

¥+0.13 billion

Increase/decreaseFactors for increases/decreases of net assets

Long-term liabilities

End of December 2018: ¥111.00/US$　→　End of December 2019:　¥109.56/US$

¥-2.91 billion

¥-1.02 billion

¥+3.21 billion

¥-1.10 billion

¥+0.86 billion

Increase/decrease

¥-3.30 billion

¥-0.03 billion

Factors for increases/decreases of current assets

Factors for increases/decreases of long-term assets

Factors for increases/decreases of current liabilities

Factors for increases/decreases of long-term liabilities

Short-term bank loans

Property, plant and

equipment

Investments and other

assetsJapan ¥-12.60 billion Overseas

Increase/decrease

Consolidated

adjustments¥+1.73 billion ¥-10.89 billion

Increase/decrease

¥+23.06 billion

¥-3.11 billion

¥-5.38 billion

¥-10.85 billion

¥-3.39 billion

¥-0.34 billion


6.25.8

5.6 5.7

6.3

7.2

6.76.3 6.4

6.26.4

7.2

0.0

5.0

10.0

FY2016 FY2017 FY2018 FY2019 FY2020 FY2021forecasts

Capital investment Depreciation

12

4.7

3.6

2.53.6

(Billions of yen)

Consolidated Operating ResultsCapital investment and

depreciation

Bu

dge

t for 1

H

Bu

dge

t for 1

H

Bu

dge

t for 2

H

Bu

dge

t for 2

H


621 631 631 633 610 623 597 627

372 376 376 395 386 385 384 381

949 948 948 939934

976 970982

1,942 1,955 1,955 1,9671,930

1,9841,951

1,990

0

500

1,000

1,500

2,000

Sep. 2016 Mar. 2017 Sep.2017 Mar. 2018 Sep. 2018 Mar. 2019 Sep.2019 Mar. 202013

(37) (34) (37) (31) (30) (32) (29) (29)

Employees

Figures in parentheses indicate employees temporarily transferred overseas

Everywhere, MARUICHI14

II. Nonconsolidated Financial

Highlights for the Year Ended

March 31, 2020


Nonconsolidated Operating Results

89,615

87,518

95,601

100,540

97,657

FY2016 FY2017 FY2018 FY2019 FY2020

Net sales (Millions of yen)

15,968

17,556

15,523

13,91914,467

18,936

20,06319,200

17,600 17,906

5,049

14,091 13,827

12,074

6,745

FY2016 FY2017 FY2018 FY2019 FY2020

Profits (Millions of yen)

Operating income Ordinary income Net income

(Millions of yen)

FY2019

Results

FY2020

Results

Increase/

decrease

Forecasts

announced in

February

Increase/

decrease

Net Sales 100,540 97,657 -2.9% 97,700 -0.0%

Operating Income 13,919 14,467 +3.9% 14,100 +2.6%

Ordinary Income 17,600 17,906 +1.7% 17,500 +2.3%

Net Income 12,074 6,745 -44.1% 11,000 -38.7%


AmountPercentage

of total (%)Amount

Percentage

of total (%)Amount

Percentage

of total (%)Amount

Percentage

of total (%)Amount

Percentage

of total (%)

Net sales 89,615 100.0 87,518 100.0 95,601 100.0 100,540 100.0 97,657 100.0

Cost of sales 67,193 75.0 63,589 72.7 73,616 77.0 79,892 79.5 76,243 78.1

Gross profit 22,422 25.0 23,928 27.3 21,985 23.0 20,647 20.5 21,414 21.9

Selling, general and

administrative expenses6,453 7.2 6,371 7.3 6,461 6.8 6,727 6.7 6,946 7.1

Operating income 15,968 17.8 17,556 20.1 15,523 16.2 13,919 13.8 14,467 14.8

Non-operating income 3,463 3.9 3,088 3.5 4,140 4.3 4,143 4.1 3,850 3.9

Non-operating expenses 494 0.6 582 0.7 463 0.5 462 0.5 412 0.4

Ordinary income 18,936 21.1 20,063 22.9 19,200 20.1 17,600 17.5 17,906 18.3

Extraordinary income 1,944 2.2 195 0.2 298 0.3 308 0.3 314 0.3

Extraordinary losses 9,212 10.3 368 0.4 28 0.0 853 0.8 7,540 7.7

Income before income taxes 11,669 13.0 19,890 22.7 19,470 20.4 17,055 17.0 10,679 10.9

Income taxes 6,833 7.6 5,888 6.7 5,618 5.9 5,141 5.1 4,029 4.1

Income taxes - deferred -213 -0.2 -89 -0.1 24 0.0 -159 -0.2 -94 -0.1

Net income 5,049 5.6 14,091 16.1 13,827 14.5 12,074 12.0 6,745 6.9

FY2019 FY2020

(Millions of yen)

FY2018FY2016 FY2017

Nonconsolidated Operating Results Statements of Income


Nonconsolidated Operating ResultsStatements of Income

Major factors for changes from FY2019

Previous Year Current YearIncrease/

decrease

Percentage

increase/

decrease

Net sales 100.54 97.66 -2.88 -2.9%Operating income 13.92 14.47 +0.55 +3.9%(Dividend income, interest from

bonds, etc.) 2.72 2.49 -0.23

(House rent income) 0.74 0.77 +0.03(Royalty income) 0.43 0.40 -0.04(Other non-operating income) 0.25 0.20 -0.05(Rent expenses) 0.38 0.38 -0.00(Other non-operating expenses) 0.08 0.03 -0.05

(Gains on sales of investment

securities) 0.06 0.26 +0.20

(Gains on sales of property,

plant and equipment) 0.00 0.00 -0.00

(Other extraordinary income) 0.25 0.06 -0.19(Loss on sales of securities) 0.00 0.39 +0.39(Loss on valuation of securities) 0.58 6.96 +6.38(Costs of disposal and removal

of property, plant and

equipment, etc.)0.04 0.14 +0.10

(Other extraordinary loss) 0.23 0.05 -0.18

(Income taxes) 4.98 3.93 -1.05(Income taxes–deferred) 0.00 0.00 +0.00

(Billions of yen)

FY2020

Ordinary income 17.60 17.91 +0.31 +1.7%

Income before income taxes 17.06 10.68 -6.38 -37.4%

Net income 12.07 6.75 -5.33 -44.1%

Increase/decrease

¥-3.87 billion

¥+1.62 billion

¥-0.11 billion

¥-0.02 billion

¥-0.32 billion

¥-0.04 billion

¥+0.48 billion

¥+0.82 billion

¥-1.44 billion

Increase/ decrease

¥-0.66 billion

¥+1.88 billion

¥+1.62 billion

¥-0.13 billion

¥-0.54 billion

Increase/ decrease

¥+0.55 billion

¥-0.23 billion

¥-0.06 billion

¥+0.05 billion

Increase/ decrease

¥+0.31 billion

¥+0.20 billion

¥-0.00 billion

¥-0.39 billion

¥-6.38 billion

¥-0.10 billion

¥-0.01 billion

Increase/ decrease

¥-6.38 billion

¥+1.05 billion¥+0.00 billionIncome taxes-deferred

Net sales

Non-operating expenses

From ordinary income

Gains on sales of investment securities

Gains on sales of property, plant and equipment

Others

Domestic pipe sales volume

Domestic pipe unit selling price

Export pipe sales volume

Export pipe unit selling price

Steel strip sales volume

Loss on valuation of investment securities

Costs of disposal and removal of property, plant and equipment, etc.

Net income

Loss on sales of investment securities

From income before income taxes

Income taxes

Income before income taxes

Steel strip unit selling price

Pole Division

Related steel strip

Machinery, others

Factors attributable to company-wide sales volume

Factors attributable to company-wide unit selling price

Cost of sales

Selling, general and administrative expenses

From operating income

Dividend income, interest on securities, etc.

