[PPT] - Mitsubishi Steel Mfg. Co., Ltd. Financial Results for the First PowerPoint Presentation

SLIDE 1

Mitsubishi Steel Mfg. Co., Ltd. Financial Results for the First Half of the Fiscal Year Ending

March 2018

November 24, 2017

SLIDE 2

1

I. Message

II. FY2017 1st H Results
III. Full-year Forecasts for FY2017
IV. Progress with the 2016 Mid-term

Business Plan

I. Message

SLIDE 3

2

Title Name Responsibilities President Motoyuki Sato Executive Officer Hiroyuki Nagata In Charge of Accounting Department and Information Systems Department Director Masayuki Takashima Director Akira Hishikawa Director Hiroshi Sekine In Charge of Corporate Planning Division, Special Steel Bars Business Director Hiroshi Amano In Charge of Springs Business Director Jun Takayama In Charge of Formed & Fabricated Products Business, Research and Development Center Director Yasuhiko Iizuka In Charge of General Affairs Department, Public Relations and Investor Relations Department, and Purchasing Department Director Akira Yamao General Manager of Sales Division, Special Steel Bars Division, and Parts Sales Division

Full-time Audit and Supervisory Committee Member

Hirokuni Sakamoto

Full-time Audit and Supervisory Committee Member

Yoshihiro Hayasaka Corporate Auditor Shuichiro Sekine Certified Public Accountant Corporate Auditor

Certified Public Accountant

Registered Attorney at Law

Fellow Teruhisa Hanamura General Manager of Spring Division Fellow Tsuyoshi Kuwahara President of PT. MSM Indonesia Fellow Atsushi Yamaguchi General Manager of Corporate Planning Division

Executive organization

※ ※ ☆

☆Newly appointed ※Outside Director

※☆ ☆ ※ ※ ☆

I. Message

SLIDE 4

3

II. FY2017 1st H Results

I. Message

II. FY2017 1st H Results
III. Full-year Forecasts for FY2017
IV. Progress with the 2016 Mid-term

Business Plan

SLIDE 5

4

Summary

FY2016 FY2017 1st H Full-year 1st H Year-on-year change 1st H forecast*

Net sales

483

1,037

579

96 550

Operating income

14

39

17

3 16

Ordinary income

7

32

15

8 14

Net income attributable to owners of parent company

14

35

8

△6 12  Net sales increased due to strong demand in the key customer industries of construction machinery and automotive industries.  Operating income and ordinary income increased due to growth in sales of special steel bars and other factors.  However, due to a delay in the sale of cross-shareholdings, net income fell short of expectations.

(JPY100M)

*Figures announced during announcement of results on April 28, 2017

II. FY2017 1st H Results

SLIDE 6

5

Factors contributing to changes in net sales and operating income

Other Sales growth R&D costs Depreciation Cost of raw materials Improved selling prices

579 17 14

+13 +25 △35 △4 +4

Other 1st H FY2016 1st H FY2017

Operating income

483

+56 +25 +15

Improved selling prices

579

Growth in sales volume

Foreign currency translation adjustments for net sales of overseas

Net sales

(JPY100M) (JPY100M)

1st H FY2017 1st H FY2016

II. FY2017 1st H Results

SLIDE 7

6

(JPY100M)

Net sales/operating income by segment

483 579 96

Operating income

14 17 3

II. FY2017 1st H Results

SLIDE 8

7 3.2 Cost of raw materials Selling prices Other

+3.2 +5.9 △6.0 △1.3 +2.3

Sales growth

4.8

Inventory valuation

f products

Factors contributing to changes in operating income in each segment

4.4

Inventory valuation

f products

Depreciation, R&D costs

*Cost of raw materials △1.8 +11.1 △26.9 △0.2 +5.8

Sales growth

Other +9.7 0.0

Reflected at end of previous period

+9.0

1stH FY2016 Q2 1stH FY2017

(JPY100M)

1stH FY2016 1stH FY2017 Sales 257 Sales 183

11.1

(JPY100M)

 Both improved selling prices and sales growth driven by strong demand in the construction machinery industry contributed to earnings growth.  In addition to increased volume, revaluation gains on inventories, reflecting the rising cost

f raw materials, contributed to earnings

growth.  Sales growth was driven by increased domestic sales and foreign currency translation adjustments on the sales of

verseas subsidiaries.

