Fiscal Year ending March 2010 Fiscal Year ending March 2010 Interim - PowerPoint PPT Presentation

Fiscal Year ending March 2010 Fiscal Year ending March 2010 Interim Results Briefing Interim Results Briefing (Apr.1-Sep.30/2009) (Apr.1-Sep.30/2009) October 30 st 2009 October 30 st 2009

FY2010 Interim Results ( Apr.1-Sep.30/2009 )

Changes in Net Sales & Ordinary Income ( Interim ) Changes in Net Sales & Ordinary Income ( Interim ) （ ¥ 100 mil.） 3,186 3500 3,069 550 Net Sales (right) 2,735 2,845 2,456 2,491 450 2,351 2,141 2500 350 Ordinary Income (left) 1,599 （ ¥ 100 mil.） 221 250 215 1500 175 173 160 155 136 150 500 50 0 0 -50 4-9/2009 Earnings forecast (Ordinary Income) -500 ▲ 51 Published on Apr. 30 ▲ ¥ 15 bil. -150 Revised on Sep. 29 ▲ ¥ 18.5 bil. ▲ 169 -250 -1500 2005/ 2006/ 2007/ 2008/ 2009/ 2005 2006 2007 2008 2009 4-9 10-3 4-9 10-3 4-9 10-3 4-9 10-3 4-9

4- 4 -9/2009 9/2009 Changes in Ordinary Income (Comparison with the initial plan) Changes in Ordinary Income (Comparison with the initial plan) ( ¥ 100 mil.) ( ¥ 100 mil.) 4-9/2009 Ordinary Income ▲150 -100 0 (Plan) ▲5 Raw material price Operating Income /Loss +8 Sales volume ▲10 Sales price Changes ▲16 Sales mix -150 Variable cost -169 ▲2 Fixed cost ▲33 +8 Subtotal -200 +6 Non-Operating income Results Initial 4-9/2009 Ordinary Income ▲１６９ (▲19) Plan (Results)

4- -9/2009 9/2009 Net Sales and Operating Income by Segment Net Sales and Operating Income by Segment 4 （\100 mil.) 4-9/2008 4-9/2009 Result Result y/y basis （Ａ） （Ｂ） (B)-(A) Specialty Steel 1,906 857 -1,049 Net Sales 44 ▲ 128 -172 Operating Income Electronic & Magnetic Net Sales 385 179 -206 Materials 19 ▲ 13 -32 Operating Income Parts for Automobile & 607 322 -285 Net Sales Industrial Equipment 47 ▲ 28 -75 Operating Income Engineering 171 150 -21 Net Sales 10 13 3 Operating Income New Materials 64 30 -34 Net Sales 9 ▲ 20 -29 Operating Income Trading & Service 53 61 8 Net Sales 7 6 -1 Operating Income Total 3,186 1,599 -1,587 Net Sales 136 ▲ 170 -306 Operating Income

4- -9/2009 9/2009 Extraordinary Income/Loss Extraordinary Income/Loss ・ ・ Interim Net Income Interim Net Income 4 ( ¥ 100 mil.) FY2010 Interim results (4-9/2009) ▲１６９ Ordinary income ０ Extraordinary income / loss ▲３ Income taxes and minority interests FY2010 Interim results (4-9/2009) ▲１７２ Net income

Plan for FY2010 (Apr.1/2009-Mar.31/2010)

Production of Specialty Steel and Automobile Mil. Mil. cars MT Production Trends 25 Specialty steel (crude steel) and Automobiles 25 特殊鋼粗鋼生産（左軸） Specialty steel (crude steel) production (left) 20 20 ＫＤセット 15 Knock-down 15 生産 production Automobile production 自動車生産台数 (including knock-down set) （含ＫＤセット） 10 10 Automobile production (thou.cars /y, thou. ton ) Completed cars production 完成車生産台数 FY2009 FY2010(Plan) (right) （右軸） 1st half 2nd half 1st half 2nd half 5 5 Completed cars 5,791 4,203 3,859 4,600 Knock-down products 4,720 3,380 4,025 4,200 Total 10,511 7,583 7,884 8,800 Sales volume of steel products 719 418 358 520 0 0 '90 '95 '00 '05 '08 '09

