BUSINESS REPORT

(From January 1, 2023 to December 31, 2023)

THIS IS AN ENGLISH TRANSLATION OF THE BUSINESS REPORT ORIGINALLY PREPARED IN THE KOREAN LANGUAGE (IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION). THIS ENGLISH TRANSLATION IS NOT OFFICIAL AND IS PROVIDED FOR INFORMATION PURPOSES ONLY.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON BOTH CONSOLIDATED AND NON-CONSOLIDATED BASIS IN ACCORDANCE WITH THE KOREAN-INTERNATIONAL FINANCIAL REPORTING STANDARDS (K-IFRS) WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

BUSINESS REPORT

(From January 1, 2023 to December 31, 2023)

To:

Korean Financial Services Commission and Korea Exchange

/s/ Jeong, Ki-Seop

Jeong, Ki-Seop

President and Representative Director

POSCO HOLDINGS INC.

6261 Donghaean-ro,Pohang-si,Nam-gu,Gyungsangbuk-do, Korea

Telephone: +82-54-220-0114

/s/ Han, Young-Ah

Han, Young-Ah

Head of IR team, Senior Vice President

POSCO HOLDINGS INC.

6261 Donghaean-ro,Pohang-si,Nam-gu,Gyungsangbuk-do, Korea

Telephone: +82-054-220-0114

2

TABLE OF CONTENTS

I.   Overview

4

II. Business

12

III.  Financial Statements

45

IV.  Corporate Governance

49
ø

Independent auditors' reports on both Consolidated and Separate financial statements were filed to the SEC respectively on March 18, 2024.

•

Report for consolidated financial statements :

File/Film Number 0001193125-24-070160

•

Report for separate financial statements :

File/Film Number 0001193125-24-070188

3

I. OVERVIEW

1. Scope of Business

A. POSCO HOLDINGS INC. (the "Company", Former POSCO)1)

1) Change of the company name : POSCO (the "Company") approved the vertical Spin-off plan at the Extraordinary General Meeting of Shareholders as proposed on January 28, 2022 and therefore, the name of the company has changed from 'POSCO' to 'POSCO HODLINGS INC.' as of March 2, 2022.

The Company's business scope is as follows :

Before the vertical Spin-off

(Beginning of 2022)

After the vertical Spin-off

(As of the date of submission)

(1) To manufacture, market, promote, sell and distribute iron, steel and rolled products;

(1) To engage in holding business of controlling the business of, and guiding, organizing and improving the management of, subsidiaries by acquiring and owning the shares or ownership interests in subsidiaries (including sub-subsidiaries and companies controlled by such sub-subsidiaries; collectively "subsidiaries");

(2) To engage in harbor loading and unloading, transportation and warehousing businesses;

(3) To engage in the management of professional athletic organizations;
(4) To engage in the supply of gas and power generation as well as in the distribution business thereof and in the resources development business; (2) To engage in the management and licensing of intellectual property rights including brands and trademarks;
(5) To engage in leasing of real estate and distribution businesses; (3) To engage in the investment related to start-up assistance and new technology;
(6) To engage in the supply of district heating business; (4) To engage in market research, management advisory and consulting services;
(7) To engage in marine transportation, processing and sales of minerals within or outside of Korea; (5) To engage in technology research and commissioned services;
(8) To engage in educational service and other services related to business; (6) To engage in matters entrusted by subsidiaries to assist the subsidiaries' businesses;
(9) To engage in manufacture, process and sale of non-ferrous metal; (7) To engage in the supply of gas such as hydrogen and resources development business;
(10) To engage in technology license sales and engineering business; and (8) To engage in leasing of real estate and distribution businesses; and
(11) To engage in all other conducts, activities or businesses which are related, directly or indirectly, to the attainment and continuation of the foregoing purposes (9) To engage in all other conducts, activities or businesses which are related, directly or indirectly, to the attainment and continuation of the foregoing purposes.

4

2. Business Organization

A. Highlights of the Company's Business Organization

(1) Location of the Headquarters

Before the vertical Spin-off

(Beginning of 2022)

After the vertical Spin-off

(As of the date of submission)

Name

POSCO

POSCO HOLDINGS INC.

Location of the Headquarters

6261 Donghaean-ro (Goedong-dong),

Nam-gu,Pohang-si, Gyeongsangbuk

-do, Korea

6261 Donghaean-ro (Goedong-dong),

Nam-gu,Pohang-si, Gyeongsangbuk

-do, Korea

(2) Summary of consolidated subsidiaries

(Number of companies)

Number of consolidated subsidiaries Number of
major subsidiaries
Jan 1, 2023 Increase Decrease Dec 31, 2023
Listed 6 - - 6 6
Unlisted 174 17 6 185 84
Total 180 17 6 191 90
*

The number of consolidated companies above does not include POSCO HOLDINGS

*

Among listed corporations, there is one overseas corporation

(5 domestic corporations and 1 overseas corporation).

*

Newly included : QSONE Co.,Ltd., POSCO PS Tech, POSCO PR Tech, POSCO PH Solution, POSCO GYS Tech, POSCO GYR Tech, POSCO GY Solution, PT AGPA REFINERY COMPLEX, Port Hedland Green Steel Pty Ltd, POSCO MOBILITY SOLUTION POLAND Sp. z o.o., PCC Facilities Component Fund, PT POSCO INTERNATIONAL ENP INDONESIA, POSCO INTERNATIONAL E&P USA Inc., POSCO FLOW CANADA INC., POSCO FLOW (Shanghai) Co.,Ltd, POSCO HOLDINGS CVC 2nd Fund, International Energy Expansion for Technology Innovation Fund

*

Excluded subsidiaries : POSCO Energy, POS-CD PTY LTD, POSCO ICT BRASIL, PGSF, L.P., Future Creation POSCO Startup Fund, Songdo Posco family Housing

5

(3) Major Changes in the Board of Directors

Date of Change

Type of

General
Meeting of
Shareholders

Appointment

Expiration of Term

New

Re-appointment

March 15, 2019 Ordinary - 

Representative Director Chang, In-Hwa

- 
- 

Inside Director

Chon, Jung-Son

- 

Inside Director

Kim, Hag-Dong

-  - 

Inside Director

Jeong, Tak

-  - 
-  - 

Representative Director
Oh, In-Hwan

-  - 

Inside Director

Yu, Seong

Outside Director

Pahk, Heui-Jae

-  - 
- 

Outside Director

Kim, Shin-Bae

- 
- 

Outside Director

Chung, Moon-Ki

- 
-  -  Outside Director Lee,
Myoung-Woo
March 27, 2020 Ordinary -  Representative Director Chang, In-Hwa - 
- 

Inside Director

Chon, Jung-Son

- 
- 

Inside Director

Kim, Hag-Dong

- 
- 

Inside Director

Jeong, Tak

- 
- 

Outside Director

Chang, Seung-Wha

- 
March 12, 2021 Ordinary -  Representative Director Choi, Jeong- Woo - 
-  Representative Director
Kim, Hag-Dong 		- 
-  Representative Director
Chon, Jung-Son 		- 
- 

Inside Director

Jeong, Tak

- 
Inside Director Chung,
Chang-Hwa 		-  - 
-  -  Inside Director Chang,
In-Hwa
- 

Outside Director

Kim, Sung-Jin *

- 

Outside Director

Yoo, Young-Sook

-  - 

Outside Director

Kwon, Tae-Kyun

-  - 
-  - 

Outside Director

Kim, Joo-Hyun

6

Date of Change

Type of

General
Meeting of
Shareholders

Appointment

Expiration of Term

New

Re-appointment

-  - 

Outside Director

Bahk, Byong-Won

March 18, 2022 Ordinary -  Representative Director Chon, Jung-Son - 
- 

Inside Director

Chung, Chang-Hwa

- 

Inside Director

Yoo, Byeong-Og

-  - 
-  - 

Representative Director

Kim, Hag-Dong

-  - 

Inside Director

Jeong, Tak

Non-standing Director

Kim, Hag-Dong

-  - 
- 

Outside Director

Pahk, Heui-Jae

Outside Director

Yoo, Jin-Nyong**

- 

Outside Director

Sohn, Sung-Kyu**

- 
- 

Outside Director

Kim, Shin-Bae

- 

Outside Director

Chung, Moon-Ki

March 17, 2023 Ordinary

Representative Director

Jeong, Ki-Seop

Representative Director

Chon, Jung-Son

Inside Director

Yoo, Byeong-Og

Inside Director

Kim, Ji-Yong

Inside Director

Chung, Chang-Hwa

Non-standing Director

Kim, Hag-Dong

Outside Director

Kim, Joon-Gi

Outside Director

Chang, Seung-Wha

*

The re-appointed Outside Director Kim, Sung-Jin was elected as an Outside Director to become an Audit Committee Member

**

The Outside Director Yoo, Jin-Nyong and Sohn, Sung-Kyu were appointed as Audit Committee Member at the General Meeting of Shareholders held on March 18, 2022.

7

(4) Changes of the Major Shareholders of POSCO HOLDINGS INC.

Since January 30, 2007, National Pension Service holds the largest number of common shares of POSCO HOLDINGS INC.

(a)

From SK Telecom to National Pension Service

(b)

Date of Change: January 30, 2007

For further reference, please refer to the public disclosures of changes in common shares of the largest shareholder on Financial Supervisory Service website (http://dart.fss.or.kr)

B. POSCO HOLDINGS' Merger, Acquisition and Handover of Businesses

(1)

January 2019 : Small scale merger of POSCO Processing & Service Co., Ltd into POSCO

(2)

September 2019 : Handover of business right of LNG terminal to POSCO ENERGY

(3)

September 2019 : Small scale merger of By-Product Gas Generation Business from

POSCO ENERGY into POSCO after spin-off

(4)

January 2022 : Handover of logistic related business to POSCO Terminal

(5)

March 2022 : Completion of Vertical Spin-off

Classification

Company Name

Business Unit

Surviving Company POSCO HOLDINGS INC. Development of future business portfolios and management of group's businesses
New Company POSCO Production and sale of steel

8

3. Changes in Share Capital

There has been no changes in share capital in the last 5 years.

(Unit : Share, KRW/Share, In millions of KRW)

Type

Details As of December 31,
2023 		As of December 31,
2022 		As of December 31,
2021

Common Stock

Total number of
issued shares 		84,571,230 84,571,230 87,186,835
Par value 5,000 5,000 5,000
Share capital 482,403 482,403 482,403

Preferred Stock

Total number of
issued shares 		-  -  - 
Par value -  -  - 
Share capital -  -  - 

Others

Total number of
issued shares 		-  -  - 
Par value -  -  - 
Share capital -  -  - 

Sum

Share capital 482,403 482,403 482,403
ø

Due to the decision to cancel treasury shares by the resolution of the board of directors on August 12, 2022, the total number of shares issued by the company will decrease from 87,186,835 to 84,571,230, and there will be no change in capital.

4. Other Information Regarding Shares

A. Total Number of Shares    

(As of December 31, 2023)

Authorized Shares

Issued Shares

200,000,000

84,571,230
ø

Currency of the Republic of Korea is Korean Won ("KRW").

ø

Par Value: KRW 5,000 per share

ø

Due to the decision to cancel treasury shares by the resolution of the board of directors on August 12, 2022, the total number of shares issued by the company will decrease from 87,186,835 to 84,571,230

B. Treasury Stock Acquisition and Disposal

(As of December 31, 2023)

Method of Purchase

Type Beginning
Balance		 Increased Decreased Cancelled Ending
Balance		 remark

Direct

Common

Stock

5,406,179 -  27,030 -  5,379,149 1 ),

Trust Contract

3,315,874 -  -  -  3,315,874

Total

8,722,053 -  27,030 -  8,695,023 2 )

9

*

The number of treasury stock has decreased from 8,722,053 to 8,695,023 due to provision of stock grant to the executive officers of POSCO Holdings and subsidiaries

*

Aforementioned number of treasury stocks includes 3,211,795 treasury stocks which are subject to the exchange of exchangeable bonds issued by the company on September 1, 2021. The treasury stock subject to this exchange is finalized at the time the exchange right is exercised and is currently deposited with the Korea Securities Depository.