 Earnings also grew, thanks to sales growth mainly attributable to recovering domestic demand.

Selling prices

Special Steel Bars Business Springs Business

Product composition

* Cost of raw materials (△26.9) includes some use

f inventory before the increase in cost of raw
materials. (+3)

Sales 213 Sales 241

Depreciation, R&D costs

△2.5

II. FY2017 1st H Results

SLIDE 9

8

1.9

Sales growth

Cost of raw materials

Other +0.8 △1.6 +0.3 △0.8 △0.4

Depreciation, R&D costs

Selling prices

3.4

Lower sales △2.3 Product composition

0.4

△0.7

1st H FY2016 1st H FY2017 1st H FY2016 1st H FY2017 Sales 40 Sales 49 Sales 49 Sales 48

0.2

(JPY100M) (JPY100M)

 While sales of defense-related products fell, sales of special alloy powders, mainly for telecommunications devices, remained strong.  Operating income fell due to the strong impact of the rising cost of key alloy steels.  Revenues fell for several reasons, including the impact of slow orders for gas turbine parts used in thermoelectric power generation, a key product line.  Earnings fell due to lower sales. Formed & Fabricated Products Business Machinery Business

Factors contributing to changes in operating income in each segment

II. FY2017 1st H Results

SLIDE 10

9

(JPY100M)

 In addition to growth in ordinary income and operating income, translation gains on assets denominated in foreign currencies contributed to earnings growth.  Net income fell due to lower gains on sales of cross-shareholdings.

FY2016 FY2017 1st H results 1st H results Year-on-year change Operating income

14 17 3

Non-operating income

△7 △2 5

Translation (exchange profit and loss)

△4 1 5

Share of loss of entitles accounted for using the equity method

△4 △3 1

Ordinary income

7 15 8

Extraordinary income/loss

16 1 △15

Income before income taxes

23 16 △7

Tax expenses

△8 △8

Net income attributable to owners of parent company

14 8 △6

Impact of non-operating income/loss and extraordinary income/loss

March 31, 2016 March 31, 2017 September 30, 2016 September 30, 2017 Yen up JPY11.56 Yen down JPY0.54

II. FY2017 1st H Results

SLIDE 11

Dividends

(JPY)

2.5 2.5

*2.5

Dividend payout ratio

(%)

64.8 28.4 47.4

 ROE fell due to a year-on-year decrease in net income.  Since full-year performance forecasts remained unchanged, midyear dividends paid were JPY2.5 per share, as planned.

* Dividends have not been adjusted for the October 1, 2017, share consolidation.

II. FY2017 1st H Results

SLIDE 12

11

III. Full-year Forecasts for FY2017

I. Message

II. FY2017 1st H Results
III. Full-year Forecasts for FY2017
IV. Progress with the 2016 Mid-term

Business Plan

SLIDE 13

12

(JPY100M)

Factors contributing to changes in operating income in 1stQ and 2ndQ

FY2017 2nd H forecast Full-year forecast

1stQ (April–June) 2ndQ

(July–September)

Results

Operating income

Special Steel Bars

7 4 11 10 21

Springs

4 1 5 7 12

Formed & Fabricated Products

1 △1 2 2

Machinery

4 4

Other

1 1 1

Total

12 5 17 23 40

 In Q1, the special steel bars business in part used inventory predating the rise in the cost of raw materials (molten iron). (+JPY300 million)  In Q2, as customary, a North American subsidiary of the Springs business shut down (for planned summer maintenance). (△JPY200 million)  Continuing favorable demand conditions helped secure earnings in the second half. (Earnings in the machinery business are forecast to grow for various reasons, including sales of products for maritime machinery and other new fields.)

III. Full-year Forecasts for FY2017

SLIDE 14

13

(JPY100M)

Full-year performance forecasts

 Demand conditions are positive for the construction machinery and automotive industries.  With rising capital investment and R&D investment targeting future growth, operating income is projected to grow for various reasons, including growth in the sales of special steel bars.  Current plans assume the company will achieve the net income announced at the start of the year based on the sale of cross-shareholdings and other factors.

