Sanyo Special Steel : Overview of Business Results for the Fiscal Year Ending March 31, 2023(April 2022 → March 2023)

Overview of Business Results

for the Fiscal Year Ending March 31, 2023

(April 2022 → March 2023)

April 28, 2023

Table of Contents

1. FY2022 Results and FY2023 Forecast

Outline of Statements of Income

Business Environment

Business Forecast for FY23

Dividend

1. Measures toward shift to EVs
2. Achieving Carbon Neutrality(CN) by 2050
3. Details of Results and Forecast for FY2023

Net Sales and Income(Quarterly), Earning by Business Segment Balance Sheets, Statements of Cash Flows, D/E Ratio

Ordinary Income Variance Analysis (FY21 → FY22 Result, FY22 Previous Forecast → FY22 Result, FY22/3Q → FY22/4Q, FY22 Result → FY23 Forecast)

Review of Performance; OVAKO and SSMI

1. Topics
2. Reference

Trends in Main Market

Net Sales and Income (Fiscal), Capital Expenditure and Depreciation

Details of Statements of Income, etc.

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１. FY2022 Results and FY2023 Forecast

Outline of Statements of Income

Business Results

１. Outline of FY2022 Results

Ordinary income : 28.9 billion yen (+7.2 billion yen)

Ordinary income excluding impact of OVAKO's transient factors : 19.3 billion yen (actual same level as FY2021)

• Profit on YOY basis increased due to improved profit margin at Sanyo and OVAKO, mainly through increase of sales prices by applying iron scrap and energy surcharge and improvement of product mix, partly offset by increase of raw material and fuel prices. The profit margin improvement at OVAKO includes transient factors as well.

(Reference) FY22 Sales Volume･･･for OVAKO; Apr. 2022 to Mar. 2023, for SSMI; Jan. to Dec. 2022
FY22	FY21	Change	Previous Forecast
(A)	(B)	(B) → (A)	('23/2/1) (C)

Change (C) → (A)

Sales Volume (Thousand tons) (Sanyo) (OVAKO) (SSMI)

1,607 894 608 105

Jan.-Mar. 178 Apr.-Mar. 696

1,995 1,002 873 119

-387-108 -265 -14

1,585 894 586 105

+22 -0 +22 +0

2. Statements of Income (FY22 vs. FY21, FY22 Previous Forecast)

(Unit：Billion yen)

Net Sales
Operating Income
Ordinary Income
	ROS
	(Sanyo)
	(OVAKO)
	(SSMI)	*1
	(Amortization of goodwill)
Net Income	*2

FY22 (A)

393.8 28.5 28.9 7.3 10.2 21.1 -0.2 -2.9 20.7

FY21 (B)

	363.3
	21.4
	21.7
	6.0
Jan.-Mar. 2.5	9.9
13.4
Apr.-Mar. 10.9
Jan.-Mar.-0.7	0.4
-3.4
Apr.-Mar.-2.7
15.3

Change (B) → (A) +30.6 +7.1 +7.2 +1.3 +0.3 +7.7 -0.6 +0.4 +5.5

Previous Forecast ('23/2/1) (C) 387.0 22.0 22.0 5.7 10.5 14.0 -0.2 -2.9 16.0

Change (C) → (A) +6.8 +6.5 +6.9 +1.6 -0.3 +7.1 +0.0 -0.0 +4.7

Net Income	23.7		18.6	+5.0		18.9
before amortization of goodwill
(*1) SSMI has changed its name from MSSS in June, 2022.	(*2) Profit attributable to owners of parent

+4.8

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Business Environment

Business Results

Demand

Trends

Raw Material

and Fuel Prices

Influence of destocking in the supply chain in addition to reduction of auto production partly due to semiconductor shortage have sustained. Production for construction and industrial machineries has remained stagnant. While auto production is expected to recover, the impact of inflation on the global economy is increasingly becoming a concern.

Raw material price trend remains still high, though the depreciation of the yen has halted. Energy prices have peaked out in FY2022/4Q and is expected to decline through FY2023.

■Volume of order booked (Specialty steel products)

■Raw Material and Fuel Prices (FY20/1Q＝100)

(thousand tons）	Source: The Japan Iron and Steel Federation		350	Scrap iron(market)
6,000		200%
5,000	Exports	Domestic	Year-on-year rate	150%		Chromium
				Nickel
4,000				100%	300	Electricity				297
			LNG
											278
3,000				50%		* Based on purchase price	270	283
2,000				0%						263	264 252		257	257
						251
1,000					250						246	245
			-50%						239
0				-100%		221					231	238 240	240
					200				201	217	222		197 199
									208		195
	* FY2022/4Q: Sanyo calculated at 1.5 times the total of Jan. and Feb.						170
											172
■Units of automobile sales								161
					151		181
							186		156
(thousand units）					140			169
Source: MarkLines Co., Ltd., ACEA		150					167
25,000	Japan	150%		157 136 134	153
	India	Europe(EU+UK)				139				140
	U.S.	China	Year-on-year rate								132
20,000	100%				109
								121
15,000				50%	100	83		86		101
10,000				0%		77	90	89
5,000				-50%	50
0				-100%

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