5. Voting Rights

(As of December 31, 2023)

Classification

Number of Common Shares Remarks

(1) Number of Issued Shares

84,571,230 - 

(2) Shares without Voting Rights

8,695,023 Treasury stock

(3) Shares with Voting Rights

75,876,207 - 

6. Earnings and Dividends

(In millions of KRW)
2023 2022 2021

(Consolidated) Profit*

1,698,092 3,144,087 6,617,239

(Separate) Profit

799,578 -467,852 5,181,227

Earnings per Share

(Consolidated, KRW)

22,382 41,456 87,330

Cash Dividend Paid

758,762 910,190 1,285,635

Pay-out Ratio

(Consolidated,%)

44.7 28.9 19.4

Dividend per Share (KRW)

10,000 12,000 17,000

Dividend Yield (%)

2.4 4.1 6.0
*

(Consolidated) Profit : Profit attributable to owners of the controlling company

**

Earnings per Share is based on consolidated financial statement prepared in K-IFRS    

10

7. Stock Prices and Trading Volumes

The stock prices and trading volumes of POSCO HOLDINGS INC. for the last 6 months are as follows.

A. The Korean Stock Market

(KRW/share, In thousands of shares)
July
2023		 August
2023		 September
2023		 October
2023		 November
2023		 December
2023

Common

share

Highest Price 658,000 621,000 603,000 518,000 522,000 499,500
Lowest Price 394,000 546,000 529,000 411,500 402,500 447,000
Average Price 494,667 577,273 568,579 477,237 464,750 474,868

Trading

volume

Daily highest 11,632 3,092 1,832 2,323 3,341 1,346
Daily lowest 705 749 636 624 295 384
Monthly 66,389 30,875 20,082 21,570 17,403 12,872

B. New York Stock Exchange

(USD/ADS*, In thousands of ADS*)
July
2023		 August
2023		 September
2023		 October
2023		 November
2023		 December
2023

American

Depositary

Share

(ADS)

Highest Price 131.86 118.89 113.66 100.51 97.00 95.56
Lowest Price 74.61 102.44 99.40 76.51 76.47 85.50
Average Price 97.15 109.12 106.23 90.00 89.21 91.71

Trading

volume

Daily highest 2,880 566 452 417 817 267
Daily lowest 74 116 75 86 27 49
Monthly 13,237 5,888 3,753 5,186 4,009 2,733
*

ADS : One American Depositary Share representing one-fourth of one of Common Share

11

II. BUSINESS

1. Overview

A. Classification of Business

We classify our business into six segments:

Steel segment, Green Infrastructure (Trading segment), Green Infrastructure (Construction segment), Green Infrastructure (Logistics and etc. segment), Green Materials and Energy, and Others.

B. Summary of Financial Status of Segment

(In millions of KRW)

Business

Segment

2023 2022 2021
Sales Operating
Income (Loss) 		Sales Operating
Income (Loss) 		Sales Operating
Income (Loss)

Steel

63,538,698 2,556,779 70,649,647 3,236,220 63,548,935 8,365,445

Green Infrastructure

(Trading)

42,943,752 1,133,512 49,589,760 872,279 45,290,449 619,675

Green Infrastructure

(Construction)

10,267,503 197,352 8,885,491 293,344 7,412,514 428,669

Green Infrastructure

(Logistics and etc.)

3,945,953 202,010 7,425,508 377,919 2,914,400 195,474

Green Materials and Energy

4,821,886 -161,334 3,388,760 143,452 2,089,162 112,641

Others

1,562,214 1,106,332 1,169,536 843,682 1,784,321 59,252

Total

127,080,006 5,034,651 141,108,702 5,766,896 123,039,781 9,781,156
*

It is based on aggregated basis including internal transactions among affiliates.

*

Since POSCO Energy has been merged into POSCO International as of January 2023, the performance of POSCO Energy prior to the merger has been included into Green Infrastructure (Logistics and etc.).

12

2. Business Status of Segments

A. Steel

There are 83 consolidated companies in the steel segment, including POSCO and POSCO Steeleon, and overseas companies including PT.Krakatau POSCO in Indonesia, POSCO (Zhangjiagang) Stainless Steel Co., Ltd. in China and overseas processing centers.

∎ POSCO

(1) Summary of Business

POSCO produces steel materials such as hot rolled, cold rolled and stainless steel at Pohang Steelworks and Gwangyang Steelworks which is the largest steel mill in the world.

The steel industry is a key industry that has taken pivotal roles in the national economic development. Steel is used as a basic material in various manufacturing fields such as automobiles, shipbuilding, home appliances, and construction, and has a close connection with the front industry due to its characteristics.

In 2023, the cumulative global crude steel production increased year-on-year due to robust demand from emerging economies such as India, despite sluggish industrial economies of developed countries and a slump in the Chinese real estate market.

Global Crude Steel Production

(Millions of Tons, %)

Crude Steel Production

2021 2022 2023

Global

1,951 1,832 1,850

Korea

71 66 67

(Ratio)

(3.6 %) (3.6 %) (3.6 %)
ø

Source: World Steel Association (www.worldsteel.org)

The steel industry is affected by the business cycle and the ups and downs of the demand industry.

Therefore, steel demand is not only related to trend of market economy, but also to situation of demand industries like shipbuilding, automobiles, home appliances, constructions and etc.

The steel industry is a capital and technology-intensive industry that requires enormous initial investments. Steel companies are focusing on reducing production costs and securing price competitiveness.

POSCO aims to maintain its competitive edge in the domestic market by strengthening long-term partnerships with key and leading customers and responding to global protectionism based on comprehensive response systems such as marketing, R&D, technology services, and production. In addition, we are expanding steel processing centers to meet the needs of global front industries such as automobiles, shipbuilding, home appliances, and construction, while strengthening our global sales network by operating steel production bases Indonesia(upstream) and India(cold-rolling mills). We are continuously considering expanding overseas production capacity, including the joint venture of Hebei Steel and Steel in China in 2023.

13

The company plans to upgrade its customer and market structure by expanding its high value-added World Top Premium products, while responding to customers' diverse needs by launching an eco-friendly product line Greenate and developing hydrogen-reduced steel HyREX technology in line with the global low-carbon trend.In the steel industry, automobiles, shipbuilding, and construction are the main demand industries, and steel products are used as raw materials for these demand industries. In terms of sales, the proportion of domestic sale is 55% of total sales and export sales are around 45%, and by export region, the proportion of Southeast Asia, Japan, Europe and China is high. POSCO maintains order based production and sales system, and to secure stable sales, the proportion of direct sales to customers in domestic sales is maintained at about 60%. POSCO continues to strive to strengthen its competitiveness in the midst of rapidly changing business environments such as the transition to a low-carboneco-friendly era, accelerating technological innovation, and strengthening ESG management. The company's competitive advantages include followings:

First, POSCO is promoting great transformation from current steelmaking process to a low-carbon,eco-friendly process.

Second, POSCO will upgrade 'eco-friendly future product' portfolio.

We will proactively respond to the growing demand for eco-friendly products and lead the high value-added market with the best innovative products. In order to contribute to the decarbonization of customers and society, we are expanding our low-carbon product lineup based on Greenate, a carbon-neutral master brand, and from 2026, we plan to produce high value-added products that reduce carbon emissions using a newly established electric furnace.

Third, POSCO implement 'Meta-POSCO' through digital transformation. Since 2017, the company has been gradually implementing Smart Factories that optimize, automate, and intelligentize facilities by using innovative digital technologies such as IoT, Big Data, and AI and Digital Twin models. Through deep learning that extracts optimal results by converting major variables that determine the state of the furnace into big data, Pohang Steelworks' furnace #2 has been turned into an AI furnace.

Lastly, POSCO will realize a safe workplace without accidents and continue to strengthen ESG management. Safety is the highest value and corporate culture pursued by the company, and we are upgrading our safety system so that the company's safety culture can leap to the highest level in the world. We are promoting the development of smart safety solutions using AI and IoT, and discovering potential risks in the field, strengthening safety activities that comply with standards.

POSCO, As an unlisted company, has no obligation to establish special committee under the board of directors, but it has not only established an ESG committee to strengthen its external communication with interested parties but also established an audit committee to support ESG governance.

(2) Market Share

(Millions of Tons, %)

Category

2023 2022
Production Market share Production Market share

Crude Steel Production

67 100 % 66 100 %

POSCO

36 53 % 34 52 %

Others

31 47 % 32 48 %
ø

Source: World Steel Association (www.worldsteel.org)

14

∎ POSCO STEELEON

POSCO Steeleon provides differentiated value through technology development and new market development with design/solution provision in both domestic and overseas surface treatment steel market.

The surface-treated steel market is divided into a general-purpose material and a high-end material market, and the general-purpose material market is highly competitive due to technological leveling and the influx of low-priced goods from China. On the other hand, we believe that the high-end material market can not only create high added value but also grow in terms of market size.

Though there are oversupply of domestic and foreign steel products and sluggish demand industries, POSCO Steeleon is striving to secure a stable profit base and expand market share by improving the competitiveness of high valued-added products such as aluminum coated sheets, high corrosion resistance galvanized steel sheets, Print/Lami color steel sheets and etc.

POSCO Steeleon is striving to strengthen its competitiveness in the high-end construction/exterior materials through research and development based on customers. In addition, POSCO Steeleon is preparing to expand its overseas business by securing a bridgehead in Southeast Asia, where rapid growth is expected through the operation of color steel sheet production line (50,000 tons) and coated steel sheet production line(20,000 ton) in Yangon, Myanmar.

∎ POSCO M-TECH

(1) Summary of Business

POSCO M-TECH is a specialized supplier of steel products packaging and steel supplementary materials such as aluminum deoxidizers which is needed to remove oversaturated oxygen in steelmaking process. In case of steel products packaging, POSCO M-TECH continuously develops packaging machines and materials. The cost competitiveness of its steel packaging business has strengthened by reducing packaging materials and developing technology to improve packaging quality. The steel packaging business has enhanced cost competitiveness by reducing packaging materials and improving packaging quality, while the packaging equipment business has focused on developing automation equipment for packaging.

(2) Business Areas

Business Areas

Major Goods and Services

Major Customer

Steel raw material business

Aluminum deoxidizer pellets, mini pellets, ingots and etc.

POSCO
Steel product packaging business

Steel packaging service, maintenance of packaging facilities and etc.

Engineering business

Steel Packaging Engineering, Mechanical Equipment and etc.

Consignment operation business Ferromanangan factory and etc.

15

(3) Market Share

(Tons)
2023 2022 2021

Category

 Sales Volume Market share Sales Volume Market share Sales Volume Market share

POSCO M-TECH

31,984 44.7 % 31,245 44.0 % 34,846 49.0 %

PJ Metal

39,600 55.3 % 39,700 56.0 % 36,257 51.0 %

Total

71,584 100.0 % 70,945 100.0 % 71,103 100.0 %
ø

It is difficult to calculate exact market share of Aluminum deoxidizers as total production and sales volume of the domestic market are not counted.

B. Green Infrastructure [Trading segment]

There are 39 subsidiaries in trading segment including POSCO International, 26 subsidiaries in construction segment including POSCO E&C and 14 subsidiaries of logistics and etc. segment including POSCO Flow and POSCO DX.

∎ POSCO INTERNATIONAL

(1) Market Share

(Millions of US Dollars)

Category

2023 2022 Growth Rate

All Trading Companies in Korea

632,384 683,585 -7.49 %

POSCO International Corp.

9,270 10,018 -7.47 %
ø

Source: Korea International Trade Association (www.kita.net)

(2) Summary of Businesses

While focusing on trading which is its main business, POSCO International is engaged in resource development, production processing, and infrastructure development and operation.

POSCO International and its consolidated subsidiaries engage in three major businesses: trading, energy and investment(food resources, motor core for EV, mineral resource development and etc). In addition, POSCO International maintains a global network of over 80 subsidiaries and branches in major overseas regions.

16

[Global Business Sector]

•

Trading business : POSCO International has not only been securing stable supply line in steel business but also been actively developing and expanding new businesses such as secondary battery business, agro-commodities, and industrial materials based on the know-how accumulated over a long period of time in the traditional trading business and through its vast overseas networks. POSCO International is also carrying out agro-commodities trading and food resource development projects in order to secure sustainable future food resources. As a result, the company has diversified its sales outlets in Korea, China, Southeast Asia, and MENA, while expanding food import volume.