FY2016 FY2017 Results Forecast Year-on-year change

Net sales

1,037 1,100

63

R&D expenses Depreciation

（△43）（△50）

（△7）

Operating income

39 40

1

Ordinary income

32 35

3

Net income attributable to owners

f parent company

35 30

△5

[Unchanged form figures announced at start of year]

III. Full-year Forecasts for FY2017

SLIDE 15

14

Operating income

Total

Net sales

1,037 1,100

63

Operating income

39 40

1

III. Full-year Forecasts for FY2017

SLIDE 16

15

15 +10 △10 +4 △3 +1 +1 12

FY2017 Forecast FY2016 Results

Cost of raw materials Depreciation, R&D costs

North American cost improvements

Other Selling prices

Decreased North American sales

△6

Inventory valuation

f products

13

Sales growth

Cost of raw materials Other

Inventory valuation

f products

+14 +4 +28 △41 △4 +5 21

Depreciation, R&D costs

△7

Reflected this period Product composition

Selling prices

+9 (JPY100M)

Sales 402 FY2016 Results FY2017 Forecast

 Year on year sales volumes are projected to continue rising in H2.  Selling prices will continue to increase, driven by the rising cost of raw materials.  Strong domestic demand is expected.

(JPY100M)

Sales 467

 While domestic sales are expected to remain strong, constraints on accepting

rders imposed by production

difficulties a few years ago at a North American subsidiary will have an effect.  While North American subsidiaries are making progress on cost improvements, due to the large impact

f decreased revenues, earnings are

projected to fall overall.

Sales 500 Sales 438

Factors contributing to changes in operating income in each segment

Springs Business Special Steel Bars Business

Reflected at end of previous period

III. Full-year Forecasts for FY2017

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16

6 Lower sales Product composition +1 △3 4

4

Depreciation, R&D costs

Other Sales growth

Costs of research on midterm management plan measures

Cost of raw materials

+2 +2 △1 △3 △1 △１ 2

Selling prices

 Earnings are projected to increase due to sales growth in special alloy powders and other products.  The cost of key alloy steels is rising.  Despite countermeasure against surcharges, selling prices still remains unstable from year to year.

(JPY100M)

FY2016 Results FY2017 Forecast

Sales 95 Sales 101

Machinery Business

(JPY100M)

FY2016 Results FY2017 Forecast Sales 94 Sales 85

 The impact of fewer orders for gas turbine parts for thermoelectric power generation will continue. Nevertheless, a part of this earnings shortfall will be covered by sales of other products, including parts for offshore wind farms.  We will strive to increase profits through sales of duct products with short delivery times, maintenance, and

ther activities, as well as sales of

products in new fields related to

ffshore wind farms.

Factors contributing to changes in operating income in each segment

Formed & Fabricated Products Business

III. Full-year Forecasts for FY2017

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17

22 30 H1 17 10 20 30 40 50 60 70 52 31 33 30 H2 19 H2 35 H1 28 63

Depreciation Capital investment

R&D expenses, capital investment, depreciation

FY2015 FY2014 FY2016 FY2017 Forecast

(JPY100M)

8 8 5 10 15 20 25 30

FY2014 FY2015 FY2016 FY2017 Forecast

11 16

H1 8 H2 8

*Includes R&D-related depreciation.

 The Research and Development Center has completed its adoption of various types of assessment equipment. This will contribute to efforts to accelerate strategic R&D.  We plan to move forward with steady capital investments consistent with midterm management plans.

R&D expenses

36

(JPY100M)

Capital investment, depreciation

III. Full-year Forecasts for FY2017

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18

Full-year earnings forecast

(impact of non-operating income/loss and extraordinary income/loss)

 The steel materials joint venture in Indonesia launched sales of flat steel in H1 and will launch sales

f steel bars this half. We anticipate improvements in our share of losses accounted for by the

equity method.  Due to various factors, including the sale of cross-shareholdings, we expect to secure net income in accordance with figures announced at the start of the fiscal year.

(JPY100M)

FY2016 FY2017 Results Forecast Year-on-year change Operating income

39 40 1

Non-operating income

△7 △5 2

Translation (exchange profit and loss)

△1 １

Share of loss of entitles accounted for using the equity method

△7 △4 3

Ordinary income

32 35 3

Extraordinary income/loss

22 11 △11

Income before income taxes

54 46 △8

Tax expenses

△19 △16 3

Net income attributable to owners of parent company

35 30 △5

III. Full-year Forecasts for FY2017

SLIDE 20

 We plan to maintain dividends of JPY60.  We will move ahead with investment in R&D and other segments to achieve the goals of the midterm management plan. We expect to see the results of these investments in the next fiscal year and beyond.