Scrap Steel Prices Scrap Steel Prices (¥thou. /MT) ＜H2 and Factory bundle scrap prices in Chubu area, Japan＞ 70.0 Ｈ２建値月間平均 Monthly average of H2 65.0 Six-month average of factory bundle scrap 60.0 Six- month average of H2 59.7 55.0 52.9 50.0 52.0 45.0 40.8 40.0 36.8 36.9 35.0 Premises of 2 nd 32.5 33.7 half of FY2010 30.0 33.4 27.0 23.3 25.0 Premises of 2 nd 25.0 21.1 half of FY2010 20.0 19.7 22.0 20.2 18.9 15.0 (plan for Oct.) 13.1 14.7 10.0 5.0 0.0 Premises of Plan '07/4 5 6 7 8 9 10 11 12 '08/1 2 3 4 5 6 7 8 9 10 11 12 '09/1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 2 nd half of FY2010 (10/2009-3/2010)

Premises of Profit Planning for FY2010 （Market Trend） FY2010 1 st half FY2010 2 nd half FY2009 FY2010 2 nd half UNIT Interim Results Premises of plan Initial premises Results (4-9/2009) (10/2009-3/2010) 33.0 19.7 22.0 23.0 Scrap steel ¥ thou. Upper：H2 /MT 39.3 25.0 27.0 28.0 Lower：Factory bundle Nickel 7.48 6.95 8.00 5.5 $/LB （ＬＭＥ） Molybdenum 23.0 11.8 18.0 12.0 $/LB （ＭＷ） Chrome 173.3 87.0 100.0 100.0 ￠/LB （South African price quotation ） Exchange 100.5 96.5 ９０ ９０ ¥ /$ rate Scrap steel‥ Into a correction phase Nickel‥ Market upturn Molybdenum‥ On the rise Chrome‥ Basically plateaued

Changes in Net Sales & Ordinary Income (Quarterly） ） Changes in Net Sales & Ordinary Income (Quarterly （ ¥ 100 mil.） 1,564 1,622 1600 1,355 350 1,038 1200 Net Sales (right) 963 250 855 786 744 800 150 （ ¥ 100mil.） 94 86 [2,001] 400 42 [1,599] 50 15 0 ▲ 15 -50 Ordinary Income (left) ▲ 49 -400 [±0] ▲ 137 ▲ 120 -150 [▲169] -250 -800 FY2009 FY2010 08/ 09/ 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 見通 見通 Plan Plan

FY2010 Net Sales & Operating Income by Segment Net Sales & Operating Income by Segment FY2010 (\100 mil.) 4-9/2009 10/2009- FY2010 Changes from 1st half to 2nd half 3/2010 Plan Results Plan (B) - (A) (A)+ (B) (A) (B) Net Sales 857 1,187 330 2,044 Specialty Steel Operating Income ▲ 128 21 149 ▲ 107 Net Sales 179 227 48 406 Electronic & Magnetic Materials Operating Income ▲ 13 ▲ 13 0 ▲ 26 Net Sales 322 364 42 686 Parts for Automobiles & Industrial Equipment Operating Income ▲ 28 ▲ 5 23 ▲ 33 Net Sales 150 140 -10 290 Engineering Operating Income 13 ▲ 2 -15 11 Net Sales 30 38 8 68 New Materials Operating Income ▲ 20 ▲ 4 16 ▲ 24 Net Sales 61 45 -16 106 Trading & Service Operating Income 6 3 -3 9 Net Sales 1,599 2,001 402 3,600 Total Operating Income ▲ 170 0 170 ▲ 170