•

Motor core business: Together with POSCO Mobility Solution which is a subsidiary of POSCO International, POSCO International started engaging into motor core business for EV. It is expected to expand motor core production to 7 million by 2030.

•

Palm farm in Indonesia: POSCO International is developing a palm plantation in Indonesia and gradually expanding sales by establishing a local palm oil production system. In December 2022, another CPO (Crude Palm Oil) mill, enabling the production of approximately 250,000 tons of CPO annually is newly established, and the company is pursuing environmentally friendly palm farming through RSPO certification.

•

Grain Terminal in Ukraine : In 2019, POSCO International acquired a 75% stake in a Ukrainian grain export terminal capable of shipping 2.5 million tons annually, making us the first Korean company to enter the Ukrainian grain terminal business. Although operations have been suspended due to the Russia-Ukraine conflict, POSCO International is gradually resuming operations as the situation gets better.

•

Textile Business in Uzbekistan

POSCO International Textile in Uzbekistan has 4 manufacturing factories located in the city of Fergana, the villages of Tashlak, Kumtepa and a branch in the city of Bukhara. In order to secure raw cotton procurement and enhance the competitiveness of the cotton business, the raw cotton cluster project is planned to continue to be expanded.

•

Ambatovy Nickel Mine Project : POSCO International has been participating in the Ambatovy Nickel Mine Project, the world's third-largest nickel mine in the mineral resource development project with a 6.1% stake. In addition, POSCO International is searching for new opportunities in EV battery material business.

•

Australian Narrabri bituminous coal mining project

POSCO International has 5% stake in the Australian Narabri Coal Production Project, which began commercial production in October 2012, producing about 6 million tonnes of bituminous coal per year.

•

Myanmar hotel business : POSCO INTERNATIONAL AMARA Co., Ltd., located in Yangon, Myanmar, owns the Lotte Hotel Yangon in Myanmar. The Lotte Hotel Yangon currently consists of 343 hotel rooms and 315 residences for long-term stay guests. Since its opening in September 2017, the hotel has been in operation under a 10-year hotel management contract with Hotel Lotte.

17

[Energy Sector]

The company has classified its business units into the energy sector, including the Gas Business Unit, Energy Project Development Unit, Energy Infrastructure Unit, and domestic and overseas investment corporations related to power generation such as SENEX Energy.

•

Myanmar Gas Field business : Since its production of the first gas in July 2013, gas fields supplies an average of approximately 500 million standard cubic feet of gas per day. In addition, through the second phase of development undertaken to maintain stable gas production, the addition of seven gas production wells was successfully completed in August 2022. In addition, from February 2021, as part of the third phase of the development project, the construction of the gas boosting platform EPCIC for the production of low-pressure gas in the reservoir was completed in December 2023, and the platform will be operated after completing the test drive in the first half of 2024.

•

LNG Business : The company began LNG trading in 2017 based on Its expertise in developing international energy sources, specialty in trading, and the LNG demand of POSCO Group. In 2023, POSCO international merged with POSCO Energy and obtained an additional value chain across all aspects of the LNG business, from LNG import terminals to generation.

•

Onshore gas business in Australia : To execute the group's carbon neutrality and hydrogen business strategies in a timely manner and expand its existing energy business centered in Myanmar, the company has acquired Senex Energy Limited in Australia. Senex Energy Limited is an energy company located in Brisbane on the east coast of Australia, producing gas from onshore oil and gas fields in eastern Australia for domestic and overseas customers. Recognizing the rising gas demand and high gas prices in the east coast of Australia, the company has launched additional development projects with a targeted three-fold increase in gas production by 2025.

[New business investment]

In addition, POSCO International is searching for new opportunities in four new growth businesses areas which include smart farm, green materials, green mobility and hydrogen.

B. Green Infrastructure [Construction segment]

∎ POSCO E&C

POSCO E&C engages in primarily 3 businesses: plant, civil engineering(infrastructure) and construction.

Plant business is the construction of integrated steel mills, EPC projects and industrial plants.

The plant market is expected to continue to grow in the Middle East, Latin America, Southeast Asia, and the CIS region, and domestic companies are actively entering overseas markets.

Plant business used to focus on small investment of existing facilities but there will be more new investments in Electric furnace and hydrogen reduction process followed by global green trend. As nuclear power generation is getting attention again, the development of small nuclear power plants is expected to become active.

The civil engineering business is about constructing expressways, railroads and bridges. According to the government's policy to strengthen regional competitiveness, the construction of regional hubs such as Gadeokdo New Airport, Daegu Gyeongbuk New Airport, and Jeju 2nd Airport will begin, and the road network expansion project such as the Seoul Metropolitan Railway (GTX) will continue to connect major metropolitan areas. It is expected that more favorable overseas construction market would be created for the domestic construction companies as demand of infrastructure development is increasing in Asia, Middle East, Americas as well as in Europe.

18

Housing demand is shrinking after a sharp rate hike, and number of unsold households are increasing around areas where supply has been concentrated. Recently, concerns have been growing that new orders will shrink as funding has been suspended due to the financial market crunch. Housing market conditions rapidly deteriorated due to sudden interest rate increases, rising construction costs, and a slump in the construction PF market. In terms of overseas market, domestic construction companies have entered Southeast Asia, where urbanization is actively underway, but for now, construction companies' risk management is expected to be the top priority due to growing economic uncertainties around the world.

POSCO E&C has the top class construction capabilities, product development capabilities, and commercialization capabilities in the field of high-rise buildings and large-scale new city development. Representatively, POSCO E&C is leading the Songdo International Business City Development Project and have successfully completed high-rise/supersize landmark projects such as POSCO Tower Songdo, Busan Haeundae LCT, and Yeouido Park One.

In Overseas, POSCO E&C continues to seek new business opportunities based on the experience in developing and constructing various buildings such as hotels, offices, and residences in Southeast Asia such as Vietnam, China, Myanmar, and the Philippines.

B. Green Infrastructure [Logistics and etc. segment]

∎ POSCO DX

POSCO DX has both IT and OT technologies and has secured competitiveness in its manufacturing-based business on the convergence of IT and OT technologies. When domestic ICT market size is estimated to be KRW 39 trillion, POSCO DX is expected to take about 3.0% of domestic ICT market share (ICT market for local corporates only). POSCO DX will continue to adopt POSCO Group's capabilities in digital transformation, logistics automation, and industrial robot system engineering businesses to create new success stories for sustainable growth even in business environments lots of uncertainties. Based on POSCO Group's One IT strategy, POSCO DX is expecting to add value by developing IT infrastructure and strengthening the competitiveness of Smart Factory business.

The experiences operating POSCO's Smart Factory based on big data, IoT and AI-based platform, led the company to have a strength in the area of continuous and automation process. With its experiences in POSCO's smart factory construction, POSCO DX is planning to support the mass production system of EV battery materials. In addition, POSCO DX will expand the logistics automation business market with the successful completion of the logistics business in progress. While diversifying logistic business sectors POSCO DX will actively participate new airport BHS project and contribute to the groups' advancement of the group's logistic system.

C. Green Materials and Energy

Green Materials and Energy segment include the business related to EV battery materials, such as lithium, nickel, cathode material, anode material, and recycling, and there are a total of 16 subsidiaries, including POSCO Future M and POSCO Argentina.

19

∎ POSCO Future M

POSCO Future Moperates mainly 2 businesses: basic material business and energy material business.

[Basic industrial materials business]

•

Refractory production : Refractories maintain their chemical properties and strength even at high temperatures making them indispensable materials for industrial facilities including the furnaces in steelworks and petrochemical plants. In the refractory business, POSCO Future M produces and maintains refractories. In order to keep price competitiveness in the domestic market, the company has expanded its business to China.

•

Lime business : In the quicklime & chemical business, POSCO Future M is currently doing consignment operation of cokes plants where purify coke oven gas (COG) in Pohang and Gwangyang. With the chemical products generated in during the purification process, POSCO Future M operates cokes business.

[Energy material business]

In the energy material business, POSCO Future M provides cathode and anode materials which are the main components for secondary cell: cathode, anode, electrolyte and separation membrane. It is planned to expand its production of natural graphite anode materials from 74 thousand ton/year in 2023 to 182 thousand ton/year in 2030. In addition, artificial graphite production is expected to have a production capacity of 153 thousands ton/year in total by 2030. Furthermore, cathode material production is expected to increase from 155 thousands ton/year to 1,000 thousands ton/year by 2030. Most of the precursors that are put into the production of anode materials are currently sourced from China, but POSCO Future M plans to achieve a high level of internalization by securing 460 thousand tons/year production capacity by 2030. Due to environment-friendly policy with less carbon emission worldwide, demands for Energy Storage System and Electric Vehicle are expected to grow continuously.

According to SNE Research, the global secondary battery market (lithium-ion secondary battery market) grew 38.6% annually to 705.5 GWh in 2023. It is also expected to grow by approximately 5.2 times to 3,675 GWh in 2030. Along with this growth, in April 2023, POSCO Future M also signed a long-term contract worth approximately KRW 30 trillion for cathode materials. Furthermore, POSCO Future M has recently diversified the sales sources including Samsung SDI and plan to supply approximately 40 trillion won worth of cathode materials (NCA) over the next 10 years.

The secondary battery market for electric vehicles is expected to grow due to China's strong electric vehicle industry development policy, European CO2 emission regulations, and global OEMs' proportion of electric vehicle.

POSCO Group has established full battery material value chain from raw materials business to battery materials and recycling business. As the only domestic producer of graphite-based anode materials, which are considered to have the highest degree of difficulty in achieving independence from Chinese imports, POSCO Future M is expected to expand its sales revenues in working with global automakers and battery producers. In specific, POSCO Future M established a joint venture (Ulium CAM) with GM in August 2022 to begin construction of high nickel cathode plant in Canada with a production capacity of a 30 thousand ton per year.

20

It is planned to be completed in the second half of 2024 and to start production in the first half of 2025. For lithium, which is a raw material for anode materials, POSCO HOLDINGS (the largest shareholder of POSCO Future M) plans to establish a 71 thousand tons production system in 2024 through investment in Argentine salt lakes and Australian mines and expand its production capacity to 423 thousand tons by 2030.

Considering POSCO Future M's cathode material production capacity and lithium input amount, lithium self-sufficiency rate is expected to exceed 100% by 2030. In addition, POSCO HOLDINGS plans to establish a 240 thousand ton nickel production system by 2030 by expanding its investment in securing nickel through mining, smelting and recycling.

Global Cathode and Anode Material Market Outlook

(Ten thousand Tons)

(SNE Research)

D. Others

In Others segment, there are 12 subsidiaries in total, including POSCO HOLDINGS. POSCO HOLDINGS is focusing on investment in new growth businesses and opportunities.

21

3. Key Products

A. Sales of Key Products (2023)

(In hundred millions of KRW, %)

Business

Segment

Item /

Business Sector

Specific Use

Total Sales Ratio
Steel Hot-rolled Product (HR) Steel pipe, Shipbuilding, etc. 134,709 21.20 %
Cold-rolled Product (CR) Automobile , Home appliances, etc. 194,914 30.70 %
Stainless Steel Products Tableware, pipes, etc. 106,834 16.80 %
Others Plates, Wire rods, etc. 198,930 31.30 %
Gross Sum 635,387 100.00 %
Deduction of Internal Trade -231,454
Sub Total 403,933
Green Infrastructure Trading Steel, Metal 315,317 55.20 %
Chemical, Strategic Item, Energy 29,716 5.20 %
Others 81,849 14.30 %
Construction Architecture (Domestic) 41,251 7.20 %
Plant (Domestic) 23,371 4.10 %
Civil Engineering (Domestic) 11,658 2.00 %
Others (Domestic) 2,096 0.40 %
Overseas Construction 14,975 2.60 %
Owned Construction 5,805 1.00 %
Others 3,520 0.60 %
Logistics and etc. Others 42,014 7.40 %
Gross Sum 571,572 100.00 %
Deduction of Internal Trade -243,520
Sub Total 328,052
Green Materials and Energy Gross Sum 48,219 100.00 %
Deduction of Internal Trade -10,059
Sub Total 38,160
Others Gross Sum 15,622 100.00 %
Deduction of Internal Trade -14,495
Sub Total 1,127

Total Sum

771,272
*

The steel segment above includes POSCO's performance before the spin-off (January to February).