Other non-operating income

(Factors attributable to domestic pipe unit selling price)

Operating income

Ordinary income


1. Net sales 97,657 million yena. -2,880 million yen, -2.9% year-on-yearb. Company-wide sales volume: 820

thousand tons-40.8 thousand tons, -4.3% year-on-year

c. Sales revenue decreased -4,760 million yen due to decrease in sales volume

d. Mainly due to a decrease in demand for building materials as a result of the decrease in demand for the Olympics in 2H, and a decrease in automobile sales volume

e. +2.0% in company-wide unit selling pricef. Sales revenue increased by 1,880

million yen, due to the increase in unit selling prices

2. Operating income 14,467 million yena. +550 million yen, +3.9% year-on-yearb. Spread improved due to product price

increase in the 2H of the previous year, and decline in import coil prices in the current year

c. Minimized the drop in prices resulting from decreases in sales volume in 2H

d. +10.5% in shipment expenses

3. Ordinary income 17,906 million yena. +310 million yen, +1.7% year-on-yearb. Breakdown of dividend reduction:

-70 million yen for domestic operating companies, -150 million yen for overseas operating companies and affiliates

c. -40 million yen in royalties due to decrease in sales volume at overseas affiliates

4. Extraordinary incomea. +200 million yen in gain on sales of

shares in domestic operating companies and others

5. Extraordinary lossesa. -390 million yen in loss on sales of

shares in Kobe Steel, Ltd. and othersb. -3,370 million yen in losses on valuation

of shares, mainly for blast furnacesc. ¥-3,090 million yen in loss on valuation

of shares of SUNSCO

6. Net income ¥6,745 milliona. -5,330 million yen, -44.1% year-on-year

18

Nonconsolidated Statements of IncomeYear-on-year Comparison of Factors Contributing to Changes


Nonconsolidated Operating ResultsStatements of IncomeMajor factors for changes from forecastsannounced in February

(Billions of yen)

Increase/decrease

¥-0.54 billion

¥+0.32 billion

¥+0.03 billion

¥+0.01 billion

¥+0.04 billion

¥-0.01 billion

¥+0.12 billion

¥+0.03 billion

¥-0.04 billion

Increase/decrease

Factors attributable to company-wide sales volume ¥-0.07 billionFactors attributable to company-wide unit selling price ¥+0.47 billion

¥-0.18 billion

¥+0.15 billion

Increase/decrease

¥+0.37 billion

¥+0.03 billion

¥+0.01 billion

¥-0.00 billion

Increase/decrease

¥+0.41 billion

Gains on sales of investment securities ¥+0.05 billion

Gains on sales of property, plant and equipment ¥+0.00 billion

Loss on sales of investment securities ¥-0.39 billion

Loss on valuation of investment securities ¥-5.16 billion

Costs of disposal and removal of property, plant and equipment, etc. ¥-0.09 billion

¥+0.02 billion

Increase/decrease

From income before income taxes ¥-5.16 billion

¥+0.91 billion

¥+0.00 billion

Net income

Income before

income taxes15.84 10.68 -5.16 -32.6%

Net income 11.00 6.75 -4.25 -38.7%

Others

Income taxes

Income taxes-deferred

Net sales

From ordinary income

Operating income 14.10 14.47 +0.37 +2.6%

Ordinary income

Ordinary income 17.50 17.91 +0.41 +2.3%Income before income taxes

From operating income

Dividend income, interest on securities, etc.

Net sales 97.70 97.66 -0.04 -0.0%

FY2020

Forecasts

announced in

February

Results ChangePercentage

increase/

decrease

Non-operating expenses

Cost of sales

Selling, general and administrative expenses

Domestic pipe sales volume

Domestic pipe unit selling price

Export pipe sales volume

Export pipe unit selling price

Steel strip sales volume

Steel strip unit selling price

Pole Division

Related steel strip

Machinery, others

Operating income

Other non-operating income


1. Net salesa. -40 million yen, -0.0% compared to

forecastsb. Company-wide sales volume:

-4.3 thousand tons, -0.5%c. Sales revenue decreased -510 million

yen due to decrease in sales volumed. +0.5% in company-wide unit selling

pricee. Sales revenue increased by ¥470

million, due to the increase in unit selling prices

f. +¥120 million for Pole Division

2. Operating incomea. +370 million yen, +2.6% compared to

forecasts

b. Although unit selling prices were

expected to decline in line with the

forecast for declining sales volume, the

results exceeded the forecast as a

result of focused efforts on maintaining

prices.

3. Ordinary incomea. +410 million yen, +2.3% compared to

forecasts

b. +30 million yen compared to dividend

forecasts

4. Net incomea. -4,250 million yen, -38.7% compared

to forecastsb. +50 million yen in gain on sales of

shares in domestic operating companies and others

c. -390 million yen in losses on sales of shares in Kobe Steel, Ltd. and others

d. -2,070 million yen in losses on valuation of shares, mainly for blast furnaces

e. -3,090 million yen in losses on valuation of shares of SUNSCO

20

Nonconsolidated Statements of IncomeComparison of Factors Contributing to Changes with Forecasts Announced in February


Nonconsolidated Operating ResultsBalance Sheets compared with

the previous fiscal year

Current assetsCash and bank deposits ¥+11.22 billion

Income before income

taxes ¥+10.68 billion Depreciation ¥+2.64 billionLosses on valuation of

investment securities ¥+6.96 billionShort-term loans

receivable ¥-0.40 billion

Stock-related ¥+1.15 billion Bond-related ¥+3.72 billion Operating funds ¥+5.04 billionInvestment trust

related ¥-4.10 billion

Dividends and taxes

paid¥-12.28 billion Capital investments ¥-2.55 billion

Investments in

aff iliated companies ¥-0.68 billion Others ¥+1.04 billion

Accounts receivable ¥-7.28 billion

Trade notes receivable/

Electronically recorded

monetary claims

¥-0.13 billion Trade accounts ¥-7.14 billion

Inventories ¥+1.00 billion

Finished goods ¥+0.56 billion Raw materials ¥+0.30 billionSupplies and

others¥+0.13 billion

Others ¥-1.74 billion

NCD ¥+0.00 billion Others ¥-1.74 billion

Long-term assetsProperty, plant and

equipment, intangible

assets

¥-0.23 billion

New investments ¥+2.41 billion Depreciation ¥-2.64 billion

¥-12.52 billion

¥-6.98 billion Stock-related ¥-0.48 billion Bond-related ¥-2.64 billion

¥-6.96 billionInvestment-trust-

related¥+4.10 billion Others ¥+0.43 billion

Current liabilities

Trade notes and

accounts payable¥-1.68 billion

Electronically recorded

monetary claims payable ¥-0.50 billionTrade accounts

payable¥-1.19 billion

Others ¥+0.70 billion

¥+0.37 billion Others ¥+0.33 billion

Long-term liabilities

Long-term liabilities ¥-2.26 billion

¥+0.01 billion ¥-2.28 billion Others ¥+0.00 billion

Net assets

Retained earnings ¥-0.63 billion

Net income ¥+6.75 billion Dividends ¥-4.06 billion Interim dividends ¥-3.31 billion

¥-4.80 billion

Bonds/

investment trusts¥-0.40 billion Listed stock ¥-3.25 billion

Listed stock

(overseas)¥-1.15 billion

Long-term deferred tax liabilities

Unrealized holding gains on available-for-

sale securities

Investments and other assets

Valuation difference on investment

securities

Loss on valuation of investment securities

Equipment accounts payable-other/notes

payable

Accrued retirement benefits

(Billions of yen)

Current assets 108.02 111.22 +3.20

(Cash and bank deposits) 51.92 63.14 +11.22(Trade notes and accounts

receivable)36.00 28.72 -7.28

(Inventories) 11.21 12.21 +1.00

(Others) 8.90 7.16 -1.74

Long-term assets 134.10 121.35 -12.75

(Property, plant and

equipment)43.42 43.06 -0.35

(Intangible assets) 0.22 0.34 +0.12

(Investments and other

assets)90.47 77.95 -12.52

Total assets 242.12 232.57 -9.55

Current liabilities 22.28 20.37 -1.91

(Trade notes and accounts

payable)16.62 14.93 -1.68

(Accrued income taxes) 2.35 1.43 -0.93

(Others) 3.31 4.01 +0.70

Long-term liabilities 5.71 3.45 -2.26

Total liabilities 27.99 23.82 -4.17

Net assets 214.13 208.75 -5.38

(Common stock) 9.60 9.60 +0.00

(Additional paid-in capital) 14.73 14.74 +0.01

(Retained earnings) 206.36 205.73 -0.63

(Treasury stock) -27.05 -27.01 +0.04

(Unrealized holding gains on

available-for-sale securities)10.30 5.51 -4.80

(Stock options) 0.19 0.19 +0.00

Total liabilities and net assets 242.12 232.57 -9.55

FY2020

Previous

Year

Current

YearChange


189.2201.5

210.0 214.1 208.7

0.0

0.00.0

0.00.0

12.6

12.713.4 11.4

9.013.6

12.8

15.5 16.614.9215.4

227.0

238.9 242.1

232.6

0.0

50.0

100.0

150.0

200.0

250.0

FY2016 FY2017 FY2018 FY2019 FY2020

Liabilities and net assets

22

(inclu

din

g tre

asu

ry s

tock

)

