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May 26, 2016

MITSUBISHI STEEL MFG.CO.,LTD.

Announcement of the 2016 Mid-term Business Plan

Mitsubishi Steel Mfg. Co., Ltd. (hereinafter “MSM”) is pleased to announce its “2016 Mid-term

Business Plan,” covering the five years from FY2016 to 2020.

１．Background It is expected that our main customers, the automobile and construction machinery industries and their

surrounding business environment, will witness intensified competition as a result of dynamic change in

the international situation and worldwide economy. In such a situation, as MSM has achieved financial

soundness, this is the time to make a shift toward the next stage where great emphasis is put on global

investment. In order to achieve our group’s continuing growth by further acceleration on this aggressive

shift, MSM has developed the 2016 Mid-term Business Plan, which comprises targets, strategy, and

measures for the upcoming five years from 2016 to 2020.

２．Overview The Mid-term Business Plan for this time highlights the slogan of “The First Step for Coming 10 Years,

Shift from ‘Processing Special Steel’ to ‘Creating Added Value from Materials.’” MSM is committed to operating its business activity in accordance with the following visions and basic directions to achieve the

further growth and the rise of corporate value.

① Slogan

Transform our business model from “Processing Special Steel” into “Creating Added Value from

Materials” over the next 10 years.

② Vision

③ Three Main Directions

(1) Build a worldwide supply chain

This tactic is mainly intended for the Spring Division’s automotive suspension springs, in particular

coil springs and stabilizer bars. Expanding the production base worldwide and product weight

reduction are essential to win the market share in the automobile industry. Along with further

overseas expansion, the need for weight reduction will be pursued at the R&D center, which was

established in April, 2016. This will be realized by boosting development activity utilizing the

◇Strengthen our “Processing Special Steel” business model with its worldwide acceleration and

a synergy between the Steel and Spring Divisions.

◇Generate our “Creating Added Value from Materials” business model with its expansion into

new Industrial sectors, and make the Casting & Forging Division the third profit center.

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know-how in special steel development that the Special Steel Division holds.

(2) Strengthen the “Processing Special Steel” business model and generate benefits from Indonesia

With the establishment of the integrated production model from raw materials to final products in

Indonesia, MSM will seek to expand sales of springs globally with cost competitiveness. The

Special Steel Business will expand its sales of special steel bars mainly in Southeast Asia by

utilizing our first-mover advantage in Indonesia, and furthermore, will consider deployment of

corresponding business models in North America and India.

(3) Build a “Creating Added Value from Materials” business model in our Casting & Forging business

MSM has determined to make our Casting & Forging Division the Third Profit Center in addition to

the Special Steel and Spring Divisions, which currently play dominant roles in the group. This

objective will be attained by building an integrated production model from materials to

subassembly in the growing field of turbocharger products, in addition to consideration of M&A

and/or business collaboration as its measures.

② Target(Consolidated)

2015 Actual 2020 Target 2025 Target

Sales 106.5 billion Yen 170 billion Yen 250 billion Yen

Operating Profit 4.3 billion Yen 9 billion Yen -

Ordinary Profit 3.3 billion Yen 8.5 billion Yen -

ROE 4.2％ 8.0％ 10％ over

Overseas Sales

Ratio 38％ 47％ 65％

For Detailed Information, Please Refer to the Attached Material.

May 26, 2016

～Shift from “Processing Special Steel” to “Creating Added Value from Materials” ～

2016 Mid-term Business Plan （FY2016 to FY2020）

1

Financial Results Overview

2016-2020 Mid-term Business Plan

- Slogan and Vision -

Corporate Objectives

Basic Strategy

Key Initiatives

P.2

P.4

P.5

P.7

P.10

Table of contents

2

After the structural reform of Steel division in late 90s, we generated the growth of sales and profit by strong demand of thriving construction sector and China market in 2000s. The both have declined at the moment.