22

B. Price Movement Trends of Key Products

(In thousands of KRW/ Tons, KRW/kWh)

Business Segment

Products

2023 2022 2021

Steel

Hot-rolled Product (HR) 967 1,105 970
Cold-rolled Product (CR) 1,157 1,293 1,035

Green Infrastructure

Electric Power 205 224 98

Green Materials and Energy

Refractory 991 1,022 913
Lime 147 117 104
ø

Above price movement trend of steel segment in 2022 is based on the price between March 1 to December 31, 2022 (HR and CR price in 3Q 2022 is 1,163 and 1,300 thousand won)

ø

Construction and Logistics and etc. segments of Green Infrastructure are omitted due to its difficulties of measuring raw materials fluctuations. In the case of the secondary battery material business, detailed descriptions are not included due to risk of information leakage

[Steel]

(1) Criteria for Calculation

(a) Subjects for Calculation: Unit sales prices of the standard hot-rolled product and cold-rolled product

(b) Calculation Method and Unit: The average price of each product based on its total sales including the freight costs during the given period.

(2) Factors of Price Changes

Sales prices of major products fell in 2023 compared to 2022 due to the following reasons. In the first half of the year, a combination of economic recovery expectations due to China's domestic demand stimulus policy and temporary supply constraints in the U.S. and Europe served as a factor for price recovery. However, the global steel market turned downward in the second half due to increased uncertainties such as geopolitical risks including the Hamas war in Israel and continued high-interest rates.

[Green Infrastructure]

(1) Criteria for Calculation

(a) Subjects for Calculation: Price of electric power

(b) Calculation Method and Unit: Unit price per electric power ÷ Net power volume generated

(2) Factors of Price Changes

Power : Korea Gas Corporation cost, etc.

*

The cost consists of introduction cost, supply cost, etc., and is affected by crude oil and exchange rates

[Green materials and Energy]

(1) Criteria for Calculation

(a) Subjects for Calculation: Unit price of refractory and quicklime

(b) Calculation Method and Unit: The average price of each product based on its total sales including the freight costs during the given period.

23

(2) Factors of Price Changes

•

Price of refractories is affected by business condition of front industry and raw material cost.

•

Quicklime price is mainly influenced by utility unit price and raw materials cost. The price fluctuation of quicklime is small.

•

Raw materials for energy materials are subject to price fluctuations depending on the international supply of mineral resources.

24

4. Major Raw Materials

A. Current Status of Major Raw Materials

(In hundred millions of KRW)

Business Segment

Type of
Purchase

Item

Specific Use

Purchase
Amount
(Portion, %)		 Portion (%)

Remarks

Steel

Raw Materials

Materials for

Iron-making

Iron Ore for Blast

Furnaces

177,628 61.90 % Iron Ore, Coal
Sub-materials

Sub-materials for

Iron-making,

Steelmaking

57,984 20.20 %

Iron Material,

Alloy Iron,

Non-ferrous Metal,

Limestone, etc.

Stainless Steel Materials

Key Materials for

STS Production

51,299 17.90 %

Nickel, Ferrochrome,

STS Scrap Iron, etc.

Green Infrastructure

Trading Raw Materials LNG Material for Power Generation 20,785 100.00 % -
Ready-mixed Concrete Construction of Structure 3,599 21.60 % -

Steel

Reinforcement

Strengthening Concrete 3,463 20.80 % -
Construction Raw Materials Cable Electricity Transfer 202 1.20 % -
Steel Pile Foundation of Structure 102 0.60 % -
Others Construction of Pipe and Structure etc. 9,293 55.80 % -
Logistics
and etc. 		Raw Materials Others For other use 9,376 100.00 % -
NCM and etc. Production of cathode materials 37,670 90.60 % -
Graphite and etc.

Production of

anode materials

1,128 2.70 % -

Green Materials and Energy

Raw Materials Limestone and etc. Production of Lime 1,143 2.70 % -
Others Production of refractory 1,622 3.90 % -
*

Amount: CIF + customs duties + stevedoring fees + other incidental expenses

25

B. Price Movement Trends of Major Raw Materials

(In thousands of KRW)

Business Segment

Category

2023 2022 2021

Steel

Iron Ore(per ton) 145 143 169
Coal(per ton) 387 472 257
Scrap Iron(per ton) 526 605 563
Nickel(per ton) 28,043 33,147 21,130

Green Infrastructure

Trading

LNG

(per ton)

1,428 1,594 702

Ready-mixed Concrete

(per m3)

85 77 68

Steel Pile

(per m)

165 180 272
Construction

Steel Reinforcement

(per kg)

0.9 1.0 1.0

Cable

(per m)

0.9 0.9 1.2

Green Materials and Energy

Refractory

(per ton)

334 479 320

Limestone

(per ton)

24 22 19
ø

Green Infrastructure (Logistics and etc. segment) and Others segment are omitted due to its difficulties of measuring raw materials fluctuations. In the case of the EV battery material business, detailed descriptions are not included due to risk of information leakage

26

[Steel]

ø

Price Movement Trend of Major Raw Materials

(1) Iron Ore : Iron ore prices rose 10% quarter-on-quarter to U$117/ton in the fourth quarter of 2023, due to the expectations of an economic recovery following government stimulus measures, including financial support to recover China's real estate market and increased investment in manufacturing and infrastructure.

(In US Dollars Tons)

'23.4Q

'23.3Q

'23.2Q

'23.1Q

'22.4Q

'22.3Q

'22.2Q

'22.1Q

'21.4Q

'21.3Q

'21.2Q

'21.1Q

117

106 102 118 90 94 126 132 96 148 188 158

(2) Coal : The coal prices rose 7% quarter-on-quarter to U$334/ton in the fourth quarter of 2023 as production issues and tight supply due to regular maintenance at a number of major Australian mining companies.

(In US Dollars/Tons)

'23.4Q

'23.3Q

'23.2Q

'23.1Q

'22.4Q

'22.3Q

'22.2Q

'22.1Q

'21.4Q

'21.3Q

'21.2Q

'21.1Q

334

264 243 344 278 250 446 488 369 264 137 127

(3) Scrap : Iron scrap prices in the fourth quarter of 2023 remained the same as previous quarter's U$385/ton due to weak demand and supply in East Asia and downturn in the forward industry.

(In US Dollars/Tons)

'23.4Q

'23.3Q

'23.2Q

'23.1Q

'22.4Q

'22.3Q

'22.2Q

'22.1Q

'21.4Q

'21.3Q

'21.2Q

'21.1Q

385

385 403 438 387 394 531 562 527 500 497 443

27

(4) Nickel : Nickel prices fell 15% quarter-on-quarter to U$17,247/ton in the fourth quarter of 2023 due to oversupply from Indonesia and weak demand of secondary batteries.

(In US Dollars/lb, US Dollars/Tons)

'23.4Q

'23.3Q

'23.2Q

'23.1Q

'22.4Q

'22.3Q

'22.2Q

'22.1Q

'21.4Q

'21.3Q

'21.2Q

'21.1Q

7.83

9.23 10.12 11.79 11.48 10.01 13.13 11.98 8.99 8.68 7.87 7.97

17,247

20,344 22,308 25,983 25,292 22,063 28,940 26,395 19,821 19,125 17,359 17,570
ø

LME : London Metal Exchange

28

[Green Infrastructure]

(1) Criteria for Calculation

Business Sector

Products

Criteria for Calculation

Factors of Price Changes

Trading LNG Average purchase price and LNG direct purchase price of Korea Gas Corporation Cost of Korea Gas Corporation (cost consists of introduction cost, supply cost, etc. and is affected by crude oil, exchange rate, etc.)
Construction

Ready-mixed Concrete

Standard 25-210-15

No change in price

Steel Pile

SPIRAL,609.6,12T,STP275,KS F 4602,STEEL PILE

No change in price
Steel Reinforcement SD400 10mm

Decrease the price of raw materials (scrap)

Cable TFR-3, 0.6/1KV, 2.5SQ, 2C The LME market is on a slight decline and there are fluctuations in raw material prices due to an increase in the exchange rate, but it is not at a level that has a significant impact on price fluctuations

[Green Materials and Energy]

(1)

Criteria for Calculation

•

Refractory and lime: Purchase prices including freight costs

(2)

Factors of Price Changes

•

Refractory raw materials : Price fluctuations and compositional costs of raw materials in China

•

Limestone : Raw material price fluctuation is not extreme and it varies slightly depending on the freight cost

•

Energy materials : Price trends are not disclosed considering concerns about information leakage

29

5. Production and Facilities

A. Production Capacity

[Steel]

∎ POSCO

(Thousands of Tons)

Business Area

Products 2023 2022 2021

Steel

Crude Steel 40,680 40,680 40,680
*

The steel production above includes POSCO's performance before the spin-off (January to February).

∎ POSCO STEELEON

(Thousands of Tons)

Business Area

Products Plant 2023 2022 2021

Steel


Galvanized / Color-coated
Steel
Pohang 960 960 960
Myanmar 70 70 70

Total

1,030 1,030 1,030

∎ POSCO M-TECH

(Tons)

Business Area

Products 2023 2022 2021

Raw materials for steel production

Ingot and etc. 39,294 39,058 38,080

[Green Infrastructure]

∎ POSCO INTERNATIONAL

(Electric Power: MW/year)

Business Area

Products 2023 2022 2021

Power Generation

Electric Power Incheon 3,412 3,412 3,412

[Green Materials and Energy]

30

∎ POSCO FUTURE M

(Thousands of Tons)

Business Area

Products Place of Business 2023 2022 2021

Refractory

Brick and etc. Pohang 116,560 116,560 113,000

LIME

Quicklime Pohang 1,095,000 1,095,000 1,095,000
Gwangyang 1,095,000 1,095,000 1,095,000

Total

2,306,560 2,306,560 2,303,000
*

In the case of the energy materials sector, detailed notation was omitted in consideration of technology and information leakage concerns.

B. Production Result and Capacity Utilization Rate

[Steel]

(1)

Production

(Thousands of Tons)

Products

2023 2022 2021

Crude Steel

39,941 37,928 42,964

Products

Hot-Rolled Steel 10,660 9,268 9,243
Plate 6,602 5,857 6,832
Wire Rod 2,325 1,988 2,688
Pickled-Oiled Steel 2,780 2,847 2,880
Cold-Rolled Products 7,133 7,623 7,898
Coated Steel 7,299 6,708 7,446
Electrical Steel 828 1,005 1,032
Stainless Steel 3,104 3,400 4,099
Others 1,795 3,261 3,106
Total 42,528 41,957 45,224
ø

The amount of products is the aggregate amount of POSCO's production and production of POSCO's subsidiaries, which may include interested parties' transactions.

ø

POSCO's production result includes production of POSCO HOLDINGS before the spin-off date (March 1, 2022), and production of POSCO after the spin-off date.

(2)

Capacity Utilization Rate

(Thousands of Tons, %)

Company

Capacity Production Utilization Rate
POSCO 40,680 35,682 87.70 %
PT.KRAKATAU POSCO 2,990 3,005 100.50 %

Crude Steel

Production

POSCO (Zhangjiagang) Stainless Steel Co., Ltd. 1,100 839 76.30 %
POSCO YAMATO VINA STEEL JOINT STOCK COMPANY 550 415 75.50 %
Total 45,320 39,941 88.10 %
ø

POSCO's production result includes production of POSCO HOLDINGS before the spin-off date (March 1, 2022), and production of POSCO after the spin-off date.

31

[Green Infrastructure]

ø

Since it is difficult to measure production result and operating rates of Green Infrastructure (Construction), and Green Infrastructure (Logistics and etc.) segments considering the nature of the business, they are omitted in this part.