(inclu

din

g tre

asu

ry s

tock

)

(inclu

din

g tre

asu

ry s

tock

)

(inclu

din

g tre

asu

ry s

tock

)

(inclu

din

g tre

asu

ry s

tock

)

20.5 20.5 27.1 27.1 27.1

Nonconsolidated Operating Results Changes in balance sheets

(Billions of yen)

6.6 5.4 7.0 5.9 5.6

44.0 44.6 44.0 43.4 43.1

26.3 27.0 27.0 28.2 25.8

50.658.3

66.9 65.5

54.1

9.18.9

10.0 11.2

12.2

26.528.0

34.2 36.0

28.7

52.3

54.8

49.8 51.9

63.1

215.4

227.0

238.9 242.1

232.6

0.0

50.0

100.0

150.0

200.0

250.0

FY2016 FY2017 FY2018 FY2019 FY2020

Assets


2.4

3.2

2.6

2.2

2.5

1.5

2.42.5 2.5

2.6 2.6

2.4

0.0

1.0

2.0

3.0

4.0

FY2016 FY2017 FY2018 FY2019 FY2020 FY2021forecasts

Capital investments Depreciation

23

1.2

1.2

1.2

0.3

Bu

dge

t for 1

H

Bu

dge

t for 1

H

Bu

dge

t for 2

H

Bu

dge

t for 2

H(Billions of yen)

Nonconsolidated Operating ResultsCapital investments and

depreciation


III. Performance Forecasts for the

Year Ending March 31, 2021


137,277

156,267

167,437

154,926160,500

65,810

75,86182,565

78,113 76,400

87,51895,601

100,540 97,65788,504

41,55046,027 47,628 48,803

42,155

0

50,000

100,000

150,000

200,000

FY2017 FY2018 FY2019 FY2020 FY2021forecasts

Consolidated net sales (full year) Consolidated net sales (1H)

Nonconsolidated net sales (full year) Nonconsolidated net sales (1H)

25

Consolidated and Nonconsolidated Sales Results and forecasts

(Millions of yen)


26,192

22,98621,634

17,10416,500

12,85312,102

11,153

8,2687,200

20,06419,200

17,600 17,906

15,310

9,90410,650

9,077 9,0537,743

0

10,000

20,000

30,000

FY2017 FY2018 FY2019 FY2020 FY2021forecasts

Consolidated ordinary income (full year) Consolidated ordinary income (1H)

Nonconsolidated ordinary income (full year) Nonconsolidated ordinary income (1H)

(Millions of yen)

Consolidated and Nonconsolidated Ordinary IncomeResults and

forecasts


Consolidated Operating Results ForecastsCompared with ‘Fifth Medium-Term Management Plan’ by Segment

Net sales ShareOperating

incomeShare Net sales Share

Operating

incomeShare

Japan 101,407 65.5% 15,528 105.5% 118,786 74.0% 14,135 92.4%

North America 26,066 16.8% -1,527 -10.4% 20,798 13.0% -472 -3.1%

Asia 27,666 17.9% 476 3.2% 25,801 16.1% 1,590 10.4%

Reconciliations -212 -0.1% 235 1.6% -4,885 -3.0% 47 0.3%

Total 154,926 100.0% 14,713 100.0% 160,500 100.0% 15,300 100.0%

(Millions of yen)

FY2021 ForecastsFY2020 Results


Consolidated and Nonconsolidated Profit Forecasts

Consolidated financial

forecasts

1H Forecasts 2H ForecastsFull-year

ForecastsSales profit ratio

Net sales 76,400 84,100 160,500 154,926 3.6%

Operating income 6,500 8,800 15,300 9.5% 14,713 4.0%

Ordinary income 7,200 9,300 16,500 10.3% 17,105 -3.5%

Net income attributable

to owners of parent4,400 6,100 10,500 6.5% 6,355 65.2%

Nonconsolidated financial

forecasts

1H Forecasts 2H ForecastsFull-year

ForecastsSales profit ratio

Net sales 42,155 46,349 88,504 97,658 -9.4%

Operating income 5,686 6,886 12,572 14.2% 14,468 -13.1%

Ordinary income 7,743 7,567 15,310 17.3% 17,907 -14.5%

Net income 5,353 5,217 10,570 11.9% 6,745 56.7%

FY2021 ForecastsFY2020

Results

Full-year forecasts

YoY

increase/decrease

(Millions of yen)

FY2021 ForecastsFY2020

Results

Full-year forecasts

YoY

increase/decrease


Full-year Forecasts by Consolidated Major Companies FY2021

Change Change Change Change Change Change Change Change

Maruichi Steel

Tube42,155 -6,648 5,686 -1,012 7,743 -1,310 5,353 492

Maruichi Steel

Tube88,504 -9,154 12,572 -1,896 15,310 -2,597 10,570 3,825

MAC 2,925 -983 -56 155 -24 129 -24 129 MAC 6,179 -1,194 -27 538 37 476 37 358

MKK USA INC. 4,587 -1,880 -175 66 -134 152 -134 130 MKK USA INC. 9,187 -2,580 -401 154 -320 286 -320 234

MOST 1,688 -548 -150 282 -168 273 -168 273 MOST 3,500 -1,098 -155 531 -181 463 -181 463

MMX 825 -417 1 -173 33 -139 -43 -139 MMX 1,932 -670 111 -300 143 -243 39 -220

SUNSCO

(including Hanoi)10,110 -1,185 518 518 451 557 441 564

SUNSCO

(including Hanoi)22,304 -344 1,430 1,383 1,283 1,162 1,256 4,510

KUMA 911 -1,891 -56 -129 -57 -140 -42 -129 KUMA 3,497 -2,085 160 -120 156 -110 117 -110

Kobelco Steel

Tube Co., Ltd.13,522 13,522 519 519 480 480 321 321

Kobelco Steel

Tube Co., Ltd.25,351 25,351 1,124 1,124 1,000 1,000 477 477

Alpha Metal 1,037 -1,298 -47 -34 -26 -38 -26 -37 Alpha Metal 2,852 -1,785 -34 -6 9 -18 9 -9

Other domestic

subsidiaries35,350 -7,488 268 -315 544 -331 375 -536

Other domestic

subsidiaries69,900 -12,607 473 -484 771 -501 533 -665

Affiliated companies accounted for

by the equity method - - - - 9 -136 9 -136Affiliated companies accounted for

by the equity method - - - - 188 -252 188 -252

Goodwill - - 0 0 - - - - Goodwill - - 0 0 - - - -

Consolidated

adjustments-36,710 7,101 -8 -342 -1,651 -565 -1,662 -513

Consolidated

adjustments-72,706 11,739 47 -337 -1,896 -272 -2,225 -4,466

Total 76,400 -1,714 6,500 -465 7,200 -1,069 4,400 418 Total 160,500 5,574 15,300 587 16,500 -605 10,500 4,145

Operating income Ordinary incomeNet income


of parent

Forecasts for 1H of FY2021

Net sales Operating income Ordinary incomeNet income


of parent

(Millions of yen)

Forecasts for FY2021

Net sales


Ⅳ. Progress of the

‘Fifth Medium-Term Management Plan’


Domestic Topics

■Expansion of steel pipe business domains (Stainless seamless steel tube business)

Acquired 100% shares in Kobelco Steel Tube Co., Ltd. (April 1) and change corporate name to

Maruichi Stainless Tube Co., Ltd. (scheduled for June 1)

Purpose of acquisition:

By the entry of Kobelco Steel Tube which has

expertise in seamless steel tube manufacturing,

which differs from the radio frequency welding

technology that Maruichi Steel Tube has

developed to date, we aim to help establish a

position as a leading company in steel tubes

through the synergistic effects of further

expansion of business domains and business

exchanges.