848 913 803 828 920 1,0081,206 1,214 1,336 1,288

749

1,250 1,3291,062 1,116 1,187 1,065

0

500

1,000

1,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-1130

-3 18 9 40

126 109 13176

-19

89 10837 59 58 33

-132-200

-100

0

100

200Sales

Ordinary Income

Net Income

Financial Results Overview 1 - Growth & Profitability -

3

As a consequence of the financial results in the previous page, the amount of interest-bearing debt has been reduced up to one-fourths, and currently in net cash position(the amount of cash and equivalents exceeds interest-bearing debt)

Although the demand of construction sector, which used to be a growth driver after the recession in 2008, is currently depressed, we resumed investment in overseas business.

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Financial Results Overview 2 - Financial Soundness -

0%

2%

4%

6%

8%

10%

12%

14%

16%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Investment to Sales Ratio

*Investment = Net cash used in investing activities

Company

A

B

C

(Fiscal Year)

In Net Cash Position

(Fiscal Year)

*: Net Debt/Equity ratio = (Interest bearing debt – cash & equivalents) ÷Equity

Net Debt/Equity Ratio

4

Strengthen Our “Processing Special Steel” Business Model with its Worldwide Acceleration and the Synergy between Steel and Springs Divisions.

Generate “Creating Added Value from Materials” Business Model with its Expansion into New Industrial Sectors, and make Casting & Forging Division the Third Profit Center.

Slogan

Vision

Shift from “Processing Special Steel” to

“Creating Added Value from Materials”

The First Step for Coming 10 Years,

2016 Mid-term Business Plan - Slogan and Vision -

5

In FY2020, generate 170 Billion Yen sales and 8% ROE by M&A in casting & forging business and thriving automotive sector.

In FY2025, generate 250 Billion Yen sales and more than 10% ROE with profits from the synergy between Steel and Springs divisions, which is one of the key initiatives in the mid-term business plan.

Corporate Objectives 1 - Mid-term Business Plan -

6

Targets for FY2020: sales; 170 Billion Yen, ROE; 8%, overseas sales ratio; 47%, Targets for FY2025: sales; 250 Billion Yen, ROE; over 10%, overseas sales ratio; 65% Budget 26 Billion Yen to facilities and 21 Billion Yen to M&A from FY2016 to FY2018.

(Billion Yen) 2013 2014 2015 2020 2025

Actual Actual Actual Target Target Sales 111.6 118.7 106.5 170.0 250.0 Operating Profit 4.7 4.9 4.3 9.0 Ordinary Profit 5.9 5.8 3.3 8.5 Overseas Sales Ratio（*1） 32% 36% 38% 47% 65%

ROE（*2） 6.3% 6.2% 4.2% 8.0% Over 10% ROA： Net profit basis 3.0% 3.0% 2.0% 3.0%

ROA：Ordinary profit basis 5.2% 4.9% 2.7% 5.0%

Net D/E Ratio（*3） -0.11 -0.07 -0.06 0.41 Equity Capital Ratio 47% 49% 48% 45% Payout Ratio 23% 26% 37% over 30%

2016~2018 Investment（*4） 1.5 6.9 4.0 47.0 (total) Depreciation 3.1 3.0 3.0 4.7 (average)

*1: Overseas Sales is based on the customer’s country or area, *2: ROE= Net cash／Equity（at year’s end） *3: Net D/E Ratio= （(Interest bearing debt – cash & equivalents) ÷Equity, *4: Investment =Increase of fixed assets + affiliated company’s stocks

Corporate Objectives 2 - KPI and Financial Targets -

7

Three Tactics

In Springs business, build a worldwide supply chain and an integration model(collaboration with steel division)

Build an integration model in casting & forging business and generate benefits from Indonesia.

1. Build a worldwide supply chain Build “Creating Added

Value from Materials” business model in Casting & Forging business.

Strengthen “Processing Special Steel” business model and generate benefits from Indonesia

For FY2020

For FY2025

• Expansion of Spring Business into Europe market

• Technological development in weight reduction

• Generate a synergy between Steel and Springs businesses

• Expand Leaf Springs sales in worldwide and Steel sales in South East Asia

2.

Basic Strategy 1 - Mid-term plan and the Three tactics -

3 2

1 2

3.

• Advance into assembly business in turbocharger market

• Casting by VIM(vacuum induction melting), and sales expansion of alloy powders and precision machined products.