∎ POSCO INTERNATIONAL

(1)

Production Result

(Gwh)

Business Area

Products 2023 2022 2021

Power Generation

Electric Power

(Incheon Power Plant)

11,213 11,189 13,493
(2)

Capacity Utilization Rate

(Hour, %)

Business Area

Production Base 2023
Capacity		 2023
Production		 Utilization Rate

Power Generation

Incheon Power Plant 8,760 5,177 59.1 %

[Green Materials and Energy]

∎ POSCO FUTURE M

(1)

Production Result

(Tons)

Business Area

Products Place of
Business		 2023 2022 2021

Refractory

Brick and etc. Pohang 77,437 81,094 83,884

LIME

Quicklime Pohang 1,110,594 1,043,109 1,151,419
Gwangyang 1,243,040 1,176,611 1,295,720

Total

2,431,071 2,300,814 2,531,023
ø

Coke oven gas (COG) facility is a simple consignment operation for POSCO facilities, so production performance is omitted

ø

In the case of the EV battery material business, detailed descriptions are not included due to risk of information leakage

32

(2)

Capacity Utilization Rate (2023)

(Tons,%)

Business Area

Capacity Production Utilization Rate

Refractory Factory

116,560 77,437 68

Quicklime Factory (Pohang)

1,095,000 1,110,594 101

Quicklime Factory (Gwangyang)

1,095,000 1,243,040 114

Total

2,306,560 2,431,071 - 
ø

Coke oven gas (COG) facility is a simple consignment operation for POSCO facilities, so production performance is omitted

ø

In the case of the EV battery material business, detailed descriptions are not included due to risk of information leakage

C. Production Facilities

(1) The current status of production facilities

[Land] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

1,814,272 67,531 -1,607 -  1,880,196

Green Infrastructure

Trading 185,495 313,842 -  -3,766 495,571
Construction 382,586 2,155 -5,892 -  378,849
Logistics
and etc. 		399,389 -  -288,331 -  111,058

Green Materials and Energy

200,438 75,133 -41,156 -  234,415

Others

120,985 70,875 -  -1,705 190,155
[Buildings] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

3,081,547 306,400 -105,158 -303,894 2,978,895

Green Infrastructure

Trading 486,865 398,775 -294,021 -21,849 569,770
Construction 75,728 29,770 -10,313 -3,344 91,841
Logistics and
etc. 		187,725 2,899 -76,403 -6,700 107,521

Green Materials and Energy

231,104 369,839 -28,950 -17,178 554,815

Others

111,925 18,500 -3,706 -1,929 124,790

33

[Structures] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

2,515,379 203,702 -84,810 -250,643 2,383,628

Green Infrastructure

Trading 62,033 1,168,908 -734,243 -24,586 472,112
Construction 26,888 32,005 -3,643 -3,395 51,855
Logistics and etc. 531,573 452 -420,639 -8,858 102,528

Green Materials and Energy

20,865 37,708 -199 -2,737 55,637

Others

6,189 11,542 -1,733 -234 15,764
[Machinery and Equipments] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

14,230,273 3,081,047 -1,203,889 -2,279,292 13,828,139

Green Infrastructure

Trading 392,562 2,949,767 -1,990,768 -139,235 1,212,326
Construction 7,321 3,545 -1,637 -1,739 7,490
Logistics and etc. 1,150,735 8,301 -846,060 -37,732 275,244

Green Materials and Energy

629,658 772,263 -59,289 -145,244 1,197,388

Others

12,281 18,637 -10,723 -1,590 18,605
[Vehicles] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

33,443 49,095 -12,827 -18,833 50,878

Green Infrastructure

Trading 8,592 7,875 -1,816 -2,525 12,126
Construction 4,599 4,989 -1,967 -1,509 6,112
Logistics and etc. 863 764 -342 -231 1,054

Green Materials and Energy

4,620 8,734 -778 -3,215 9,361

Others

14 62 -3 -9 64
[Tools and Fixtures] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

55,774 86,873 -46,850 -27,245 68,552

Green Infrastructure

Trading 25,494 19,987 -8,059 -13,609 23,813
Construction 1,148 1,069 -218 -584 1,415
Logistics and etc. 2,026 5,397 -1,945 -1,040 4,438

Green Materials and Energy

6,488 34,960 -790 -10,043 30,615

Others

31 1 -  -  32

34

[Equipment] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

101,743 111,944 -61,350 -40,251 112,086

Green Infrastructure

Trading 27,791 27,604 -17,019 -10,515 27,861
Construction 8,329 7,902 -3,122 -3,234 9,875
Logistics and etc. 13,197 9,382 -7,334 -2,684 12,561

Green Materials and Energy

8,872 8,637 -233 -3,998 13,278

Others

13,413 2,695 -554 -1,328 14,226
[Financial Lease Assets] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

508,323 187,879 -403,568 -45,477 247,157

Green Infrastructure

Trading 250,884 280,652 -93,571 -53,869 384,096
Construction 50,171 107,209 -80,586 -39,779 37,015
Logistics and etc. 34,406 187,373 -3,299 -7,372 211,108

Green Materials and Energy

54,708 85,346 -20,784 -21,311 97,959

Others

22,706 2,187 -1,345 -2,578 20,970
[Biological Assets] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

-  -  -  -  - 

Green Infrastructure

Trading 141,720 5,190 -  -9,579 137,331
Construction -  -  -  -  - 
Logistics and etc. -  -  -  -  - 

Green Materials and Energy

-  -  -  -  - 

Others

-  -  -  -  - 
[Assets under Construction] (In millions of KRW)

Business Segment

Beginning Book
Balance		 Increased Decreased Depreciation Ending Book
Balance

Steel

1,780,285 3,436,421 -2,421,281 -  2,795,425

Green Infrastructure

Trading 129,279 280,626 -86,961 -  322,944
Construction 21,292 71,301 -81,632 -  10,961
Logistics and etc. 88,692 95,628 -58,005 -  126,315

Green Materials and Energy

1,487,942 2,813,750 -1,293,071 -  3,008,621

Others

30,535 69,693 -22,401 -8,420 69,407

35

(2) New Facility Establishment, Purchase, Etc.

(a) Investments under Construction

[Steel] (In hundred millions of KRW)

Company

Date

Project

Total
Investment		 Invested
Amount		 Amount
to Be
Invested
POSCO

Expansion/ Establish

ment

November 2021

~ December 2025

G)   Increased production capacity of electrical steel for eco-friendly vehicles in Gwangyang

9,088 7,112 1,976

February 2023

~December 2025

G)   Establishment of Electric arc furnace

6,420 212 6,208

July 2019

~ August 2025

P)  Establishment of #6 Coke plant

15,377 13,620 1,757

Maintenance/

Improvement

October 2020

~ August 2027

G,P) Thefirst phase of the sealing of raw material yards for both Pohang and Gwangyang Works

33,902 9,021 24,881

August 2021

~ September 2029

P)  Improvement of #2 Hot strip mill furnace

3,084 146 2,938
ø

P stands for Pohang Steel Works.

ø

G stands for Gwangyang Steel Works.

[Green Infrastructure (Trading / Logistics and etc.)]

(In hundred millions of KRW)

Company

Date

Project

Total
Investment		 Invested
Amount		 Amount
to Be
Invested
POSCO International

Expansion/ Establish

ment

January 2021-

~June 2024

Gwangyang LNG #6 Tank 1,437 1,031 406
NEH

Expansion/ Establish

ment

May 2022

~July 2026

Gwangyang LNG terminal 8,668 1,140 7,528

36

[Green Materials and Energy]    

(In hundred millions of KRW)

Company

Date Project Total
Investment		 Invested
Amount		 Amount to Be
Invested
POSCO Future M

Expansion/ Establish

ment

March 2023

~January
2025

The 2-1 stage of
cathode material
factory in Pohang 		3,920 673 3,247
March 2020

~June 2025

Establishment of
new Artificial
Graphite Anode
material line in
Pohang 		3,458 1,774 1,684
July 2022

~February
2025

#2 precursor
factory in
Gwangyang 		3,262 1,585 1,677
December
2021

~May 2024

#1 cathode
material factory in
Pohang 		3,215 2,882 333
August 2020

~September
2023

The 3rd stage of
cathode material
factory in
Gwangyang 		2,895 2,734 161
November
2020

~August
2023

The 4th stage of
cathode material
factory in
Gwangyang 		2,758 2,696 62
November
2019

~June 2023

The 2-2 stage of
Natural Graphite
anode material
factory in Sejong 		2,876 2,699 177
July 2023

~January
2025

The 5th stage of
cathode material
factory in
Gwangyang 		6,834 6 6,828
April 2023

~August
2025

The 2nd stage of
production line up
expansion in #2
cathode material
factory 		6,148 673 5,475

ZHEJIANG POSCO
-HUAYOU

ESM CO., LTD

Expansion/ Establish

ment

August
2021~June
2025 		The 2nd stage of
cathode material
factory 		1,769 1,081 688

POSCO FUTURE

MATERIALS CANADA INC.

Expansion/ Establish

ment

May
2022~March
2025 		The 1st stage of
cathode material
factory in Canada 		9,187 4,866 4,321

POSCO FUTURE

MATERIALS CANADA INC.

Expansion/ Establish

ment

June
2023~May
2027 		The 2nd stage of
cathode material
factory in Canada 		10,005 682 9,323
POSCO-Pilbara
LITHIUM SOLUTION

Expansion/ Establish

ment

April
2021~June
2025 		Construction of
hard rock lithium
commercialization
plant 		10,977 8,490 2,487

POSCO

ARGENTINA

Expansion/ Establish

ment

January
2022~June
2025 		Brine lithium
commercialization
plant stage 1 and
stage 2 		26,273 20,136 6,137
POSCO LITHIUM
SOLUTION

Expansion/ Establish

ment

December
2022~June
2025 		Brine lithium
commercialization
plant stage 2
(downstream) 		5,751 943 4,808
ø

Ongoing investments over KRW 100 billion as of June 30, 2023 are listed on the table.

ø

Investments in China and Canada are based on the payment of POSCO Future M's capital.

37

6. Product Sales

[Steel]    

(In hundred millions of KRW)

Items

2023 2022 2021

Domestic

Hot-Rolled

Products

58,730 68,784 70,117

Cold-Rolled

Products

52,754 55,997 54,864
Stainless Steel 30,313 42,481 35,722
Others 106,558 110,202 94,737

Overseas

Hot-Rolled

Products

75,979 66,871 55,180

Cold-Rolled

Products

142,160 162,588 144,421
Stainless Steel 76,521 92,279 86,712
Others 92,373 107,294 93,736

Total

Gross Sum 635,387 706,496 635,489
Internal Transaction -231,454 -261,026 -224,555
Total 403,933 445,470 410,934

[Green Infrastructure]    

(In hundred millions of KRW)

Business

Area

Items 2023 2022 2021

Trading

Domestic

Trading

Merchandise 54,327 65,401 63,137
Product 39,121 9,825 8,757
Others 1,366 647 1,174
Overseas

Trading

Merchandise 121,136 137,635 137,741
Product 3,375 1,058 1,223
Others 48 10 207
Trades among the 3 countries 210,065 281,321 240,665

Construction

Domestic

Construction

Building 41,251 35,061 35,633
Plant 23,371 15,706 13,272
Civil
Engineering 		11,658 9,321 6,771
Others 2,096 1,823 1,763
Overseas 14,975 15,938 8,097
Own Construction 9,325 11,006 8,589

Logistics and etc.

Others 42,014 74,256 29,145

Total

Gross Sum 571,572 659,008 556,174
Deduction of Internal Transaction -243,520 -282,787 -220,938
Total 328,052 376,221 335,236

38

[Green Materials and Energy]    

(In hundred millions of KRW)

Items

2023 2022 2021

Gross Sum

48,219 33,888 20,892

Deduction of Internal Transaction

-10,059 -9,370 -8,472

Total

38,160 24,518 12,420

[Others]

(In hundred millions of KRW)

Items

2023 2022 2021

Gross Sum

15,622 11,695 17,842

Deduction of Internal Transaction

-14,495 -10,402 -13,109

Total

1,127 1,293 4,733
ø

Domestic and overseas categorized by the sales area.

ø

Sales of POSCO International's foreign branches are included in 'trade among the 3 countries' under Green Infrastructure part

ø

As of January 2023, POSCO Energy was merged into POSCO International. As a result, the performance of POSCO Energy before the merger was included in Green Infrastructure (Logistics and etc. segment).

39

7. Derivatives

POSCO HOLDINGS use forward exchange contracts and currency swap contracts to hedge against the exchange rate risk for foreign currency loans. However those derivative contracts were transferred to POSCO followed by vertical spin-off on March, 2022.