Welded

steel pipes

Stainless

seamless

steel tube

Domestic shares:

approx. 25%

New

business

domain

◆Overview of Kobelco Steel Tube and

its financial results for the last 3 years

Domestic shares: approx. 20%*

Global shares: approx. 3%*

Location Shimonoseki Head Office / Plant:

13-1 Chofuminatomachi, Shimonoseki,

Yamaguchi

(also has Tokyo Head Office and Osaka

Branch)

Capital 4.25 billion yen

Employees 364 (as of the end of March 2020)

*From FY2019 SMR survey data

26,05925,013 25,351

0

10,000

20,000

30,000

FY2019 FY2020 FY2021(forecast)

Net Sales (Millions of Yen)

1,085

591

1,124

744

360

477

0

250

500

750

1,000

1,250

FY2019 FY2020 FY2021(forecast)

Operating Income / Net Income (Millions of yen)

Operating Income Net Income


◆Business domains of Kobelco Steel Tube

Stainless seamless

steel tube

Piping use • Piping use for chemical

industry

• Piping use for semiconductor

industry

Heat exchanger

use

• Heat exchanger use for

chemical industry

• Heat exchanger use for power

plant

Mother tube

Industrial

machinery use

• Mother tube for redrawing

• Piping for machine structural

use

Boiler tube • Boiler tube for power plant

Precision tube

(seamless stainless steel tubes with highly

smooth surface and high cleanliness)

• Piping for semiconductor

industry

• Piping for hydrogen gas station

• Car engine injection piping

Specialty tube • Ultra-thin tube

• Duplex tube

• Specialty tube Precision tube

Ratio of net sales by product (FY2020)

Domestic Topics


Overseas Topics (i)

February 2020 KUMA (India) completed construction of new Gujarat Plant

Established for the purpose of expanding KUMA’s production capacity in the

rapidly growing Indian market, covering the Gujarat area where growth is

expected due to the entry of Suzuki Motor Gujarat and Honda motorcycle plant

→Although it will operate as a pipe cutting plant for the time being, it will also

manufacture pipes in the future.

Location Ahmedabad GIDC Industrial Park,

Gujarat, India

Site area 182,418㎡


Facilities Three cutters

Purposes Enhancement of production system

for four-wheeled and two-wheeled

vehicles


MPST (Philippines) Opening ceremony (July 2019)

Opening ceremony held in July 2019

After sample production, commercial production will commence starting

from approved products for Japanese motorcycle manufacturers

Location Batangas, Philippines

Founded February 2018


Overseas Topics (ii)


(Billions of yen)

Progress of the ‘Fifth Medium-Term Management Plan’ (Numerical Targets)

Target

achieved

Final Year of ‘Fourth

Medium-Term

Management Plan’Fifth Medium-Term Management Plan

FY2018 ResultsFY2019

ResultsFY2020

Targets

FY2020

Results

FY2021 Medium-Term

Management Plan Targets

(*Announced March 2018)

(FY2021 Forecasts)

Net sales 156.2 167.4 170.0 154.9175.0

（160.5）

Operating

income20.8 19.2 19.6 14.7

24.0

（15.3）

Operating

margin13.3% 11.5％ 11.5% 9.5%

13.7％

（9.5％）

ROE 6.2% 5.5％ 5.5% 2.4%6.5％

（4.0％）

Shareholder

return ratio80.5%

(3-year average)50.7％ 50.0% 129.6%

50.0％

（50.6％）

Return of profit

to society¥22 million

(3-year average)¥25 million ¥30 million 38

¥30 million

（¥26 million）

129.6%

¥38 million


Results and Forecasts

during the Fifth

Medium-Term

Management Plan

Net Sales Targets and Progress

Net Sales (Billions of yen)

80.989.1 90.8 86.7

94.1 97.589.6 87.5

95.6 100.5 97.788.5

0.0

2.6 3.11.6

2.32.6

1.8 1.2

3.23.3

2.7 25.4

10.5

10.112.7

14.1

17.421.7

25.822.4

26.7

32.526.3

20.8

11.0

13.914.0

15.4

22.7

30.827.7

26.1

30.7

31.1

28.225.8

102.4

115.7120.6 117.8

136.5

152.6

144.9

137.2

156.2

167.4

154.9160.5

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019(results)

FY2020(results)

FY2021(forecasts)

Nonconsolidated sales in Japan Other sales in Japan North America AsiaTotal


13% 13%

15%

12% 12%

18%

13%12%

10% 10%

16%17%

20%

18%19%

22%

18%

15% 16%

12%

2%

0%

2%

0%-1%

10%

5% 5%

-2%

2%

-5%

0%

5%

10%

15%

20%

25%

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021

Overall Domestic Overseas

37

Operating Income (Billions of yen)

Operating MarginResults ForecastsResults


during the Fifth Medium-Term

Management Plan

Operating Income Targets and Progress

Results ForecastsResults

10.4

14.9 14.6 14.217.3 16.1 16.1 17.5

15.5 13.9 14.512.6

1.5

0.7 0.31.1

1.81.8 1.3

2.22.2

2.1 1.31.6

-0.8

0.3 0.8 0.1

0.4

-0.2 -1.2

1.92.0

2.5

-1.4 -0.5

-0.2

0.7

-0.2

0.0

0.60.0 0.8

2.91.1

0.7

0.31.6

10.9

16.615.5

15.4

20.117.7 17.0

24.520.8

19.2

14.715.3

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021

Asia North America Other operating income in Japan Nonconsolidated operating income in Japan


3.9%

5.0%

3.6%

5.0%

6.1%

3.9%

4.7%

7.4%

6.2%

5.5%

2.4%

4.0%

70.3%

53.7%

130.4%

61.5%

50.5% 46.9%

255.2%

49.6% 48.2% 50.8%

129.6%

50.6%

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

300.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019(results)

FY2020(results)

FY2021(forecasts)

ROE Shareholder return ratio

38

Targets of the ‘Fifth Medium-Term Management Plan’ (As of March 2018)

・Shareholder return ratio（FY2019・FY2020・FY2021）⇒ 50.0％・Targets of ROE：FY2019⇒5.3％、FY2020⇒5.5％、FY2021⇒6.5％

Capital Policy Targets and Progress


during the Fifth Medium-

Term Management Plan


*Payment basis (Billions of yen)

Capital Investment Plan and Progress during the ‘Fifth Medium-Term Management Plan’

3-year Total of

Medium-Term

Management Plan

FY2019

Results

FY2020

Results

FY2021

Forecasts

Total capital investment 21.0 5.7 6.3 7.2

Domestic

group

companies

Capital

investment13.0 3.1 4.7 5.4

Depreciation 10.7 3.2 3.4 4.2

Overseas

group

companies

Capital

investment8.0 2.6 1.6 1.8

Depreciation 10.9 3.0 3.0 3.0

*Announced on Mar. 2018


FY2021

Forecast

Domestic group companiesCapital investment 5.4

Depreciation 4.2

（単位：億円）Project

Total

budget

Amount

used

FY2021

budget

Completion

period

To be completed in FY2021 onwards

Construction of No. 4 Plant and completion of new color

painting line/C steel mill at Kyushu Plant1.11 0.66 0.48

Scheduled in

Jun. 2020

Completion of new cutting-to-size plant at Hamamatsu

Sales Office of Maruichi Kohan1.22 0.54 0.68

Scheduled in

Dec. 2020

Extension of No. 1 Plant and completion of new color

painting line at Tomakomai Plant1.49 0.29 1.11

Scheduled in

Mar. 2021

Completion of new warehouse and new column cutting

beveling machine at Shikoku Sales Office of Maruichi

Kohan

0.58 ‐ 0.46Scheduled in

Mar. 2021

Costs for mass production of new products, enhancement

of inspection equipment, etc. for Kobelco Steel Tube0.74 ‐ 0.74

Scheduled in

Mar. 2021

Extension of warehouse and completion of new column

cutting beveling machine at Okayama Sales Office of

Maruichi Kohan

0.27 ‐ 0.0Scheduled in

Apr. 2021

Renewal of electrical components of No. 11 and No. 12

mills at Tokyo Plant0.2 0.05 0.04

Scheduled in

Jan. 2022

(Billions of yen)