FY2010 Changes in Ordinary Income FY2010 Changes in Ordinary Income st half and 2 nd half ) (Comparison between 1 st half and 2 nd half ) (Comparison between 1 ( ¥ 100 mil.) ( ¥ 100 mil.) FY2010 1 st half ▲169 0 0 Ordinary Income Operating Income / Loss Raw material ＋18 price ＋78 Changes (y/y) Sales volume +36 Sales price +20 Sales mix -100 +23 Variable cost ▲5 Fixed cost ▲5 +175 Subtotal ▲1 Non-operating income -169 FY2010 2 nd half ±0 (+169) -200 Ordinary Income (Assumption) FY2010 FY2010 1 st half 2 nd half

Acceleration of Cost Reduction Acceleration of Cost Reduction Reduction of fixed cost （ ¥ 100 mil.) <Changes in Fixed Cost Reduction （Improvement in FY2010 comparison with Forecast Difference (Comparison with FY2009)> Plan FY2009) 250 (\100mil.) Labor cost ＋139 +141 +2 ＋139 +141 +2 199 Retirement benefit 200 ▲26 ▲28 ▲2 ▲26 ▲28 ▲2 cost 150 Depreciation ＋18 +18 0 ＋18 +18 0 FY2010 cost Improvement 100 Repairing cost ＋167 ＋34 +36 +2 ＋34 +36 +2 and others※ 32 50 Total ＋165 +167 +2 ＋165 +167 +2 0 (※Difference between plan and forecast : '08年度 '09年度 special retirement benefit -6, Others +8) FY2009 FY2010 Improvement of variable cost ・ Renovate production process Maximize CC ratio. (Improvement in （ ¥ 100 mil.) comparison with FY2010 Rationalize processes. Forecast Difference FY2009) Plan ・ Pursue high-quality and low cost ＋29 +32 +3 ＋29 +32 +3 Improve total yield. Reduce cost of materials.

Capital Investment Capital Investment （ ¥ 100 mil.） 300 Depreciation 259 Investment 242 250 218 (Based on plan ) 208 200 90 196 79 200 163 161 165 90 136 150 134 Consolidated 49 50 89 100 subsidiaries 169 163 26 118 50 Daido 87 84 63 Steel 0 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 ・ Strategic investments of immediate need had been implemented from FY2006 to FY2009 （Total ¥ 84.3 bil.） ・ From now on, promote streamlining & labor-saving investment for drastic structural reform. ・ Establish profit system under 70％ operation. ［Major capital investment by start-up year］ ～FY2007 FY2008 FY2009 FY2010～ Investment for structural Specialty steel Upgrade CC cast capacity Streamline wire rod billet reform Industrial Improve processing and ＥＳＲ 7000t press, VAR Vacuum ESR equipment parts inspection ability Automobile parts High-speed hot forging machine Ring roll line Upgrade atomizing capacity for New materials New titanium melting furnace powder metal melting

Total Assets, Interest- -bearing Debt, ROA, D/E Ratio bearing Debt, ROA, D/E Ratio Total Assets, Interest ¥ 100 mil. (億円) 6,000 5,593 Total assets 5,256 4,964 4,768 5,000 4,610 4,000 3,000 Interest-bearing 2,000 debt 2,071 1,860 1,803 1,727 1,524 1,000 0 3/2006 3/2007 3/2008 3/2009 3/2010 Results Initial plan '06/3 '07/3 '08/3 '09/3 '10/3 ＲＯＡ 8.6% 6.6% 6.9% 1.6% - Ｄ／Ｅ 0.88 0.92 0.96 1.25 1.26

FY2010 Plan for Dividend per Share FY2010 Plan for Dividend per Share FY2009 FY2010 Interim Year-end Interim Year-end Ordinary income １３６ ８５ ▲169 ▲169 ( ¥ 100 mil.) Net income ６１ ▲８１ ▲172 ▲172 ( ¥ 100 mil) Dividend per To be ４．０ ６．０ ０ share determined ( ¥ /share)