POSCO use currency swap contracts in order to hedge against the exchange rate risk for long-term and short-term foreign currency loans. The currency swap valuation gains reflected in our financial statements at the end of December 2023 amounted to KRW 113,212 million, while the valuation losses amounted to KRW 10,651 million, and transaction gains amounted KRW20,754 million while transaction losses amounted to KRW 11,034 million.

POSCO also has been hedging against exchange rate risks for expected sales revenue and foreign currency borrowings by trading in currency forward products. The derivative valuation gains reflected in our financial statements at the end of December 2023 amounted to KRW 18,872 million. The transaction losses for the existing maturity date currency forward derivatives that we've subscribed to were KRW 8,851 million.

40

8. Significant Contracts

[Major management contracts]

○ Transfer contract of steel business related shares or investment certificates of POSCO HOLDINGS (2023)

(1) Contract Counterparty: POSCO

(2) Transaction amount: KRW 1.1320 trillion

(3) Purpose: In order to improve the management efficiency of the steel business as a following step of the vertical spin-off on March 2022.

(4) Contract period: August 18, 2023 ~ September 25, 2023

(5) Payment method: Cash payment

(6) Company subject to transfer: PT.KP, P-Mexico,P-IJPC,P-MVWPC (4 overseas companies)

*

The above contract amount is the amount applied to the exchange rate based on July 31, 2023, and overseas assets are traded by applying the exchange rate on the day of the transaction.

○ Transfer contract of steel business related shares or investment certificates of POSCO HOLDINGS (2022)

(1) Contract Counterparty: POSCO

(2) Transaction amount: KRW 1.1377 trillion

(3) Purpose: In order to improve the management efficiency of the steel business as a following step of the vertical spin-off on March 2022.

(4) Contract period: November 18, 2022 ~ March 31, 2023

(5) Payment method: Cash payment

(6) Company subject to transfer: POSCO YAMATO VINA STEEL JOINT STOCK COMPANY, POSCO Thainox Public Company Limited, POSCO COATED STEEL (THAILAND) CO., and etc. (32 domestic companies, 25 overseas companies)

*

The above contract amount is the amount applied to the exchange rate based on November 3, 2022, and overseas assets are traded by applying the exchange rate on the day of the transaction.

○ Sales contract of CSP shares

(1) Contract Counterparty: ArcelorMittal Brazil

(2) Purpose: Improving asset efficiency through the sales of non-core assets with no management right

(3) Contract period: July 28, 2022 (transaction completed on March 10, 2023)

(4) Transaction amount: and payment method

ArcelorMittal Brazil acquired shares in shareholder companies free of charge on the condition that ArcelorMittal Brazil succeed CSP's debts. In addition, the shareholder companies will additionally pay US$102 million.

*

POSCO HOLDNGS paid US$20.4 million equivalent to a 20 percent stake

41

[Green Infrastructure (Trading)] 

∎ POSCO INTERNATIONAL

Contract

Date

Remarks

Investment on the

3rd stage development of

A-1 / A-3 block

in Myanmar gas field

September

2020

1)  Investment amount: KRW 365,786,302,000

2)  Development period: September 1, 2019 ~ December 31, 2024

3)  Schedule : Installation Completion of low-pressure gas compression platform and commenced operation in 2024

4)  Other Information

•  Location: North-west offshore, Myanmar

•  This investment is the 3rd stage of development, which consists of 3 stages in Myanmar gas field development. The purpose of investment is to maintain current gas production level stably by installing low-pressure gas compression platform.

•  In the first quarter of 2021, the design and production of the equipment for this work was started, and it is planned to start operation in 2024. The " (2) Development period" above is the period including the basic design progress period, September 2019 to September 2020.

•  Participation rate of each company in gas production and offshore pipeline transportation business

•  POSCO International Corporation : 51.0%

•  ONGC VIDESH(Oil and Natural Gas Corporation Videsh Limited) : 17.0%

•  MOGE(Myanmar Oil and Gas Enterprise): 15.0%

•  GAIL (India) Limited : 8.5%

•  KOGAS(Korea Gas Corporation): 8.5%

•  Investment size of USD 315,170 thousand, applying the exchange rate of 1USD=1,160.60 KRW, which is the date of the BOD resolution.

•  Detailed information and future timeline on this resource development investment is subject to change.

ø POSCO International disclosure date : September 22, 2020

(Decision on natural resources investment)

Decision to acquire
shares of Senex
Energy (Australia) 		December 2021

1)  Purpose : Production and Development of land gas field in eastern Australia

2)  Method : Cash acquisition

3)  Resolution date of Board of Directors : December 10, 2021

4)  Acquisition amount : KRW 371,077,996,186

5)  Number of shares acquired : 96,178,946Shares

6)  Date of acquisition : April 1, 2022

7)  equity structure (after acquisition of shares) :

•  POSCO International : 50.1%

•  Hancock Energy (Australia) : 49.9%

ø POSCO International disclosure date :

March 31, 2022 (Decision on Acquisition of Shares or Investment Certificates of Other Corporations)

42

Decision on

Merger of

POSCO Energy

August

2022

1)  Purpose : The purpose of the merger is to consolidate the energy business within the group and complete the value chain of the LNG business, thereby strengthening competitiveness, improving management efficiency and laying the foundation for sustainable growth.

2)  Method of Merger : POSCO Energy Co., Ltd. ("POSCO Energy") will be merged with and into POSCO International Co., Ltd. ("POSCO International").

3)  Date of board resolution (decision Date) : August 12, 2022

4)  Date of General Shareholders Meeting for merger approval : November 4, 2022

4)  Merger ratio : POSCO International : POSCO Energy = 1 : 1.1626920

5)  Record date of merger : January 1, 2023

6)  Scheduled date of merger registration : January 2, 2023

ø POSCO International disclosure date : January 2, 2023

[Green Infrastructure (Logistics and etc.)] 

∎ POSCO FLOW

Contract

Date

Remarks

Transfer of all logistics tasks such as arranging logistics and performing related services December 2021

1)  Contract counterpart : POSCO (POSCO HOLDINGS INC.)

2)  Signed date : December 22, 2021

3)  Date of Transfer : January 1, 2022

4)  Transfer amount : KRW 2,945 million

5)  Information : Transfer of all logistics tasks such as arranging logistics and performing related services

43

9. Research and Development

A. Research and Development ("R&D") Organization

Business

Segment

Company

Organization

Steel POSCO Steel Production & Technology Strategy Office
Technical Research Laboratories
Steel Product R&D Center
Process R&D Center
Automotive Steel R&D Center

Low-Carbon Process R&D Center

Steel Solution R&D Center

POSCO (Zhangjiagang) Stainless Steel

Co., Ltd.

R&D Center
POSCO STEELEON

Production and Sales Strategy Office

POSCO M-TECH Automation R&D Center
Pohang Steel Business Office
Green Infrastructure POSCO MOBILITY SOLUTION STS Business Office R&D Group
Core Business Office Product Process Development Group
Core Business Office Mold Research Group
POSCO Eco & Challenge R&D Center
POSCO A&C Smart Housing Business Department
POSCO DX R&D Center
Green Materials and Energy POSCO Future M R&D Center
Energy Material R&D Center
Others POSCO HOLDINGS INC. New Experience of Technology Hub

AI R&D Laboratories,

New Experience of Technology Hub

LiB Materials R&D Laboratories

New Experience of Technology Hub

Hydrogen and Low-Carbon Energy R&D Laboratories, New Experience of Technology Hub

43

B. R&D Expenses in 2023 (In millions of KRW)

Category

Business Segment
1. Steel 2. Green
Infrastructure		 3. Green
Materials
and Energy		 4. Others Total
Trading Construction Logistics
and etc.

Selling and Administrative Cost

26,566 3,965 3,204 15,647 40,794 85,693 175,869

Manufacturing Cost

339,344 520 3,303 -  77 -  343,244

R&D Cost (Intangible Assets)

73,880 -  -  4,908 11,934 2,169 92,891

Total*

439,790 4,485 6,507 20,555 52,805 87,862 612,004

Government Subsidy

-  702 -  -  -  702

R&D/Sales Ratio (%)

1.09 % 0.02 % 0.08 % 4.37 % 1.38 % 78.01 % 0.79 %
*

Total includes government subsidy.

44

III. Financial Statements

1. Consolidated Financial Statements

A. Summary

(In millions of KRW)

Account

2023 2022 2021
As of December 31, 2023 As of December 31, 2022 As of December 31, 2021

[Total current assets]

46,212,299 47,649,466 46,621,631

Cash and cash equivalents

6,670,879 8,053,108 4,775,166

Other receivables, net

1,947,529 2,112,697 2,104,609

Other short-term financial assets

11,403,166 10,909,920 13,447,717

Trade accounts and notes receivable, net

11,015,303 9,769,553 10,061,982

Inventories

13,825,514 15,472,417 15,215,098

Other current assets

1,349,908 1,331,771 1,017,059

[Total non-current assets]

54,733,095 50,757,315 44,849,983

Other receivables, net

1,452,445 1,520,331 1,415,143

Other long-term financial assets

2,708,325 2,332,538 2,119,674

Investments in associates and joint ventures

5,020,264 4,996,551 4,514,647

Property, plant and equipment, net

35,206,248 31,781,196 29,596,698

Intangible assets, net

4,714,784 4,838,451 4,166,309

Other non-current assets

5,631,029 5,288,248 3,037,512

Total assets

100,945,394 98,406,781 91,471,614

[Total current liabilities]

21,861,518 23,188,190 21,083,623

[Total non-current liabilities]

19,419,979 16,961,190 15,583,048

Total liabilities

41,281,497 40,149,380 36,666,671

[Equity attributable to owners of the controlling company]

54,180,849 52,512,116 50,427,355

Share capital

482,403 482,403 482,403

Capital surplus

1,663,334 1,400,832 1,387,960

Hybrid bonds

-  -  199,384

Retained earnings

53,857,514 52,965,180 51,532,888

Other equity attributable to owners of the controlling company

-1,822,402 -2,336,299 -3,175,280

[Non-controlling Interests]

5,483,048 5,745,285 4,377,588

Total equity

59,663,897 58,257,401 54,804,943

45

From January 1, 2023
to December 31, 2023 		From January 1, 2022
to December 31, 2022 		From January 1, 2021
to December 31, 2021

Revenue

77,127,197 84,750,204 76,332,345

Operating profit

3,531,423 4,850,053 9,238,089

Profit

1,845,850 3,560,484 7,195,890

[Profit attributable to owners of the controlling company]

1,698,092 3,144,087 6,617,239

[Profit attributable to non-controlling interests]

147,758 416,397 578,651

Total comprehensive Income

2,330,891 3,794,358 8,013,489

[Total comprehensive income attributable to owners of the controlling company]

2,131,737 3,380,649 7,384,572

[Total comprehensive income attributable to non-controlling interests]

199,154 413,709 628,917

Earnings per share(KRW)

22,382 41,456 87,330

Number of Consolidated Companies

192 181 170

B. The Standards Used for Reporting the Financial Statements

The Company prepared its financial statements in accordance with the Korean-International Financial Reporting Standards (the "K-IFRS") and applied it to each Company's final financial statements.

46

2. Separate Financial Statements

A. Summary

(In millions of KRW)

Account

2023 2022 2021

As of December 31,

2023

As of December 31,

2022

As of December 31, 2021

[Total current assets]

4,657,899 4,308,290 25,918,880

Cash and Cash equivalents

376,914 1,415,201 2,042,274

Trade accounts and notes receivable, net

238,332 128,991 6,017,508

Other receivables, net

68,821 40,288 545,341

Other short-term financial assets

3,940,743 2,515,375 9,605,522

Inventories

-  -  7,623,202

Other current assets

33,089 208,435 85,033

[Total non-current assets]

46,988,299 46,840,829 38,323,879

Other receivables, net

6,955 209,057 274,253

Other long-term financial assets

1,131,074 1,062,530 1,326,565

Investments in Subsidiaries, associates, and joint ventures

45,321,370 45,187,628 16,002,640

Property, plant and equipment, net

197,787 145,006 19,772,299

Intangible assets, net

19,341 15,902 551,410

Other non-current assets

311,772 220,706 396,712

Total assets

51,646,198 51,149,119 64,242,759

47

Account

2023 2022 2021

[Total current liabilities]

1,819,670 118,993 7,868,269

[Total non-current Liabilities]

2,326,663 3,858,263 7,339,065

Total liabilities

4,146,333 3,977,256 15,207,334

[Share capital]

482,403 482,403 482,403

[Capital surplus]

1,370,557 1,360,894 1,339,289

[Hybrid bonds]

-  -  199,384

[Retained earnings]

47,505,885 47,409,675 49,734,492

[Other equity]

-1,858,980 -2,081,109 -2,720,143

Total equity

47,499,865 47,171,863 49,035,425

From January 1, 2023

to December 31, 2023

From January 1, 2022

to December 31, 2022

From January 1, 2021

to December 31, 2021

Revenue

1,454,079 8,589,819 39,920,201

Operating profit

1,106,629 1,674,893 6,649,600

Profit

799,578 -467,852 5,181,227

Earnings per share(KRW)

10,539 -6,185 68,360

B. The Standards Used for Reporting the Financial Statements

The company prepared its financial statements in accordance with the Korean-International Financial Reporting Standards (the "K-IFRS").