【Domestic】 Capital Investment Plan

during the ‘Fifth Medium-Term Management Plan’


（単位：億円）FY2021

Forecast

Overseas group companiesCapital investment 1.8

Depreciation 3.0

Project Total budgetAmount

used

FY2021

budget

Completion

period

To be completed in FY2021 onwards

MAC USA: Renewal of electrical components

of No. 3 mill0.14 ‐ 0.14

Scheduled in

Aug. 2020

SUNSCO Vietnam: Completion of new No. 2

cold-rolling mill2.81 0.47 1.36

Scheduled in

Jun. 2021

(Billions of yen)

【Overseas】 Capital Investment Plan

during the ‘Fifth Medium-Term Management Plan’

(Billions of yen)


Commitments in Japan

Issues and Major Initiatives Initiative Results

i) Maintaining high profitability and further

strengthening sales capabilities

• Renewal of No. 2 Mill at Tokyo Plant (Jun. 2018)

• Relocation of Niigata Sales Office of Maruichi Kohan Ltd. (Mar. 2019)

• Renewal of No. 1 Slitter at Tokyo Plant (May 2019)

• Renewal of SR heater at Sakai Plant (May 2019)

• Acquisition of Kobelco Steel Tube Co., Ltd. (Apr. 2020)

ii) Re

sp

on

din

g to

the

sh

orta

ge

of w

ork

ers

an

d

incre

asin

g p

roductiv

ity

• Increasing production and clerical work

efficiency using IoT and AISee P. 43

• Renewal of facilities, and review of

recruitment policy and work styles

• Merger and relocation of four group facilities, including head office

• Renewal of recruit website and leaflet

• Use of female and overseas human

resources

• Enhancement of support system for early return from childcare leave

• Recruitment of international students (FY2019: 1 student)

• Acceptance of international technical interns

(Accepted two at Sakai Plant, two at Tokyo Plant during FY2020;

Planned to accept four at Takuma Plant, two at Sakai Plant, and two atTokyo Plant during FY2021)

• Acceptance of SUNSCO technical employees

(Accepted two at Tokyo Plant during FY2020;

Planned to accept two at Nagoya Plant, and two at Tokyo Plant during

FY2021)

Progress during the ‘Fifth Medium-Term Management Plan’ (Issues and Major Initiatives)


FY2019 FY2020 FY2021

Increasing production and clerical work efficiency (using IoT and AI)

43

Automate generation of machine stoppage factor logs by linking operation data of

production lines

Increasing clerical work efficiency

using AI and RPA

Revised

Tokyo Plant No. 2 and No. 11 Mills (introducing)

Nagoya Plant all lines (introducing)

Sakai Plant No. 1 Mill (introduced)

Sakai Plant all lines (introducing)

Shikoku Plant No. 7 Mill and Kyushu Plant No. 3 Mill (introducing)

New salary calculation system introduced

Introduction of facility maintenance system aimed at efficient maintenance/

preventive maintenance• Daily work reports containing records of production facility maintenance are converted into data form and analyzed based on

the data

• Create equipment ledgers and manage equipment spare parts on a company-wide, shared basis

Introducing RPA for routine clerical work

Introducing at Sakai, Tokyo, and Nagoya Plants

Automate generation of environmental communication slips


Commitments Overseas


i) Three U.S. companies:

Expanding operations using newly established or

replaced facilities and by further strengthening

marketing capabilities

• MOST: completion of new plant, completion of new 2-inch mill

• Leavitt: constructed new cutting-to-size facilities, renewal of 2-inch mill

• MAC: renewal of 2-inch mill

ii) SUNSCO (HCM):

Strengthening domestic sales capabilities, mainly

focusing on pipes and further reducing costs

through improvement in equipment operation

rates and yields, as well as achieving stable

profitability

• Focusing on boosting domestic sales staff and increasing number of

distributors

• Strengthen company-wide initiatives to reduce manufacturing costs

• Dispatching of Vietnamese international students after training in Japan

iii) Automobiles and motorcycles:

Implementing capital investments and

strengthening sales capabilities in line with the

expanded production in each country

• Completion ceremony held for MPST, Philippines (July 2019)

• Completed Gujarat Plant; third location of KUMA, India (February

2020)

iv) Procuring prospective local human resources and

further level enhancement/facilitating the

replacement of employees dispatched from the

head office with local human resources

• Continuing to focus on developing local production and sales

executives at overseas companies

v) Using overseas revenue to increase profit

redistribution in Japan in the form of dividend,

royalty, or the like

• Dividends received and royalties generated:

US$10.2 million in FY2019 and US$8.2 million in FY2020



Commitments in Japan and Overseas


i) Giving further consideration to the environment,

enhancing energy efficiency, and strengthening

safety measures

See P. 49

(Maruichi Steel Tube Group SDGs initiative results)

ii) Increasing labor productivity per working hour

and labor cost

• Started operation of system using IoT technology for

production lines and facility maintenance at core

domestic plants

• Advanced renewal of aging lines and harnessed effects

to improve productivity and safety

iii) Proactively considering M&A and other

business investments in Japan and overseas

• Acquired Kobelco Steel Tube Co., Ltd. (Maruichi

Stainless Tube Co., Ltd. from June 2020 onward)



Shareholder-Focused Policy and Social Contribution Policy

Issues and Major Initiatives Results

i) Divided policy: Firmly upholding the policy of

“nonconsolidated ordinary income x (1- effective

corporate tax rate) x 50%”

See P. 47

ii) Continuing to provide approximately 0.5% of

nonconsolidated net income after payment of

dividends as social contribution

Nonconsolidated net income after payment of dividends in FY2019:

5,944 million yen

Social contribution in FY2019: 25 million yen

Nonconsolidated net income in FY2020: 6,745 million yen (Dividends

paid: 8,740 million yen)

Social contribution in FY2020: 38 million yen

iii) Increasing social contributions in Japan and overseas

• Japan: Contributing to the fields of culture, art,

sports, medical care, education, and natural

environment protection

• Emerging countries: Increasing contributions to

poverty eradication, health care, medical care,

and education promotion

See P. 53



Share

buybacks

Number of

shares/price

Net income

(nonconsolidated)

Dividend payout

ratio

(nonconsolidated)

Total return ratio

(nonconsolidated)

ROE

(consolidated)Interim

dividend

Year-end

dividend

Annual

dividend

FY2019（25.00）（49.00）（74.00）

2,071 4,059 6,130 12,074 50.8% 50.8% 5.4%

FY2020（40.00）（65.50）（105.50）

3,314 5,426 8,740 6,745 129.6% 129.6% 2.4%

FY2021 (Forecast)（25.00）（39.50）（64.50）

2,071 3,273 5,344 10,570 50.6% 50.6% 4.0%

47

(Millions of yen) (*Figures in the parenthesis indicate dividend per share in yen.)

FY2021 targets (last year

of the ‘Fifth Medium-Term

Management Plan’) 14,200 50.0% 50.0% 6.5%

● Payment of commemorative dividendsScheduled to pay commemorative dividends to express

gratitude for the Company’s 70th anniversary in March 2018

and based on the policy to create new value shared with

shareholders, aiming toward a 100-year company.