* Dividend forecasts for FY2017 have been adjusted for the share consolidation (10:1) implemented on October 1, 2017.

III. Full-year Forecasts for FY2017

SLIDE 21

20

IV. Progress with the 2016 Mid-term Business Plan

I. Message

II. FY2017 1st H Results
III. Full-year Forecasts for FY2017
IV. Progress with the 2016 Mid-term

Business Plan

SLIDE 22

21

The special steel bars business in five minutes

1. History of the special steel bars business
1917: Tokyo Steel Co., Ltd., established. Launched full-fledged production of special steel with the goal of producing spring steel
n its own.
1994: Mitsubishi Steel Muroran Inc. established (on the former site of Nippon Steel’s Muroran Works in Muroran, Hokkaido) with

annual production capacity of 600,000 tons. Production begins after migration of related manufacturing to the site.

2. Customers and steel types (tons)
4. Strengths of Mitsubishi Steel Muroran Inc.
Drawing on the strengths of an integrated spring maker and harnessing R&D on spring materials, the spring business responds to

demands for characteristics such as high stress and light weight in spring products.

Strengths in steelmaking Strengths in rolling Synergy effects generated by the spring business

The Muroran Works uses blast furnace molten

iron.

Uses ladle refining (LF) and RH degassing to

produce highly refined steel.

Uses Japan’s largest curved radial high-profile

casting equipment to produce high-quality cast steel.

Demonstrates improvements in steel bar internal quality with a 2,500-ton inline press.
Capable of product sizes of 60 mm to 350 mm for steel bars, 95 mm to 350 mm for

square steel, and heat rolling of up to 15 m. The fully automated, high-rigidity, full- continuous V-H low-tension rolling system is used to roll steel bars of high dimensional accuracy.

The fully automated equipment adjustment system increases productivity and cuts

lead times by increasing the opportunities for rolling each size.

3. Where are these steels used?

FY2016

Retail, other Construction machinery Industrial machinery

Automobiles, trucks Springs (internal sales)

Overseas customers Spring steel

Non-heat- treated steels

ther

Carbon steels Alloy steels Special steel for construction machinery use

Manufacturing spring steel as a producer of a wide range of structural steels and springs

Carbon steels

Non-heat- treated steels

Hydraulic cylinders Rod heads Idlers

Spring steel

Coil springs Sprockets

Alloy steel

Swing bearings

Carbon steels

Non-heat- treated steels

Customers Steel types

SLIDE 23

22

5. Global Formed & Fabricated Products supply structure (global production of special steel launched

in Indonesia)

Starting September 2017 Starting December 2016

RH degassing equipment Billet continuous casting equipment Shifting reverse mill Intermediate/finishing mill HV Continuous mill

Steelmaking strengths Rolling strengths

Deploys ladle refining and RH degassing

equipment to deliver purity matching customer needs.

Produces high-quality billets using high-

rigidity casting equipment with optimal electromagnetic churning and cooling.

The rolling plant uses high-productivity, high-quality processes with a fully

automated operation system, ranging from the furnace through the shifting reverse roller, nine continuous V-H mill, cooling floor, and removal. The fully automated system uses a low-tension mill system to roll steel bars of high dimensional accuracy.

The deployment of automated resizing equipment for round bars and flat steel

configured as a single line boosts productivity. Concepts for the Indonesia business

Supplying Japanese-style special steel quality to local users as the first special steel maker to enter the Indonesian market
Greatly reducing logistics costs by shifting materials for leaf springs contracted in Indonesia from Japan to domestic supply
Meeting needs for local procurement of special steel materials by Japanese users in the Indonesian market

Steelmaking process Rolling mill process

The special steel bars business in five minutes

Flat steel for leaf springs Special rolled steel

SLIDE 24

23

1,037 1,１00 1,700 2,500

FY2016 results FY2017 forecasts FY2020 target FY2025 target

Net sales

Role of 2016 mid-term business plan

FY2016 results FY2017 forecasts FY2020 target FY2025 target Net sales

1,037 1,100 1,700 2,500

Operating income

39 40 90

Ordinary income

32 35 85

ROE

5.9％ 5.0％ 8.0％ More than 10%

Overseas ratio

37％ 32％ 47％ 65％

(JPY100M)

2016 mid-term business plan

Shifting from a company that produces and processes special steel to one that creates added value from materials

Long-term vision

(JPY100M)

Priority measures

IV. Progress with the 2016 Mid-term Business Plan

SLIDE 25

24

Summary of 2016 mid-term business plan

Three Tactics

In springs: ① Becoming a global supplier ② Enhancing an integrated model (collaboration with Formed & Fabricated Products) ③ Building an integrated materials model and ② generating results from Indonesia business

① Become a worldwide supplier.