8

1. Build a worldwide supply chain for Springs business • Expansion into Europe market • Technological development in weight reduction

2. Strengthen “Proceeding Special Steel” business model and generate benefits from Indonesia • Generate a synergy between Steel and Springs businesses • Promote Leaf Springs in worldwide and Steel in South East Asia

3. Build “Creating Added Value from Materials” business model in casting & Forging business. • Advance into assembly business in turbocharger market • Casting by VIM(vacuum induction melting), expand sales of alloy

powders and precision machined products.

Strengthen “Processing Special Steel” Model with its Worldwide Acceleration and the Synergy between Steel and Springs Divisions.

Generate “Creating Added Value from Materials” Model with its Expansion into New Industrial Sectors, and make Casting & Forging Division the Third Profit Center. Core

New

M&A

New Supply Chain for turbocharger business

Material

Assembly

Process

Sub Assembly

High Alloy Steel （new facility for VIM）

Casting & Forging

Alloy Powders

Precision Machined Products

MIM

Japan

North America

Europe （New）

Asia

Chiba（mother Plant) ＋ R&D Center

USA, Canada, Mexico(New)

China（Ningbo）＋Stabilizers(New)

India ＋Heavy-Duty coil springs

＋Southeast Asia (New expansion)

Muroran（MSR）

Indonesia（JATIM） ＋Rolling of flat steel& steel bars

Indonesia（Leaf Springs: ISP）

Integrated Production of Leaf Springs

鋼材・ビレット供給 鋼材現地調達化技術支援

Springs

Steel

Basic Strategy 1 - Mid-term Plan and the Details -

Billet Supply and Tech Support for Local Procurement

9

Basic Strategy 2 - Transformation Agendas and Key Initiatives -

Add another agenda of Alliance and M&A on the current one for transformation, and it increases to 5 from 4.

5 agendas are composed of 10 key initiatives.

5 Agendas for Transformation 10 Key Initiatives

Reinforce domestic functions

Accelerate overseas business development

Build an effective organization （Structural reform of Headquarters)

Synergy among the Divisions

Synergy with Partners (Alliance, M&A)

Springs

Steel

Springs

Steel

Steel

Springs

Castings

Castings

HQ

HQ

1. Investment on renewal of Muroran (MSR)

3. Strengthen technological development of Springs

4. Expand Steel sales in Indonesia

6. R&D Center

8. Expand Steel sales in worldwide

7. Expand Leaf Springs sales in worldwide

9. Integrated model of Casting(M&A)

5. Strengthen internal synergy(cross-functional project)

10. Integrated model of Casting (internal manufacturing of material)

2. Worldwide supply chain of Springs

10

R&D/ Corporate Office Key Initiatives 6: R&D Center

• Integrate each division’s technology functions and collaborate with headquarters. Generate synergy among divisions and go along with corporate objectives.

• Enhance R&D (e.g. fundamental research) which will lead mid-and long-term growth

Key Initiatives 5: Generate internal synergy (a cross-functional project among divisions)

• Strengthen management by Corporate office and create a mechanism for internal synergy among divisions through four cross functional projects, Management control, Human resource, Sales & Marketing, and Manufacturing.

• New business and development process management strengthen assessment on new business plans, as advance into overseas markets or M&A, by Corporate office. Dedicated team assesses risk, manages progress and evaluates results.

Established in April, 2016.

Location Chiba Works (Ichihara, Chiba)

Officer in charge Mr. Jun Takayama

R&D Center (Est. Apr, 2016)

Strengthen the Organization

11

Special Steal Business 【Key Initiatives 1】 Investment: invest 9 billion Yen on renewal of old facilities and other

strategies in FY2016 to FY2018 • Bearing the burden of depreciation for the time being, turning to be profitable after FY2018 • After FY2019, initiate plans to investment on cost reduction, productivity and quality control.

【Key Initiatives 4】 Sales Expansion : sell special steel in Indonesia

• Increase sales of special steel made by JTS, especially to local Japanese customers. • Develop materials and manufacturing methods to reduce Spring’s weight.

【Key Initiatives 8】 Overseas expansion： worldwide expansion with Spring’s facilities.