FY2020 Ordinary dividendCommemorative

dividend

Interim 25.00 15.00

Year-end 50.50 15.00

Total 75.50 30.00

・ Buy-back of one million shares in July 2015 and a further million shares in January 2016

i) Maintaining the divided policy

• The dividend policy of setting 50% of expected net income (*) in the nonconsolidated statements of income as annual

dividend

* Expected net income calculated as “nonconsolidated ordinary income x (1-effective corporate tax rate)”

• Maintaining the minimum annual dividend at ¥50 per share

Shareholder-Focused Policy and Social Contribution Policy

(Reference) Status of dividend paid


Payment of

commemorative

dividends


Maruichi Steel Tube’s contribution to SDGs through core businesses

Creating value through the products themselves

Category Human resources & working

styles

Consideration for the

environmentGovernance

Social contribution

activities

Critical

issues

Promotion of diversity and

inclusion

Global environmental

conservation

Ensuring fairness and

transparency in management

Cooperation and support for cultural

activities

Reform of personnel & evaluation

systems and education system

Formation of a recycling-

oriented society

Stronger internal controls Promotion of sports

Recruitment

policy

Labor health and

safety

Biodiversity conservation BCP completion and renewal Contribution to local communities

Enhanced

operational

efficiency and

productivity

Human rights

protection

Transition to

environmentally-friendly

products

Swift and accurate decision-

making and a stronger

supervisory function

Contribution to the global

community

Related

SDGs

48

Maruichi Steel Tube Group SDGs initiatives

Creating value through business activities

i) Livable, sustainable

urban development

ii) Safe and convenient transport and logistics methods

iii) Agricultural materials

to support a rich and

varied diet

i) Employment

creation and the

development of

potential

ii) Construction

of global

partnerships

iii) Reuse of waste

heat and scrap from

production

processes

Critical issues to be solved to realize SDGs through core businesses (materiality)

S SE G


環境への配慮・エネルギー効率の向上・省エネ・資源の有効活用

E

Maruichi Steel Tube Group SDGs initiative results

Registered with “Plastics Smart” through initiatives

to reduce plastic cups for visitors and plastic bottles

at the head office

Established the

Environmental Management Committee

Based on the ISO 14001 environmental committee,

company-wide initiatives are deployed on conserving the

global environment, reducing waste/the 3Rs, combatting

pollution, managing chemical substances, and

conserving biodiversity

E

Revised

Measures to prevent global warming

Reducing emissions from FY2014 levels in accordance

with the Paris Agreement (adopted at 2015 COP21)

FY2019 results in proportion to FY2014 baseline

• CO2 emissions: 1.5% reduction• Energy per unit of production*: 2.3％ reduction

* Energy consumption (crude oil equivalent) ÷

production volume

(Initiative results thus far)

• Replacement of welding equipment to energy-

saving types

• Introduction of waste heat utilization equipment

• Adoption of inverter control to motors

• Adoption of energy saving equipment such as high-

efficiency transformers and LEDs

• Held monthly energy conservation conferences

Using renewable energy (Mega solar business)

• Installation of solar power generation equipment

nationwide (7 plants and 10 sites domestically)

*Takuma and Shikoku Plants counted separately since FY2018

(ii) Consideration for

the environment

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2013 2014 2015 2016 2017 2018 2019

Shikoku

Tomakomai

Tokyo

Nagoya

Sakai Pole

Sakai

Takuma


Maruichi Steel Tube Group SDGs initiative results

50

Employment of Seniors

Pass on skills and alleviate

labor shortages through

reemployment system

Diverse human resources

Initiatives relating to

occupational health and safety

Acceptance of

Vietnamese technical interns

FY2020: 2 students at Sakai Plant,

2 students at Tokyo Plant

FY2021: scheduled to accept 4 students

Global business training

Provided training on intercultural

communication mainly for employees

scheduled for overseas assignments

Promotion of women in the workplace

• Workshops for female employees

• Workshops for male managers

• Development of an environment where

women can continue to work on

(childcare support/job return support systems)

Recruitment of international students

FY2019: 1 Chinese student

SUNSCO of Vietnam

Acceptance of technical employees

FY2020: 2 employees at Tokyo

Plant

FY2021: scheduled to accept 8

employees

Understanding of LGBT

Included in compliance training

targeting all employees of

domestic Group

Revised

S(i) Human resources

& working styles

Mental health consideration

• Training for managers/supervisors

• Implementation of stress checks

• Development of follow-up system for

those with high stress

Creation of Overtime Work

Reduction Committee

Enhancement of safety education

• Establishment of Safety Education

Department (from Oct. 2015)

• Safety education for new employees

• Safety education by year of joining company

Initiatives towards eliminating

occupational accidents

• Holding of Company-wide production safety

conference

Conference is held once every two months

including site inspection at different plant each time

Training at a hazard simulation

facility (Sakai Plant)

55 59 60

0

20

40

60

Mar.2017 Mar.2018 Mar.2019

Changes in number of personnel under the

reemployment system


Maruichi Steel Tube Group SDGs initiative results (iii) Governance

Initiatives to improve corporate governance (1)

G

環境への配慮Formulation and Revision of

Corporate Governance Guideline

Compliance Training

FY held Training topic

FY2020 Power harassment (abuse of authority)

FY2019Sexual harassment (pregnancy discrimination/LGBT)

Power harassment (abuse of authority)

FY2018 Communication using SNS

FY2016 Diverse employment styles; sexual harassment

Training provided to all employees in domestic Group

Composition of Board of

Directors

• Introduction of Outside Directors

(As of June 2019 General Meeting of

Shareholders: 4 Internal and 3 Outside Directors)

Board of Directors Evaluation

Director Nomination and

Compensation

• Created Advisory Committee for Director nomination and compensation (November 2015)

• Introduced stock compensation system for Directors and Managing Officers (July 2016)

• Introduced restricted stock compensation system for Internal Directors (August 2019)

• Evaluated operations, composition, and other aspects of

Board of Directors

(Conducted yearly since April 2016)

• Formulation of Corporate Governance

Guidelines (2015)

• Update of Corporate Governance

Guidelines in accordance with the

revision of Corporate Governance Code

(2018)


Preparation and distribution of compliance manual

Compliance Rules (Summary)

1. Respect for human rights; prohibition of

discrimination, sexual harassment, and

power harassment; protection of

personal information

6. Intellectual property related laws

and regulations

11. Appropriate use of information

systems

2. Compliance with Antimonopoly Act and

related laws and regulations

7. Prohibition against bribery, and

rules on gifts, entertainment, etc.

12. Appropriate accounting, tax filing,

and disclosure of company

information

3. Prohibition against unfair competition 8. Prohibition against providing

benefits to antisocial forces

13. Prohibition against conflicts of

interest

4. Compliance with laws and regulations 9. Environmental conservation 14. Reporting to authorities and

cooperation with investigations

5. Regulations against insider trading 10. Appropriate management of

information

15. Rules for participation in political

movements, etc.

Creation of:

• Compliance Committee

• Internal compliance hotline

• External compliance hotline

• Internal compliance hotline for women

Creation of Compliance Committee and Compliance hotline

Maruichi Steel Tube Group SDGs initiative results (iii) Governance

Initiatives to improve corporate governance (2)

G


Maruichi Steel Tube Group SDGs initiative results S

Sponsoring and supporting

cultural activities

• Sponsoring the Shōsōin Exhibition (from FY2013)*Co-sponsored the exhibition “Shōsōin: Essential

Treasures of Ancient Japan Passed Down by the Imperial

Family” at Tokyo National Museum in FY2020

• Sponsoring the One Coin Bunraku (from FY2019)

• Sponsoring the “Theater of the Heart” activities of

Shiki Theatre Company (from FY2016)

Promoting sports • Support for Rugby World Cup 2019 Hanazono

(FY2019)

Contributing to local

communities

• Sponsoring “2025 Japan World Expo Committee”

(from FY2018)

Contributing to the global

community

• Support for 2019 G20 Osaka Summit (FY2020)

• Support for the Asia Prevention of Blindness

Association (from FY2016)

• Provided scholarships to students at Bal Niketan

Senior Secondary School in India

(Provided by KUMA; started in FY2018)

(iv) Social contribution

activities


New Corporate Slogan

54


The One-and-Only Company,

Found Everywhere.

Everywhere has the following three meanings:

(i) Everywhere in daily life (Maruichi Steel Tube’s products are used in all aspects of people’s lives)

(ii) Everywhere in Japan

(we have a nationwide production and sales network based on system of production where demand exists)

(iii) Everywhere in the world (we have locations worldwide through our accelerating global expansion)

Toward being a unique, unequaled, one-and-only Company found everywhere.


Concept of Aiming to be a 100-year Company and 2030 Vision

Improve profitability through deeper and more evolved businesses→ Introduce digital transformation (DX)

→ Promote open innovation

→ Accelerate global expansion with awareness of solving societal issues

Take bold challenges in new domains

Reform into an organization that generates innovation

Everywhere, MARUICHI56

29.6% 29.5% 29.1% 29.7% 29.7% 30.6% 31.4%

26.3% 25.1% 23.9% 22.0% 21.8% 21.6% 22.1%

17.4% 19.9% 20.7%20.6% 21.7% 22.0% 21.0%

16.9% 15.6%14.3% 15.8% 14.9% 13.9% 13.7%

9.9% 9.9% 12.0% 12.0% 11.9% 11.9% 11.9%

11,015

11,942

10,306

12,117

11,804

10,179

11,462

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Mar.2014 Mar.2015 Mar.2016 Mar.2017 Mar.2018 Mar.2019 Mar.2020

Nu

mb

er o

f Sh

are

ho

lde

rsRa

tio

by S

ha

reh

old

ers

(Reference) Change in Shareholder Distribution

Trading unit of share was lowered to 100 shares in October 2005, and in April 2008, 4,260,000 shares of the treasury stocks were canceled.

(Figures on the bars indicate the number of shares.)

(Unit: thousand of shares)


17,288

12,526

8,110

11,090

9,755

10,084

12,398

14,828

19,207

16,759

18,909

21,454 21,206

20,194

3,660

3,300

2,1101,896

2,0551,932

2,215

2,6692,846

3,085 3,165 3,2553,225

2,433

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

5,000

10,000

15,000

20,000

25,000

Mar.2007

Mar.2008

Mar.2009

Mar.2010

Mar.2011

Mar.2012

Mar.2013

Mar.2014

Mar.2015

Mar.2016

Mar.2017

Mar.2018

Mar.2019

Apr.2020

Sto

ck

pric

e o

f Ma

ruic

hi S

tee

l Tu

be

Nik

ke

i S

toc

k A

ve

rag

e

Nikkei Stock Average Stock price of Maruichi Steel Tube

(Reference) Change in the Stock Prices (based on the closing price of the month)

(Yen)


(Reference) Overview and Trends in

Business Performance of Overseas

Group Companies


Operating Operation status Customer trends

U.S.

MAC

MOST

LEAVITT✓

Plants are partially operational, and offices

are alternating work from home (steel

business is allowed to operate since it is

classified as an essential business in the

U.S.)

Customers are 80-90% operational

MexicoMMX

AMX×

Suspended operations from April 13 to May

17 due to government orders for all but

essential businesses to close down

Automobile and parts manufacturers

have suspended operations (planned

to resume operations in mid-May)

Vietnam

SUNSCO

(HCM, HNI)

J-Spiral✓

Operational, with company-wide measures

in place to prevent infection

Motorcycle and parts manufacturers

are also operational

India KUMA ×

Operations planned to close down from

March 23 to May 17 due to nationwide

lockdown (ensured capability for shipments)

Companies closed down since March

23. Some automobile manufacturers

have resumed production, but

operations are at low levels

Indonesia ISTW ✓

Offices are working from home on

alternating days; plants are partially

operating divided into two groups, in

accordance with customer status

Generally operating at low levels or

have suspended operations.

Activity in May is particularly low

overall, also in anticipation of

Lebaran holiday.

China MMP ✓All locations are partially operating (Foshan,

Tianjin, Wuhan)

Philippines MPST ×

Operations suspended from April 30 to May

12 due to extension of lockdown in Luzon;

partial operation planned to resume from

May 13

Motorcycle manufacturers plan to

suspend operations until May 17

Status of overseas subsidiariesImpact of the Novel Coronavirus


Product warehouse of Maruichi Sun Steel (Hanoi)

Company Limited (completed March 2018)

Maruichi Sun Steel Joint Stock Company (Ho Chi Minh)

Trends in business performance

(including Hanoi) (Millions of US$)

Net sales Operating income

December 2015 196 -1

December 2016 202 17



December 2019 Results 207 0

December 2020 Forecasts 206 13

5th Medium-Term Management Plan

(December 2020) Targets 258 20

Company name: Maruichi Sun Steel Joint Stock Company

(SUNSCO)

Founded: June 1996 (Capital participation in 2006)

Location: Ho Chi Minh and Hanoi

Capital: US$130 million

Shareholder

distribution:

Maruichi Steel Tube 72.53%

Toyota Tsusho 9.73%

JFE Steel 8.00%

Taiwanese shareholders 9.74%

Employees: 560

Production results: 226,300 mt/year


2-inch mill (updated July 2018)

Trends in business performance (Millions of US$)


December 2015 102 -26

December 2016 90 5

December 2017 106 6

December 2018 127 10

December 2019 Results 101 -6

December 2020 Forecasts 85 -4



Company name: Maruichi Leavitt Pipe & Tube, LLC

(Leavitt)

Founded: 1956 (Capital participation in 2008)

Location: Chicago, Illinois

Capital: US$25,225 thousand

Shareholder

distribution:

MKK USA. INC 90.00%

Sumitomo Corporation of America

10.00%

Employees: 113

Production

results:

102,200 mt/year

Everywhere, MARUICHI 622-inch mill (completed December 2018)



December 2015 60 0

December 2016 60 6

December 2017 68 3

December 2018 87 9





Company name:Maruichi American Corporation (MAC)

Founded: December 1978

Location:California

Capital: US$7.5 million

Shareholder distribution: Maruichi Steel Tube 53.00%

Metal One Corporation 30.00%

Maruichi Kohan 8.00%

MUFG Bank, Ltd. 5.00%

Sumitomo Mitsui Banking

Corporation 4.00%

Employees: 68

Production results: 55,500 mt/year




December 2015 35 0

December 2016 39 4

December 2017 48 3

December 2018 54 1





Company

name:Maruichi Oregon Steel Tube, LLC (MOST)

Founded: 2015

Location:Portland, Oregon


Shareholder

distribution:

MKK USA 100%

Employees: 48

Production

results:

34,600 mt/year

MOST: 2-inch mill: (newly established November 2018)




December 2015 15 3

December 2016 18 4

December 2017 19 4

December 2018 20 3

December 2019 Results 23 4

December 2020 Forecasts 18 1



Company

name: MARUICHIMEX S.A. de C.V. (Maruichimex)

Founded: January 2012

Location: Aguascalientes

Capital: US$20.80 million (equivalent)

Shareholder

distribution:

MAC 30.00%

MKK USA 30.00%

Marubeni-Itochu

Steel Group 20.00%

Toyota Tsusho 20.00%

Employees: 80

Production

results:12,500 mt/year

Cutting plant (completed April 2019)




March 2016 35 2

March 2017 41 4

March 2018 57 6

March 2019 56 6

March 2020 Results 51 4

March 2021 Forecasts 30 1



Company

name:

Maruichi KUMA Steel Tube Private Limited

(KUMA)

Founded: November 2003 (Capital participation in 2009)

Location: Manesar, Gurgaon, Haryana, Bangalore, and

Gujarat

Capital: INR113 million

Shareholder

distribution:



Employees: 113

Production

results:

25,700 mt/year

Bangalore Plant

Gujarat Plant (newly established February 2020)


Company

name:

Maruichi Metal Product (Foshan) Co., Ltd. (MMP)

Founded: April 2005

Location: Foshan, Guangdong


Shareholder

distribution:


LARGE CROWN LIMITED 35.00%

Chung Mao Trading 15.00%



Employees: 233

Maruichi Metal Product (Foshan) Co., Ltd.

Wuhan Branch

Maruichi Metal Product (Tianjin) Co., Ltd.


Company name: PT. Indonesia Steel Tube (ISTW)

Founded: December 1972

Location: Jakarta


Shareholder

distribution:



Local 20.00%

Employees: 515 Jakarta Plant

Semarang PlantCikarang Plant in eastern Jakarta

(new plant building completed March 2019)


Company name: Maruichi Philippines Steel Tube Inc. (MPST)

Founded: February 2018

Location: Batangas


Shareholder

distribution:



Employees: 20


(Reference) Features of the Maruichi Group


1. Management Philosophy

• As a leading steel tube company, our mission is to contribute to society by providing outstanding products and responding to the trust of customers.