Expand the Spring Business into the European market. Realize weight reductions through technological developments.

③ Build a Creating Added Value from Materials business model within the Casting & Forging business.

② Strengthen the Processing Special Steel business model and generate benefits from Indonesia.

Through 2020 Through 2025

Advance into assembly

perations for the turbocharger

market. Conduct casting by vacuum induction melting (VIM). Expand sales of alloy powders and precision machined products.

Generate synergy between Steel and Springs businesses. Expand leaf springs sales worldwide Expand steel sales in Southeast Asia.

IV. Progress with the 2016 Mid-term Business Plan

SLIDE 26

25

: Slightly behind plans

Progress on priority measures

Measure Details Progress ①

Investment in Muroran renovation, strategic investment

Approx. JPY13 billion in strategic investment and renovation of aged

equipment planned over a period of five years

②

Building a global spring supply chain

Establishing Mexico facility
Advancing into Europe
Considering advances into the growing ASEAN market

③

Enhancing spring technological development capabilities

Efforts to reduce weights and cut costs

④

Expanding sales of Formed & Fabricated Products in Indonesia

Expanding sales of special steel produced at Indonesian joint venture Jatim

Taman Steel, chiefly among Japanese manufacturers operating in Indonesia

September launch of sales of steel bars produced in-house

⑤

Project to strengthen synergies (cross- functional)

Enhancing corporate functions (Establishing an Investment/Finance

Committee, detailed reviews of new business plans, assessments of results)

Building a system for generating Group synergies across business divisions

⑥

Research and Development Center

Consolidating R&D functions and linking them to head-office planning

functions

Adopting various types of testing equipment currently proceeding as planned

⑦

Global sales expansion of leaf springs

Sales to Thailand and India currently proceeding as planned
Considering advances into regions other than Indonesia to meet customer

needs

⑧

Overseas expansion of Formed & Fabricated Products

Considering overseas expansion (India, North America, etc.) to establish an

integrated model with springs; preparing to build a supply chain

⑨

Establishing an integrated materials model (Advancing into TC subassembly)

Carefully considering the future potential of turbochargers in light of factors

such as the rapid worldwide move toward electric vehicles

⑩

Establishing an integrated materials model (In-house production of materials)

Developing an integrated model for master heat and precision machining

materials

Installing new powder gas atomizer furnaces and expanding water atomizer

furnaces

20 40 60 80 100 20 40 60 80 100 20 40 60 80 100

: Proceeding as planned * Progress is calculated by defining the completion of each task in the midterm management plan as 100%. Coloring indicates the extent of progress on the plan. : At least six months behind plans

20 40 60 80 100 20 40 60 80 100 20 40 60 80 100 20 40 60 80 100 20 40 60 80 100 20 40 60 80 100 20 40 60 80 100

IV. Progress with the 2016 Mid-term Business Plan

SLIDE 27

26

[Special steel bars business]

Enhancing the domestic production infrastructure

In October 2017, the special steel bars business at Muroran adopted an operation structure

intended to strengthen cooperation between Mitsubishi Steel and Nippon Steel & Sumitomo Metal Corporation. Mitsubishi Steel will continue to operate the business.

Efforts will seek to improve competitive strengths by developing an optimal production system to

expand production under contract. To enhance synergies at the Muroran Works, in addition to existing renovations and strategic investment, investment will seek to accommodate volumes under contract to Nippon Steel & Sumitomo Metal Corporation.

Muroran renovation investment, strategic investment

Capital investment of JPY13 billion over five years (2016–2020) now underway

Renovation investment: Mainly at rolling plants, renovated equipment such as scale-breaker

transport equipment, large-scale auxiliary drive equipment, and rotating cooler equipment, eliminating downtime (by approx. 6 hrs./mo.) and increased utilization rate by about 1%

Strategic investment: Renovated four ladle surplus preheating burners into energy-saving types,

reducing gas consumed for ladle preheating by 24%

Progress 1: Muroran renovation investment, strategic investment

Plan Completed as of

Sept. 30, 2017

JPY13 billion JPY2.8 billion

IV. Progress with the 2016 Mid-term Business Plan

SLIDE 28

27

[Special steel bars business] Overseas expansion of Formed & Fabricated Products (Indonesia project)

 Integrated production model from materials to products completed in Indonesia

Rolling mill plant:Completed December 2016; production and sales begin of flat steel for leaf

spring use Steady switch of MSR materials from MSM Chiba began in March 2017.

