Kobe Steel’s Fiscal 2016-2020 Group Medium-Term Management Plan

Establishing an Enterprise Based on Three Core Business Areas:

April 5, 2016

1. Introduction

Formulating the medium- to long-term business vision, KOBELCO VISION “G,” in fiscal 2010, Kobe Steel, Ltd. has been actively expanding overseas and working to create products and services that only the Kobe Steel Group can offer.

In addition, the second phase of KOBELCO VISION “G,” the Fiscal 2013-2015 Medium-Term Business Plan, served to start the rebuilding of the company’s business base. The plan focused on strengthening profitability primarily in the steel business and improving the financial performance of the Group. To steadily lay the groundwork for stable profits and business growth, Kobe Steel commenced reforming the structure of its steel business, strategically expanding the machinery businesses, and growing the electric power supply business.

Along with the Fiscal 2016-2020 Group Medium-Term Management Plan, Kobe Steel will start initiatives for a new vision called KOBELCO VISION “G+” (pronounced “G plus”). The new vision aims to further strengthen the Group’s growth strategy centered on the three core business areas of materials, machinery and electric power to establish a solid business enterprise. Kobe Steel plans to focus its management resources in growing fields anticipated to expand over the medium to long term such as weight savings in transportation as well as energy and infrastructure. Kobe Steel plans to increase the original added value of the Kobe Steel Group. By achieving a strong competitive edge, Kobe Steel aims to expand and grow its businesses, while contributing to society.

2. Growth Strategy for the Three Core Business Areas

2.1. Materials Businesses

2.1.1. Initiatives for Weight Savings in Transportation

2.1.2. Improving Profits in the Steel Business (Profit Improvement Effect from Fiscal 2015 to Fiscal 2020)

2.2. Machinery Businesses

2.2.1. Initiatives in the Energy Field

2.2.2. Strengthening Profitability in the Construction Machinery Business

2.3. Electric Power Business

3. Strengthening the Business Base

3.1. Strengthening Corporate Governance

3.2. Human Resource Development

3.3. Strengthening Technology Development Capabilities and Manufacturing Capabilities

4. Financial Strategy

5. Numerical Targets

Targets for the Final Year of Plan (Fiscal 2020)

Fiscal 2020
ROA1 5% or more
D/E Ratio2 1 time or less
For Reference
FY2013 FY2014 FY20153
ROA 3.8% 4.4% 1.1%
D/E Ratio 1.11 times 0.88 times 1.0 times

1. Ordinary income/total assets

2. Interest-bearing debt/net worth

3. Forecast made in the third-quarter financial results announcement (February 2, 2016)

Dividend Policy


Specific Measures by Business Segment

1. Iron & Steel

2. Welding

3. Aluminum & Copper

4. Machinery

5. Engineering

6. Construction Machinery Segment

7. Electric Power

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