• Develop manufacturing capability in Indonesia and expand into North America and India • Create supply chains and sell our products in respective areas.

R&D : Tie up with new Technology Center, and promote industrialization

0

20

40

60

80

100

120

140

FY 2015 FY 2020 FY 2025

Sales

(Billion Yen) MSM I

MSM40.6

61

Key Initiatives by Division - Steel -

12

Springs Business

Key Initiatives 7 : Expand worldwide sales of Leaf Springs by the vertically-integrated

manufacturing (from material to spring product) in local sites of Indonesia • Improve cost-competitiveness by vertically-integrated manufacturing in Indonesia Expand sales in

Japan, India and Thailand. Enhance to North America.

Key Initiatives 2 : Build a worldwide supply chain for Coil Springs and Stabilizer business. • Early launch of new manufacturing site of Mexico • Expansion to Euro market Expand manufacturing capability by M&A Establish a position as

worldwide supplier Key Initiatives 3 : Boost technological development

• Reduce weight and production cost.

0

10

20

30

40

50

60

70

80

90

FY 2015 FY 2020 FY 2025

Europe

Asia

North America

Japan

Sales (Billion Yen)

48.2

63

Key Initiatives by Division - Springs -

13

91

340

Key Initiatives by Division - Castings & Forgings -

Sales (Oku Yen)

Existing Business

Castings & Forgings Business

Key Initiatives 10: Build an Integrated model, from material to assembly, by melting furnaces of special steel

• Turn to vertically-integrated business model by investing in new VIM furnaces and self-manufacturing master heat as materials for precision forming

• Invest newly in furnaces for mass production of gas-atomized alloy powders and melting furnaces for water-atomized alloy powders

Key Initiatives 9: Expand sales to turbocharger market.

• Build an vertically-integrated business model in both sub-assembly and alloy powder businesses in turbocharger market by utilizing M&A as one of its approch.

Optimize production facilities

• Optimize labor intensive process among factories overseas • Generate an efficient manufacturing process for thriving demand of turbine wheel and nozzle vane.

0

10

20

30

40

50

FY 2015 FY 2020 FY 2025

Sales

(Billion Yen)

MIM M&A

ASSY M&A

Existing Business9.1

34

14

Machinery Business

Forge rolling machinery： Receive customer order as business package, and accelerate overseas business

• Sales of machines in production lines as a package, fully utilizing our strength of technology and development as a total engineering company.

• Sales expansion especially into North America utilizing our facility network including subsidiaries of other divisions, and newly into such areas as China, Korea, Taiwan and India.

Support investments of other divisions • Renewal of Muroran (MSR) and any other affiliated companies.

Protective equipment: Stretching from military markets to commercial market • Expand sales of the products for natural disasters and counter- terrorism commercial sector, backed by

Tokyo Olympic Games and nuclear power plants Environmental machines： Expand with new technology and know-hows in facility operation

• Exhibition and sales expansion of “METHASAURUS”, a sewage treatment plant, by a new technology in Nagasaki.

• Sales expansion of new technology(hydrothermal technics) to such overseas markets as China.

0

5

10

15

20

FY 2015 FY 2020 FY 2025

Sales

(Billion Yen)

General Machinery

Environmental Equipment

Forging Rolling Machinery

Protection Equipment

Steel Structural Products

9.8

16

Key Initiatives by Division - Machinery -

15

Corporate Management

Corporate Governance • Reform the corporate governance system for worldwide business development • Establish a corporate governance committee, and strengthen investors relations activities

Human resource development

• Create and adjust schemes to recruitment and cultivate human resources to make it possible to handle global business.

• Increase diversity in management, including promoting female employees.

Policy of capital and dividend

• Stock buyback, resulting from gradual dissolution of cross-held stocks. • Adopt dividend payout ratio (maintain minimum level of 30% for the moment)

Enhance corporate value of Mitsubishi Steel Mfg. Group and build a firm business foundation.

Key Initiatives by Division - Headquarters -

Any statements in this document, other than those of historical facts, are forward-looking statements about future performance of Mitsubishi steel Mfg. and its group companies, which are based on management’s assumptions and beliefs in light of information currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts.