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SPECIAL FEATURE 1: THE JFE GROUP'S FIRST MEDIUM-TERM BUSINESS PLAN
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| In
January 2003, the JFE Group made public its
First Medium-Term Business Plan, covering
the three fiscal years from the year ended
March 2004 through the year ending March 2006
(April 2003 to March 2006). The Plan sets
out common policies for the Group, and also
defines policies for each member company of
the Group. |
 COMMON
MEASURES FOR THE GROUP
| (1) |
Strengthening Group-wide
management |
- Promote corporate governance and compliance
measures through the holding company system
and strive for optimal business management
that takes into account the different characteristics
of each business field, and further strengthen
the Group's consolidated management.
- Ensure an adequate infrastructure for
the Group's finance and information networks
- Reorganize and consolidate Group companies
operating in the same business field at the
earliest possible date
|
| (2) |
Technology-based organization |
| |
To ensure that we routinely
develop and further improve on our world-class
technologies, we will maintain and support
three research laboratories: the JFE Steel
Research Laboratory, JFE Engineering Research
Center, and JFE R&D Corp. |
- Double the number of Only One and Number
One products through unflagging efforts to
create new Only One and Number One technologies
JFE Steel: original target 6%
 15-20%,
JFE Engineering: original target 5%
14%
- Develop process technology that helps
raise facilities productivity and contributes
to the early achievement of target costs
- Maintain the leading technologies in both
our core fields and in growth fields
|
| (3) |
Promoting human resource
and labor managementpolicies |
| |
In order to enhance productivity
by promptly realizing the benefits of the
merger, while making the maximum and most
appropriate use of the abilities of each and
every employee, |
- Promote personnel and labor management
policies that are proper for business and
strategy of each Group company
- Secure and train adequate human resources
in order to cope with the expected upcoming
large-scale generational change
|
| (4) |
Reducing procurement costs |
- Make maximum use of the bargaining power
of the Group as a whole
- Unite manufacturing and technology to
reduce procurement costs by such measures
as the maximum use of low-cost materials by
sharing leading technologies within the Group
|
| (5) |
Fully implementing environmental
management |
- Take proactive approaches to the global
environmental issues
- Establish world-class environmental management
|
| (6) |
Actively utilizing information
technology |
| |
Develop a new unified system
to shorten the management cycle, integrate
the foundations of management and construct
Group-wide information networks |
|
GROUP
CONSOLIDATED FINANCIAL TARGETS
 |
| |
|
Billions
of yen |
 |
| |
|
Actual |
Plan's
final target |
|
| (Years
ended/ending March 31) |
2003 |
2006 |
|
| Ordinary
income |
104.6 |
|
250 |
|
| |
JFE Steel |
91.0 |
* |
230 |
|
| |
JFE Engineering |
12.0 |
* |
16 |
|
| Return
on sales (ROS) |
4.3% |
|
10% |
|
| |
JFE Steel |
4.6% |
* |
11% |
|
| |
JFE Engineering |
2.6% |
* |
4% |
|
| Return
on assets (ROA) |
3.7% |
|
9% |
|
 |
|
|
|
|
|
|
| |
|
|
|
|
| Total
assets |
3,831.6 |
|
3,360 |
|
| Debt
outstanding |
2,057.1 |
|
1,600 |
|
| Shareholders'
equity |
594.5 |
|
830 |
|
|
| *Figures
of the year ended March 2003 for JFE Steel
and JFE Engineering are approximate calculations. |
GROUP
CASH FLOW TARGETS
|
| |
|
Billions
of yen |
|
| |
|
Three-year
cumulative total |
JFE Steel |
|
| Ordinary
income |
580 |
|
530 |
|
|
| Balance |
105 |
|
100 |
|
| |
Capital investment |
(385) |
|
(370) |
|
| |
Depreciation and amortization |
490 |
|
470 |
|
|
| Investments
and loans |
(40) |
|
(38) |
|
| Reduction
in assets* |
150 |
|
150 |
|
| Income
taxes, dividends and other |
(345) |
|
(312) |
|
|
| Total |
450 |
|
430 |
|
|
|
|
|
|
|
|
| *
Approximately ¥50 billion each for stocks,
lands, and shares |
PROGRESS UNDER THE FIRST
MEDIUM-TERM BUSINESS PLAN
| The
Group made great progress under the First
Medium-Term Business Plan in the year ended
March 2004, the first year of the Plan. We
are on track to meet each of our targets for
the final year of the Plan ending March 2006;
most of the targets may even be met ahead
of schedule, in the year ending March 2005.
|
PROGRESS
UNDER THE FIRST MEDIUM-TERM BUSINESS PLAN
|
| Group |
Billions
of yen |
|
| Actual |
Actual |
Estimated |
Plan's
final
target |
|
| (Years
ended/ending March 31) |
2003 |
2004 |
2005 |
2006 |
|
| P/L |
|
|
|
|
| |
Ordinary income |
104.6 |
218.3 |
400 |
250 |
| |
Net income |
15.9 |
106.8 |
120 |
130 |
| |
Net income per share (yen) |
2.77 |
18.58 |
20.46 |
22.6 |
|
| B/S |
|
|
|
|
| |
Total assets |
3,831.6 |
3,724.4 |
3,600 |
3,460 |
| |
Debt outstanding |
2,057.1 |
1,837.4 |
1,480 |
1,600 |
| |
Shareholders'
equity |
594.5 |
746.2 |
870 |
830 |
| |
Retained earnings
(deficit) |
(48.1) |
53.5 |
156 |
180 |
|
| FINANCIAL
INDICATORS |
|
|
| |
EBITDA* |
316.6 |
432.3 |
602 |
450 |
| |
ROS |
4.3% |
8.8% |
14.6% |
10% |
| |
ROA |
3.7% |
6.5% |
11.5% |
9% |
| |
Debt-to-equity |
346% |
246% |
170% |
190% |
| |
Shareholders'
equity |
15.5% |
20.0% |
24.2% |
24% |
|
|
|
|
|
|
|
| *
Ordinary income + interest expense + depreciation
and amortization |
|
Breakdown
by operating company |
Billions
of yen |
|
| Actual |
Actual |
Estimated |
Plan's
final
target |
|
| (Years
ended/ending March 31) |
2003 |
2004 |
2005 |
2006 |
|
| Net
sales |
2,426.8 |
2,473.7 |
2,740 |
2,500 |
| |
JFE Steel |
1,977.4 |
2,103.9 |
2,320 |
2,060 |
| |
JFE Engineering |
457.3 |
339.4 |
370 |
430 |
| |
JFE Urban Development |
30.8 |
26.2 |
33 |
47 |
| |
Kawasaki
Microelectronics (LSI) |
34.1 |
40.4 |
47 |
52 |
| |
Elimination/Corporate |
(72.9) |
(36.3) |
(30) |
(89) |
|
| Operating
income |
146.8 |
253.6 |
420 |
293 |
| |
JFE Steel |
132.9 |
242.7 |
405 |
270 |
| |
JFE Engineering |
12.8 |
3.1 |
6 |
18 |
| |
JFE Urban Development |
1.0 |
1.4 |
1.9 |
4 |
| |
Kawasaki
Microelectronics (LSI) |
1.2 |
4.9 |
4.6 |
3 |
| |
Elimination/Corporate |
(12) |
1.2 |
2.5 |
(2) |
|
| Ordinary
income |
104.6 |
218.3 |
400 |
250 |
| |
JFE Steel |
91.0 |
208.5 |
385 |
230 |
| |
JFE Engineering |
12.0 |
5.4 |
7.5 |
16 |
| |
JFE Urban Development |
0.3 |
1.3 |
1.7 |
4 |
| |
Kawasaki
Microelectronics (LSI) |
1.0 |
4.5 |
4.5 |
3 |
| |
Elimination/Corporate |
0.3 |
(1.4) |
1.3 |
3 |
|
| ROS |
|
|
|
|
| |
JFE Steel |
4.6% |
9.9% |
16.6% |
11% |
| |
JFE Engineering |
2.6% |
1.6% |
2.0% |
4% |
|
|
|
|
|
|
|
(Reference)
JFE STEEL CHANGES IN ORDINARY INCOME: RESULTS
OF THE YEAR ENDED MARCH 2004 AND THE ESTIMATES
FOR THE YEAR ENDING MARCH 2005
|
| |
|
Billions
of yen |
|
| (Years
ended/ending March 31) |
2003
Actual
2004
Actual |
2004
Actual
2005 Estimated |
|
| Cost
changes |
50.2 |
|
47.0 |
|
| |
Change in costs |
56.0 |
|
49.0 |
|
| |
Labor costs |
(2.0) |
|
(10.0) |
|
| |
Depreciation |
2.0 |
|
7.5 |
|
| |
Fixed costs |
3.0 |
|
(5.5) |
|
| |
Other |
(8.8) |
|
6.0 |
|
| Foreign
exchange |
(15.5) |
|
(11.0) |
|
| Cost
of materials |
(31.7) |
|
(135.0) |
|
| One-time
depreciation |
(20.9) |
|
0.0 |
|
| Volume,
structure, price |
104.1 |
|
239.0 |
|
| Non-operating
profit and other |
9.6 |
|
8.9 |
|
|
Total
change in non-consolidated
ordinary income |
95.8 |
|
148.9 |
|
| Change
in affiliated companies' earnings |
21.7 |
|
27.6 |
|
|
Total
change in consolidated
ordinary income |
117.5 |
|
176.5 |
|
|
|
|
|
|
|
|
| Note1: |
Estimated figures for the
year ending March 2005 are those declared
as of August 30, 2004. |
| Note2: |
Figures for the year ending
March 2006 are calculated at the assumed exchange
rate of ¥110.0=U.S.$1.00. |
|