Finishing plant: Competed April 2017; inspections and sales of round bars for sale began in

September.

While the start of sale of round bars was delayed by one month, cumulative sales volumes
ver September to December are projected to increase slightly (by approx. 1 ton).

[Indonesia plants]

Progress 2: Expanding sales of Formed & Fabricated Products in Indonesia

Steelmaking plant Finishing plant Rolling mill plant

IV. Progress with the 2016 Mid-term Business Plan

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28

Progress 3: Building a global supply chain for springs

 The stabilizer business in Mexico and China and large coil spring business in India have begun

peration.

 In Europe, we are currently making progress in paring our range of options.  We are considering advancing into the ASEAN region based on customer advances into the region.  In addition to strong progress on other projects, we are in the process of developing new materials and obtaining approval for technologies to reduce weight.

[Springs business]

IV. Progress with the 2016 Mid-term Business Plan

Europe Examining business expansion Areas the Company plans to enter (Sohna, Haryana, India) Began production in December 2016 (Ningbo, Zhejiang, China) Spring and stabilizer bar manufacturing facility Production began in April 2017 Southeast Asia Business expansion under consideration Chiba Works (Ichihara, Chiba, Japan) (Chennai, Tamil Nadu, India) Production began in August 2017 (Chatham, Ontario, Canada) (Hopkinsville, Kentucky, U.S.A.) (Aguascalientes, Ags., Mexico) Production began in April 2017

MSM NINGBO SPRING CO., LTD.

SLIDE 30

29

Progress 4: Making the Chiba Works a mother plant

Reducing spring weight
Responding to electric

vehicles

Developing high-stress

spring steel

R&D on advanced technologies Engineer training

Enhancing the global development infrastructure Improving technological capabilities while enhancing quality control Establishing a mother plant to create added value from materials based on cooperation among the Special Steel Bars, Spring, and Formed & Fabricated Products businesses and the Research and Development Center.

Research and Development Center [Inside Chiba Works]

Precision casting line

Production to begin in autumn 2018

Trial mass production line

for springs

Stabilizer compact line completed in October 2017

Production technologies

suited to high stress

Stabilizer compact line VIM (vacuum induction melting)

Mother plant

Developing heat-

resistant steel

Improving high-

frequency properties

f soft magnetic

powders

Vacuum induction

melting (VIM)

Production to begin in autumn 2018 Special Steel Bars

Formed & Fabricated Products

Springs

IV. Progress with the 2016 Mid-term Business Plan

SLIDE 31

30

Section Research and development items 2016 2017 2018 2019 2020 Springs

Make springs lighter Develop high-stress spring steel Evaluation testing of local procurement of spring materials

Steel bar

Developing high-purity steel Materials development and mass production with VIM (VIM: vacuum induction melting) Formed & Fabricated Products Developing heat-resistant steel (for turbochargers) Developing special steel powders

Company wide

Address electric vehicles IoT: Greater efficiency of production lines IoT: Developing high value-added products

Turbine wheel proposal, support for materials evaluation

turbochargers Developing heat-resistant steel for gasoline turbochargers F 3D i t ( t i powder) For 3D printers (gas atomizer powder)

p q p Adopting gas atomizer mass production equipment

Progress 5: Research & Development Center (development plan)

. America India,

N. America

Mexico, etc.

Europe etc. Assessment testing

, High-stress spring steel 1,300 MPa , Develop high-stress spring steel. 1,500 MPa Hi h t i t l 1,400 MPa High-stress spring steel 1,400 MPa 1 300 MP l activities 1,300 MPa approval activities High stress and hollowed, crystal grain fined Resin springs R h i t dd i i h l motors Research on suspension systems, addressing in-wheel motors g Master heat for precision casting ) Steel prototypes (spring steel, etc.) Adopting VIM equipment

Breakage prediction systems (suspension problem detection systems) g Visualization, automating testing Traceability marking

Benchmarking against competitors Developing high-purity steel and highly fatigue- resistant steel

g p Improving the performance of soft magnetic powders

p Developing high-performance soft magnetic powders

★EV Project launch

IV. Progress with the 2016 Mid-term Business Plan

SLIDE 32

31

・ In June this year, a new Sales Division was established by separating the sales organizations from the Business divisions

This will make it possible to integrate information on customer needs by switching from a product-based to a customer-based sales organization. This will also lead to sales growth based on the synergies of proposing a broad range of solutions involving the products we offer.