• We respect all stakeholders, including shareholders, business partners, employees and local communities.

• We promote the creation of energy for growth and new values for the future by enhancing product reliability, technological capability, and sales capability by means of the wisdom, passion and action of each employee.

• We will continue being an outstanding company filled with dreams that all of our employees feel worthy of entrusting their lives to.


2. Domestic Production and Sales System


3. Overseas Production Facilities

MAC

(the U.S)

Leavitt

(the U.S)

ISTW Semarang

Plant

(Indonesia)

MMP (Foshan)

(China)

ISTW Jakarta Plant

(Indonesia)

SUNSCO

(Vietnam)

KUMA (India)

Manesar Plant

SUNSCO (Hanoi)

(Vietnam)

Asia Americas

MMP

(Tianjin)

(China)

J-Spiral

(Vietnam)

MMP (Foshan)

Wuhan Branch (China)

Maruichimex

(Mexico)

ISTW Cikarang Plant

(Indonesia)

Alphamex

(Mexico)

MOST

(the U.S)

KUMA (India)

Bangalore Plant

62

MPST

(Philippines)

KUMA (India)

Gujarat Plant


Sound

Financial

Structure

Independent

Management

Business

Development

in the Pacific

Rim

Material

Manufacturing

and

Processing

Production Where

Demand Exists

Dedicated

to Tube

ManufacturingAdoption of

Proprietary

Sales System

Variety of

Products

4. Features

Production Where Demand Exists

Maruichi Steel Tube operates 12 plants, including affiliated companies, which

cover the areas from Hokkaido to Kyushu. Such wide-coverage plant operation

significantly contributes to the improvement of service to users, as well as the

reduction of distribution cost.

Variety of Products

Maruichi Steel Tube provides a variety of products to meet the diverse needs of

users.

Material Manufacturing and Processing

Steel strips of optimum quality processed at the Takuma Plant are used at each

plant of the Maruichi Group.

Independent Management

Maruichi Steel Tube’s management is independent of any affiliation and not

subject to restrictions regarding suppliers and customers. Maruichi Steel Tube

therefore is able to constantly conduct business operations in pursuit of maximum

profit.

Sound Financial Structure

The sound financial structure serves as the strong backbone of Maruichi Steel

Tube.

Dedicated to Tube Manufacturing

Maruichi Steel Tube is dedicated to steel tube manufacturing and related

businesses.

Adoption of Proprietary Sales System

Maruichi Steel Tube sells products through two channels: general trading

companies and Maruichi Kohan Ltd. Maruichi Kohan has its own warehouse and

also stocks and sells products. Under this system, Maruichi Steel Tube can clearly

grasp customer needs, demand trends and price trends, thus enabling the

company to devise management strategies that are sensitive to the market at all

times.

Business Development in the Pacific Rim

It has become easier to grasp market conditions, such as supply and demand

trends of hot coils and products.


2015 Converted MOST into a consolidated subsidiary.

2016 Completed consolidation of Osaka Plant.

2018 Established MPST in Philippines.

2019 　Started operation of MPST in Philippines.

2020 Acquired shares of Kobelco Steel Tube Co., Ltd.

(scheduled to change corporate name to Maruichi

Stainless Tube Co., Ltd. in June)

Relocation of head office, Osaka Office, Sales

Department Conduit Section, Maruichi Kohan head

office/Osaka Sales Office to Namba, Chuo-ku, Osaka.

5. History

1926 Maruichi Production founded as a bicycle parts manufacturer.

1935 Started manufacturing bicycle steel pipes.

1940 Changed company name to Maruichi Steel Tube Works.

1948 Established Maruichi Steel Tube Ltd.

1956 Reorganized Osaka Office and established Maruichi Kohan Ltd.

1957 New ly constructed Osaka Plant.

1958 Established Tokyo Office.

Imported electric tube w elding system manufactured by Abby

Etona Co. of the U.S., and shifted to an

electric resistance w elded tube manufacturer.

1960 Changed the trade name to Maruichi Steel Tube Ltd.

Established Nagoya Office.

1961 New ly constructed Tokyo Plant.

1962 Listed on the Second Sections of the Tokyo Stock Exchange

and the Osaka Securities Exchange.

1964 Listed on the First Sections of the Tokyo Stock Exchange and

the Osaka Securities Exchange.

Established the Fukuoka Office.

1965 New ly constructed Sakai Plant.

1966 New ly constructed Nagoya Plant (integrated into current

Nagoya Plant in 1984.)

Established Hiroshima Office.

1970 Established Hokkaido Maruichi Steel Tube Ltd.

Established Sapporo Office.

1971 Established ISTW in Indonesia.

1972 New ly established Pole Plant.

Established Osaka Office.

1973 New ly constructed Tokyo No. 2 Plant.

1974 Established Shikoku Maruichi Steel Tube Ltd.

Established Kyushu Maruichi Steel Tube Ltd.

1977 New ly constructed Nagoya Second Plant (current Nagoya

Plant).

1978 Relocated the head off ice to the present location at Kitahorie,

Nishi-ku, Osaka.

Established MAC in the U.S.

1989 New ly constructed Takuma Plant.

1998

2000 Completed construction of the new Hiroshima Office and

w arehouse.

2001 Annealing facilities built in Takuma Plant.

2002 Constructed the new w arehouse in Tokyo No. 2 Plant.

2003 New w arehouse and cutting factory opened in Nagoya

Plant.

2005 Took over the lighting pole business of JFE Steel Pipe Co.,

Ltd.

2006 Completed Nagoya Plant cutting-to-size w arehouse building.

Started operation of MMP in China.

Invested in Tokyo Superior Steel Tube Works.

Invested in SUNSCO of Vietnam.

2007 Constructed the new 0.5-inch mill at Nagoya Plant.

New ly established and started operation of No.6 plant at

Sakai Plant.

2008 Converted SUNSCO and Leavitt into consolidated

subsidiaries.

Competed renovation of Sakai Plant.

2009 Converted KUMA of India into a subsidiary.

Started operation of Sakai Production Facility of Seikei Steel

Pipe Corporation.

2010 Converted Alpha Metal into a consolidated subsidiary.

16-inch mill built in SUNSCO.

Started operation of SUNSCO Hanoi.

Invested in J-Spiral Steel Pipe Co., Ltd. in Vietnam.

2011 Started operation of MMP Tianjin in China.

New ly constructed the stainless steel tube factory at Tokyo

No. 2 Plant.

New ly constructed the No. 2 factory at Sakai Pole Plant.

2012 New ly established Wuhan Branch for MMP in China.

New ly constructed the No. 3 factory at Tokyo No. 2 Plant.

Established Maruichimex in Mexico.

2013 Started operation of the mega solar pow er facility in the

Takuma Plant.

Started operation of the second CGL/CCL of SUNSCO.

2014 Completed consolidation of Tokyo Plant.

Converted Maruichimex into a consolidated subsidiary.

Carried out modif ication w ork for the galvanizing furnace

and installed the pickling line and trimming facility at Takuma

Plant.

Integrated Sapporo Plant of Hokkaido Maruichi Steel Tube

Ltd. into Tomakomai Plant.


Direction of the Maruichi Steel Tube Group

1. We are intent on continuing pursuing shareholder-focused management

and making constant efforts to maximize shareholder value in the future.

Also, we will grow and develop into a corporate organization that can be

considered globally as number one in terms of both quality and quantity in

the steel pipe industry.

２. Based on the ‘Fifth Medium-Term Management Plan,’ the Company will

maintain high profitability while continuing to meet the needs of society,

actively engage in future-oriented growth investment, and strive to achieve

further growth amidst the rapidly changing business environment.


Disclaimer

Plans and forward-looking statements herein are based on the

Company’s judgment drawn from currently available information.

Please note that actual results may differ significantly from such plans

and forward-looking statements due to various important factors.

Documents

Financial Results Briefing...Everywhere, MARUICHI 1 Financial Results Briefing For the Year Ended March 31, 2020 Chairman & CEO Hiroyuki Suzuki I. Consolidated Financial Highlights