48

IV. CORPORATE GOVERNANCE

1. Overview of Corporate Governance

A. Board of Directors ("BoD")

(1) Board of Directors

The Board of Directors consists of four inside directors (Choi, Jeong-Woo, Jeong,Ki-Seop,Yoo, Byeong-Og, Kim, Ji-Yong), one non-standing director(Kim, Hag-Dong), and seven outside directors (Pahk, Heui-Jae,Kim, Sung-Jin, Yoo, Young-Sook, Kwon, Tae-Kyun,Yoo, Jin-Nyong, Sohn, Sung-Kyu, Kim, Joon-Gi)

The Board of Directors manages the following five Special Committees:

(a) ESG Committee

(b) Director Candidate Recommendation Committee

(c) Evaluation and Compensation Committee

(d) Finance Committee

(e) Audit Committee

ø

Composition of the Special Committees under the BoD and their Functions(as of August 14, 2022)

Category

Composition

Directors

Major Functions

ESG Committee

3 Outside Directors,

1 Inside Director

Kim, Sung-Jin

(Chairman)

Yoo, Young-Sook

Yoo, Jin-Nyong

Yoo, Byeong-Og

[Deliberation Items]

(1)   Matters related to Operations of BoD and Special Committees

A. Agenda development and establishment of operating standards of the BoD and Special Committees

B. Prior deliberation on revision or repeal of the Operational Regulations of the Board of Directors

C. Prior deliberation of the composition and operation of the Special Committees under the BoD

(2)   ESG-related implementation monitoring and report publication

(3)   Deliberation and resolution of donation from over KRW 100 million to KRW 1 billion and Prior deliberation of donation over KRW 1 billion

(4) Internal transactions under Monopoly Regulation and Fair Trade Act (The act of providing or trading funds, securities, or assets with related party as business counterpart or for related party)

A. Review of internal transaction-related issues and improvement measures

B. Prior deliberation on internal transaction (Amount KRW 100 billion or more)

49

C. Deliberation and resolution of internal transactions (Amount from KRW 5 billion to less than KRW 100 billion)

(5)   Appointment of Fair Trade Compliance Officer.

[Report Items]

(1)   Major ESG issues of affiliates

(2)   Matters concerning the execution of internal transactions (transaction amount of KRW 5 billion to less than KRW 10 billion)

Director Candidate Recommendation Committee 3 Outside Directors

Yoo, Jin-Nyong

(Chairman)

Pahk, Heui-Jae

Sohn, Sung-Kyu

(1)   Qualification review of Outside Director candidates and recommendation to GMoS

(2)   Preliminary review and qualification review of Inside Director candidates

(3)   Prior deliberation on appointment of members of Special Committees

(4)   Prior deliberation of appointment of Representative Directors other than the Representative Director and CEO

(5)   Operation of Outside Director Candidate Recommendation Advisory Panel

(6)   Other matters necessary for recommending candidates for Outside Directors

Evaluation and

Compensation

Committee

4 Outside Directors

Yoo, Young-Sook

(Chairman)

Kwon, Tae-kyun

Sohn, Sung-Kyu

Kim, Joon-Gi

(1)   Establishment of management succession and management training plan

(2)   Establishment of plan for management evaluation and compensation, and execution

(3)   Prior deliberation on remuneration and retirement allowance of Directors

Finance Committee

3 Outside Directors;

1 Inside Director

Kwon, Tae-kyun (Chairman)

Pahk, Heui-Jae

Kim, Joon-Gi

Jeong, Ki-Seop

(1)   Developing policies for soundness of company's internal value and finance

(2)   Prior deliberation in case of filing in litigation or arbitration, or responding to reconciliation or mediation in the process of trial or taking any equivalent level of legal actions with the amount of KRW 100 billion or more

(3)   Regarding investment activities

A. Prior deliberation on new investments (KRW 100 billion or more. Investment and capital increase includes borrowings and liabilities that the company takes)

B. Prior deliberation on existing investments (KRW 200 billion or more. Investment and capital increase includes borrowings and liabilities that the company takes)

C. Approval of new investments (more than KRW 50 billion and less than KRW 100 billion, Investment and capital increase includes borrowings and liabilities that the company takes)

D. Approval of existing investments (more than KRW 100 billion and less than KRW 200 billion, Investment and capital increase includes borrowings and liabilities that the company takes)

E. Preliminary deliberation on the acquisition and disposal of tangible and intangible fixed assets and important investment assets (over KRW 200 billion, based on book value per unit of investment assets)

(4)   Deliberation and resolution on bond issuance and important borrowings (including refinancing borrowings exceeding KRW 100 billion)

(5)   Prior deliberation on bond issuance and important borrowings (new long-term borrowings exceeding KRW 100 billion)

50

(6)   Deliberation and resolution on offering non-current assets as collateral

(7)   Deliberation and resolution on takeover of debt such as collateral, guarantee, etc. from invested company

Audit Committee 3 Outside Directors

Sohn, Sung-Kyu (Chairman)

Kim, Sung-Jin

Yoo, Jin-Nyong

(1)   Setting the work scope of the committee

(2)   Matters that the BoD or Representative Directors delegated

(3)   Request for Extraordinary GMoS

(4)   Consulting of external experts

(5)   Audit of the legitimacy of management's business execution

(6)   Review soundness and validity of the company's financial activities and the appropriateness of financial reporting

(7)   Review the validity of important accounting standards or changes in accounting estimates

(8)   Evaluation of the operation status of the internal accounting management system

(9)   Evaluation of the internal control system

(10)  Agreement on appointment or dismissal of internal audit department representative

(11)  Contract for appointment, remuneration and non-audit services of independent auditors

(12)  Evaluation of independent auditors' audit activities

(13)  Report internal audit department's annual audit plan and results

(14)  Report on the evaluation results of the company's ethical compliance

(15)  An independent auditor reports on important facts of the company's Directors' misconduct or in violation of laws or Articles of Incorporation

(16)  Report that independent auditors have violated the company's accounting standards

(17)  Other items deemed necessary by each committee member

51

(2) List of Key Activities of the Board of Directors (January 1, 2023 ~ March 13, 2024)

(January 1, 2023 ~ March 16, 2023)

No.

Date

Agenda

Approval

2023-1 January 27

•   Deliberation Agenda

1. Approval of the 55th financial statements and schedule for the general meeting of shareholders

•   Report Agenda

1. Business performance of the fiscal year of 2022

2. Report on internal control over financial reporting

3. Assessment on the effectiveness of internal control over financial reporting

4. Implementation status of the BoD resolved agendas for the fiscal year of 2022

5. Business status and plan of Robot automation solution

Approved

After Amendment

2023-2 February 16

•   Deliberation Agenda

1. Recommendation of Inside Directors candidates and Non-Standing Director candidate

•   Report Agenda

1. Monitoring results of internal control standard

2. Establishment of electric furnace in Gwangyang

Approved

February 16

February 20

3. Partial Amendments of the Articles of Incorporation

4. Agendas for the 55th general meeting of shareholders

(continued from previous BoD meeting on Feb 16 and approved on Feb 20)

Approved
*

At the 55th General Meeting of Shareholders which was held on March 17, 2023, Outside Director Chang, Seung-Wha, and Inside Director Chon, Jung-Son and Chung, Chang-Hwa retired due to expiration of the terms. Outside Directors Kim, Joon-Gi, Inside Director Jeong, Ki-Seop and Kim, Ji-Yong were newly elected.

52

(March 17, 2023 ~ December 31, 2023)

No.

Date

Agenda

Approval

2023-3 March 17

•   Deliberation Agenda

1. Appointment of the Chairman of the BoD

2. Appointment of Special Committees members

3. Appointment of Representative Directors and Inside Directors

4. Treasury Stock Disposal in regards to Executive Stock Grant

5. Relocation of Headquarter

•   Report Agenda

1. Establishing POSCO maintenance subsidiary

Approved
2023-4 April 7

•   Deliberation Agenda

1. Investment in Indonesian Nickel Refinery Business for Battery Production Purposes

•   Report Agenda

1. Mid-term Shareholder Return Policy (2023~2025)

Approved
2023-5 May 12

•   Deliberation Agenda

1. Resolution on dividend payment for the 1st quarter of 2023

2. Domestic Nickel Sulfate Refining Joint Venture

•   Report Agenda

1. Business performance in the 1st quarter of 2023

2. POSCO Group's IP Competitiveness Enhancement Plan

3. ESG Risk management status of FY2022

4. The performance and assessment of BoD for 2022

5. Major business performance of subsidiaries

Approved
2023-6 June 16

•   Deliberation Agenda

1. Investment in hydrometallurgy processes for nickel used for battery in Indonesia

Approved
2023-7 August 8

•   Deliberation Agenda

1. Resolution on dividend payment for the 2nd quarter of 2023

2. Transfer of steel-related business previously owned by POSCO Holdings and acquisition plan of POSCO's asset

•   Report Agenda

1. Major business performance of subsidiaries

Approved
2023-8 November 3

•   Deliberation Agenda

1. Resolution on dividend payment for the 3rd quarter of 2023

2. Amendments to the Model House Acquisition Plan

3. 2024 Safety and Health Plan

•   Report Agenda

1. Business Performance of the Group in the 3rd quarter of 2023

Approved
2023-9 December 19

•   Deliberation Agenda

1. Amendments to the Operating Regulations of Board of Directors to establish POSCO-style Governance

2. Medium to Long-term Management Strategies and 2024 Consolidated Management Plans

3. Liquidation of Financial Investment stocks

4. Acquisition of POSCO-Wide shares from POSCO-E&C

5. FY 2024 Brand Licensing Contract for "POSCO"

•   Report Agenda

1. Results of the 2023 Compliance with Compliance Control Standards

2. Operation plan for the year-end dividend record date for 2023

Approved

After Amendment

Approved

2023-10 December 21 1. The Operation Plan of the CEO Candidate Recommendation Committee

53

(January 1, 2024 ~ March 13, 2024)

No.

Date

Agenda

Approval

2024-1 January 31

•   Deliberation Agenda

1. Approval of the 56th financial statements and schedule for the general meeting of shareholders

•   Report Agenda

1. Business performance of the fiscal year of 2023 and Group ESG performance review

2. Report on internal control over financial reporting

3. Assessment on the effectiveness of internal control over financial reporting

Approved
2024-2 February 8

•   Deliberation Agenda

1. Recommendation of Inside Directors candidates (Representative Director Candidate)

Approved
2024-3 February 21

•   Deliberation Agenda

1. Recommendation of Inside Directors and Non-standing Director candidates

2. Partial Amendments of the Articles of Incorporation and regulations related to BoD

3. Agendas for the 56th general meeting of shareholders

4. Improvement of the company's performance evaluation system

Approved

After Amendment

Approved

Approved

After Amendment

Approved

ø

Major Activities of Outside Directors on the Board of Directors (January 1, 2023 ~ December 31, 2023)

No.

Date Participation of the Outside Directors
(the Number of total Outside Directors)		 Remarks

2023-1

January 27 7 (7) - 

2023-2

16, 20 February 7 (7) - 

2023-3

March 17 7 (7) - 

2023-4

April 7 7 (7) - 

2023-5

May 12 7 (7) - 

2023-6

June 16 7 (7) - 

2023-7

August 8 7 (7) - 

2023-8

November 3 7 (7)

2023-9

December 19 7 (7)

2023-10

December 21 7 (7)
ø

Major Activities of Outside Directors on the Board of Directors (January 1, 2024 ~ March 13, 2024)

No.