・Adopting a stock incentives system based on performance

This system as adopted for Directors (not including Outside Directors) to increase incentives to improve business performance over the medium to long term and increase corporate value.

・Share consolidation implemented and trading units of shares changed

To increase convenience for investors, the trading unit of Company stock was changed from 1000 to 100 shares. At the same time, a 10:1 share consolidation was implemented to maintain a desirable level of investment units.

Topics

[Sales section]

Steel Sales Department Spring Sales Department

Formed & Fabricated Products Sales Department

Chubu Branch Office Nishi-Nihon Branch Office Mitsubishi Nagasaki Machinery Mfg. Co., Ltd., Tokyo Branch

Sales Division

[Business divisions]

Steel Bar Division Spring Division

Formed & Fabricated Products Division

Chubu Office Nishi-Nihon Office Steel Sales Department Spring Sales Department

Formed & Fabricated Products Sales Department

Before

New

rganization

SLIDE 33

32

・Head office relocated

The head office relocated to Tsukishima, Chuo Ward, Tokyo, in October. The new location features a single-floor layout to promote interpersonal communication. After this relocation, we also share a floor with the Tokyo Office of Mitsubishi Nagasaki Machinery Mfg. Co., Ltd., to promote communication across businesses.

New address: 4F, Daiwa Tsukishima Bldg., 16-3, Tsukishima 4-chome, Chuo-ku, Tokyo 104-8550 Public & Investor Relations Department tel.: 03 (3536) 3118

Notice

Nearest stations: Oedo Line, Kachidoki Station (approx. 3 min. on foot from Exit A2b) Oedo Line/Yurakucho Line, Tsukishima Station (approx. 10 min. on foot from Exit 10)

SLIDE 34

Note on forward-looking statements These materials are meant solely to provide investors with information and are not to be interpreted as solicitations. The forecasts provided in these materials are based on targets and projections and do not constitute promises or guarantees of future performance. Please refer to this information with the understanding that the Company’s future performance may differ from this business outlook. While these earnings materials were prepared based on data believed to be reliable, we cannot guarantee their accuracy or reliability. The Company assumes no liability for these materials, regardless of the purpose for which they are used by investors. We encourage all investors to make their final investment decisions based on their own judgment.

Mitsubishi Steel Mfg. Co., Ltd. Financial Results for the First Half of the Fiscal Year Ending

March 2018

November 24, 2017

I. Message

Business Plan

Executive organization

I. Message

Business Plan

Summary

483

579

14

17

7

15

14

8

Factors contributing to changes in net sales and operating income

Operating income

Net sales

Net sales/operating income by segment

183 257 74

4 11 7

213 24１ 28

3 5 2

48 49 1

2 △2

49 40 △9

3 △3

18 20 2

1 1

△28 △28

483 579 96

14 17 3

Factors contributing to changes in operating income in each segment

Factors contributing to changes in operating income in each segment

14 17 3

△7 △2 5

7 15 8

16 1 △15

23 16 △7

△8 △8

14 8 △6

Impact of non-operating income/loss and extraordinary income/loss

Business indicators and financial conditions

FY2015 FY2016 FY2017 1st H 1st H 1st H

1,156 1,271 1,346

642 636 667

50.3 45.0 45.4

2.8 1.4 2.7

2.0 4.7 2.7

2.5 2.5

64.8 28.4 47.4

I. Message

Business Plan

Factors contributing to changes in operating income in 1stQ and 2ndQ

Operating income

7 4 11 10 21

4 1 5 7 12

1 △1 2 2

4 4

1 1 1

12 5 17 23 40

Full-year performance forecasts

1,037 1,100

63

（△43） （△50）

（△7）

39 40

1

32 35

3

35 30

△5

Performance forecasts by segment

402 500

98

13 21

8

467 438

（△43）（△50）