Date Participation of the Outside Directors
(the Number of total Outside Directors)		 Remarks

2024-1

January 31 7 (7) - 

2024-2

February 8 7 (7) - 

2024-3

February 21 7 (7) - 

54

(3) Special Committees under the BoD and Their Activities (From January 1, 2023 to March 13, 2024)

○

ESG Committee (January 1, 2023 ~ March 16, 2023)

Date

Agenda

Approval

January 26, 2023

•   Deliberation Agenda

1.  Participation in paid-in capital increase of POSCO Silicon Solution for expansion of Si-anode materials (Internal transactions)

•   Report Agenda

1.  ESG performance of POSCO GROUP in 2022

2.  POSCO 2050 Carbon Neutral Basic Roadmap

Approved
March 15, 2023

•   Report Agenda

1.  Comparison of Technological Development of Hydrogen Reduction Steel

2.  Government support on Carbon Neutral and cases of other countries

3.  2023 POSCO Group ESG Management Plan

○

ESG Committee (March 17, 2023 ~ December 31, 2023)

Date

Agenda

Approval

May 10, 2023

•   Deliberation Agenda

1.  Appointment of compliance officer

2.  POSCO International's 'POSCO' Brand Usage Contract (internal transaction)

3.  Plan of publishing Corporate Citizen Report

•   Report Agenda

1.  Operational status of ESG risk management of FY 2022

2.  ESG performance of POSCO GROUP in 1Q, 2023

Approved
June 14, 2023

•   Report Agenda

1.  Global monitoring/supervision policies and implications related to Low Carbon and Eco-friendly issues -

2.  Investment in hydrometallurgy processes for nickel used for battery in Indonesia

3.  JV investment in STS upstream of POSCO Indonesia

August 3, 2023

•   Deliberation Agenda

1.  Transfer of steel-related business previously owned by POSCO Holdings and acquisition plan of POSCO's asset

2.  Acquisition of shares of POSCO Capital previously owned by POSTECH

•   Report Agenda

1.  Business performance of 2nd quarter of 2023

2.  Resolution on dividend payment for the 2nd quarter of 2023

3.  Operation status of the Fair Trade Self-compliance Program in the first half of 2022

Pre-Deliberation

Approved

September 27, 2023

•   Deliberation Agenda

1.  Change of lease contract for POSCO Center in 2023

Approved
October 31, 2023

•   Deliberation Agenda

1.  Investment in venture funds to discover new growth projects

•   Report Agenda

1.  Amendments to the Model House Acquisition Plan

2.  Group ESG performance review

3.  Results and countermeasures of physical risks at major worksites

Approved

55

December 15, 2023

•   Deliberation Agenda

1.  Divestment of stock of Woori Finance Holdings Co., Ltd.

2.  FY 2024 Brand Licensing Contract for "POSCO"

3.  Acquisition of POSCO-Wide shares from POSCO-E&C

4.  Disposal of POSCO A&C and NEH's equity previously owned by POSCO Holdings

5.  2024 POSCO Center Lease Contract

6.  Purchase of RIST-owned research equipment following transfer of RIST research function

•   Report Agenda

•   Operating status of the Fair Trade Compliance Program (CP) in the second half of 2023

•   Status of Securing and Fostering ESG Experts at POSCO Group

•   Supply Chain ESG Survey Results and Future Plans

Pre-Deliberation

Pre-Deliberation

Pre-Deliberation

Approved

Approved

Approved

○

ESG Committee (January 1, 2024 ~ March 13, 2024)

Date

Agenda

Approval

February 19, 2024

•   Deliberation Agenda

1.  Partial Amendments of the Articles of Incorporation and regulations related to BoD

•   Report Agenda

1.  Group ESG Data Portal App Implementation Results and Future Plans

2.  Adjustment result of physical risk analysis value at major worksites

Approved
○

Director Candidate Recommendation and Management Committee (January 1, 2023~March 16, 2023)

January 11, 2023

•   Deliberation Agenda

1.  Qualification review and recommendation of the Outside Directors candidates

Approved
February 16, 2023

•   Deliberation Agenda

1.  Qualification review and recommendation of the Outside Directors candidates

2.  Qualification review of the Inside Directors and Non-standing Director candidates

3.  Preliminary review on appointment of members of Special Committee members

Approved

Preliminary deliberation

Preliminary deliberation

○

Director Candidate Recommendation and Management Committee (March 17, 2023 ~ December 31, 2023)

Date

Agenda

Approval

November 2, 2023

•   Deliberation Agenda

1.  Resolution to operate an Outside Director Candidate Recommendation Advisory Panel

•   Report Agenda

1.  Improvement of Outside Director appointment process 2024

Approved
○

Director Candidate Recommendation and Management Committee (January 1, 2024 ~ March 13, 2024)

56

Date

Agenda

Approval

January 3, 2024

•   Deliberation Agenda

1.  Evaluation of the business performance for the fiscal year of 2022

Approved
February 21, 2024

•   Deliberation Agenda

1. Recommendation of the Outside Directors candidates

2.  Qualification review of the Inside Directors candidates and Non-Standing Director candidate

3.  Preliminary review of members of special committee under BoD

Approved

Preliminary deliberation

Preliminary deliberation

February 23, 2024

•   Deliberation Agenda

1.  Preliminary review of members of special committee under BoD

Approved
○

Evaluation and Compensation Committee (January 1, 2024 ~ March 16, 2023)

Date

Agenda

Approval

January 27, 2023

•   Deliberation Agenda

1.  Evaluation of the business performance for the fiscal year of 2022

Approved
○

Evaluation and Compensation Committee (March 17, 2023 ~ December 31, 2023)

Date

Agenda

Approval

November 17, 2023

•   Deliberation Agenda

1.  Establishment of operational guidelines following mandatory introduction of Clawback Policy for listed companies on the New York Stock Exchange

Approved
○

Evaluation and Compensation Committee (January 1, 2024 ~ March 13, 2024)

Date

Agenda

Approval

February 6. 2024

•   Deliberation Agenda

1.  Evaluation of the business performance for the fiscal year of 2023

Approved
February 19, 2024

•   Deliberation Agenda

1.  Improvement of the company's performance evaluation system

Preliminary deliberation
○

Finance Committee (January 1, 2023~March 16, 2023)

Date

Agenda

Approval

- Not Applicable -

57

○

Finance Committee (March 17, 2023 ~ December 31, 2023)

Date

Agenda

Approval

April 4, 2023

•   Deliberation Agenda

1.  Investment in Indonesian Nickel Refinery Business for Battery Production Purposes

Preliminary deliberation
May 9, 2023

•   Deliberation Agenda

1.  Domestic Nickel Sulfate Refining Joint Venture

Preliminary deliberation
June 14, 2023

•   Deliberation Agenda

1.  Investment in hydrometallurgy processes for nickel used for battery in Indonesia

•   Report Agenda

1.  JV investment in STS upstream of POSCO Indonesia

Preliminary deliberation
August 2, 2023

•   Deliberation Agenda

1.  Transfer of steel-related business previously owned by POSCO Holdings and acquisition plan of POSCO's asset

•   Report Agenda

1.  Business performance of 2nd quarter of 2023

2.  Resolution on dividend payment for the 2nd quarter of 2023

Preliminary deliberation
October 31, 2023

•   Deliberation Agenda

1.  Investment in venture funds to discover new growth projects

•   Report Agenda

1.  Amendments to the Model House Acquisition Plan

Approved
December 14, 2023

•   Deliberation Agenda

1.  Liquidation of Financial Investment stocks

2.  Acquisition of POSCO-Wide shares from POSCO-E&C

Preliminary deliberation Preliminary deliberation

December 14,

December 21,

2023

•   Deliberation Agenda

1.  Establishment of Rare Gas Separation Refining JV

(continued from previous BoD meeting on Dec 14 and approved on Dec 21)

Approved

58

○

Finance Committee (January 1, 2024~March 13, 2024)

Date

Agenda

Approval

- Not Applicable -

B. Audit Committee

(1)

Composition of the Audit Committee

Name

Qualifications

Remarks

Sohn, Sung-Kyu*

Kim, Sung-Jin

Yoo, Jin-Nyong

Satisfies the requirements stipulated in the Korean Commercial Act

Chairman

-

-

*

Sohn, Sung-Kyu is an accounting and financial expert

(2)

Major Activities of the Audit Committee (January 1, 2023 ~ December 31, 2023)

Session

Date

Agenda

Approval

1

January 26

•   Deliberation Agenda

1.  Consent to appoint a person in charge of internal audit department

2.  Evaluation of the Operation of the Internal Accounting Management System in FY2022

3.  Approval of audit and non-audit services for POSCO Holdings and subsidiaries

4.  Audit Committee activities in 2022

•   Report Agenda

1.  Report of operation of internal control over financial reporting in 2022

Approved

- 

2

February 15

•   Deliberation Agenda

1.  Internal audit result for the year 2022

2.  Internal audit performance of 2022 and plans for 2023

•   Report Agenda

1.  External audit result for the year 2022

Approved

- 

3

February 20

•   Deliberation Agenda

1.  Review of the agendas for the Ordinary General Meeting of Shareholders

Approved after

Amendment

4

March 17

•   Deliberation Agenda

1.  Appointment of the chairman of the audit committee

Approved

5

April 27

•   Deliberation Agenda

1.  Results of internal audit on the consolidated financial statements for the 1st quarter of 2023

•   Report Agenda

1.  The results of the 20-F audit results for 2022 and the results of external reviews on the consolidated financial statements for the 1st quarter of 2023

Approved

59

6

August 4

•   Deliberation Agenda

1.  Internal audit performance for the 1st half of 2023 and plans for the 2nd half of 2023

2.  Results of internal audit on the consolidated financial statements for the 2nd quarter of 2023

3. Audit activity evaluation results of the independent auditor for the year 2022

•   Report Agenda

1. Results of external audit on consolidated financial statements for the 2nd quarter of 2023

Approved

7

October 13

•   Report Agenda

1.  PCAOB Inspection

8

November 6

Deliberation Agenda

1.  Approval of non-audit services for POSCO Future M

2.  Results of internal audit on the consolidated financial statements for the 3rd quarter of 2023

•   Report Agenda

1.  Results of external audit on consolidated financial statements for the 3rd quarter of 2023

Approved

9

December 19

•   Deliberation Agenda

1.  Approval of audit and non-audit services for POSCO Holdings and subsidiaries

Approved
-

At General meeting of shareholders held on March 12, 2021, Audit Committee member, Kim, Sung-Jin was reelected as an Outside Director.

-

The expiration date of the term is the date of the GMoS

C. Voting Rights of Shareholders

(1)

The Cumulative Voting System: The cumulative voting system was introduced at the 36th general meeting of shareholders on March 12, 2004.

(2)

Deleting Article 25 (The agenda Exercise of Voting Right in Writing) of Articles of Incorporation was proposed at 55th general meeting of shareholder on March 17, 2023. Please refer to our previous disclosure submitted at SEC on February 22, 2023 for more information.

(3)

The Electronic Voting System: The electronic voting system was determined at the Board of Directors meeting on February 20, 2019.

60

D. Compensation of Directors and Officers

(1) The Salary of Directors and Audit Committee Members

(In millions KRW)

Category

No. of
people		 Total
payment		 Average payment
(Per person)		 Ceiling amount
approved at
the general
meeting of
shareholders		 Remarks

Inside Director

(Excluding Outside Director, Audit Committee Member)

5 8,173 2,005 10,000 - 

Outside Director

(Excluding Audit Committee Members)

4 465 114 - 

Audit Committee

Members

3 349 116 - 
ø

No. of people : The number of Directors and the Audit Committee members who are in office as of December 31, 2023. (Non-standing Director is included in the category of Inside Director).

ø

Total payment : The total amount of remuneration paid to all Directors, including the Audit Committee members, who served from January 1 to December 31, 2023. (Including directors who retired before December 31, 2023)

ø

Average payment per person : The sum of average payment per director per month in 2023

61

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POSCO Holdings Inc. published this content on 29 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2024 10:26:59 UTC.