GS Yuasa Corporation GS Yuasa Report 2023 For the fiscal year ended March 31, 2023


Corporate Philosophy

Innovation and Growth

We are committed to people, society and the global environment through innovation and growth of our employees and business entities.

Creating new value to realizing a sustainable society

President and Representative Director
GS Yuasa Corporation
Osamu Murao

  Today, when carbon neutrality has become an important social issue, the role expected of our Group’s products, which have the functions of storing energy and supplying it when needed, is becoming even greater than ever. I understand our corporate philosophy of “Innovation and Growth,” which was formulated in 2004 on the occasion of our management integration, to mean creating new value that contributes to society and thereby achieving sustained growth ourselves. To continue growing amid the changing social environment, we must further innovate the technologies that we have nurtured so far and become a company able to spread these technologies in society and implement energy management. To clearly document this course of action, we have revised our previous Management Vision and Management Policy and formulated a new Sustainability Management Policy. This document demonstrates our management stance of creating the new value required by the present age by capitalizing on the energy technology that we have fostered so far and growing together with society. I personally intend to take the helm and put the Sustainability Management Policy into practice throughout the entire Group with the aim of becoming an indispensable entity for society over the next century as well.

Vision 2035
(Long-Term Vision)

Vision 2035 Vision 2035

Vision of GS Yuasa in 2035

Based on the “Four Re’s” formula, we strive for innovation in energy technology, endeavor to address the challenges facing society through the development of mobility and other public infrastructures, and seek to create comfortable living environments and play our part in the global effort toward sustainability.

Vision images

Top Message

Osamu Murao Osamu Murao

Toward the next 100 years
enhancing corporate value through business structure reforms,
we aim to become an Energy Management Company

Osamu Murao President and Representative Director,
GS Yuasa Corporation

Policy on Sustainability Management

Our goal is to achieve sustainable growth and enhanced corporate value through our commitment to people, society, and the global environment

  The global trend toward carbon neutrality is accelerating, a trend we recognize as representing a major tailwind for the Company. This is because the fields in which our products and solutions can play an active role are expanding further as the importance of storage batteries grows, including with the electrification of the means of mobility and the growing deployment of renewable energy in public infrastructure. To contribute to the realization of a sustainable society in this environment, it is important that we innovate further in those technologies we have developed to date for storing and using electricity, and that we widely implement and operate those technologies as part of public infrastructure.
  Thus, in April 2023 we reviewed our previous “Management Vision and Management Policy” and formulated a new “Policy on Sustainability Management.” In it, we clearly set out our management stance of contributing to achieving a sustainable society through energy technologies. We also intend to contribute to solving sustainability issues, while aiming to enhance corporate value through sustainable growth for ourselves. We are confident that the growth of the Group’s employees and others involved with our business under this policy can contribute to people, society, and the global environment.
  This Policy on Sustainability Management also serves to supplement our corporate philosophy of “Innovation and Growth.” The word “Innovation” typically tends to be associated with groundbreaking new technologies or the invention of new products, but innovation is more than that. Innovation is also an effort to integrate, combine, and unify existing technologies and mechanisms to evolve them into something better. Further, this is not limited to the field of technology development; innovation also includes Improvement Activities carried out across a variety of divisions, from production sites to sales, quality assurance, human resources, and others. Small, everyday improvements create new value, and through these, we too can grow. The capabilities of each and every employee are essential if the Company is to grow sustainably. I tell them that I want them to work toward our goal of contributing to the realization of a sustainable society, and to remember to be constantly aware of innovation in addressing the work before them.

Vision 2035

Committing to solving social issues by focusing on mobility and public infrastructure

  In April 2023, we announced “Vision 2035,” our long-term vision. This defines GS Yuasa’s ideal vision for 2035 of achieving “Innovation and Growth” for the next 100 years, based on the DNA of our founders and the knowledge we have accumulated over a history of more than 100 years. This is a guideline for our strategy and may become something of a North Star for us to follow in the years to come. Our goal will be to contribute to solving social issues in the fields of mobility and public infrastructure, as we work toward the realization of a sustainable society and the creation of comfortable living environments for all. By steadily expanding our business, we aim to see 800 billion yen in net sales in fiscal 2035.
  Vision 2035 encompasses “Four Re’s,” key words aimed at achieving this vision.

Backcasting to define a path to realizing our ideal vision

  In formulating Vision 2035, we began by first predicting some of the long-term environmental changes in our areas of business. Global demand for storage batteries, our mainstay product, is expected to grow by more than 40 times, from 230GWh in 2019 to about 10,000GWh in 2050.
  In the mobility field, electrification aimed at achieving zero emissions is expected to accelerate, while advancements continue in self-driving technology. In response to this shift to electrification, we felt it necessary to also shift our business structure from one focused primarily on conventional lead-acid starter batteries to one centered on lithium-ion drive batteries.
  In the public infrastructure field, meanwhile, the importance of storage batteries, which are necessary for adjusting supply and demand in power grids and business sites, is expected to grow further as deployment of renewable energy expands toward the realization of carbon neutrality. In addition, the importance of backup applications in areas such as electric power, information, and telecommunications infrastructure will increase further.
  In this market environment, we have thus set a firm direction aimed at steadily growing our business by riding global tailwinds and expanding in our areas of strength, while transforming our business structure.

A commitment to technology and trusting relationships with partners as strengths

  During our project to formulate Vision 2035, we had members at the section manager level, who are expected to be active on the front lines by sometime around 2035, to participate, starting with initial discussions of our vision and preparation of a draft. Later, our management team, including myself and our outside directors, examined the draft closely, discussing the future of the Company while working out a final version of Vision 2035.
  One of the most memorable parts of these talks was when we discussed the opinion that, given the financial and competitive environment, a large-scale investment in the lithium-ion battery business for BEVs might be too risky. Certainly, the decision to switch gears to lithium-ion batteries for BEVs from our base in lead-acid batteries, on which the Company had grown, was a decision that comes with some risk. That said, I personally felt that lithium-ion batteries for BEVs were a piece absolutely essential to our company’s growth. To compete in the BEV lithium-ion battery market, we cannot do business on our own— partnerships with companies that have extensive experience and expertise are critical. Our growth has continued thanks to collaboration and co-creation with a variety of partners, including Blue Energy Co., Ltd. and Lithium Energy Japan. That is why, as a technology-driven company since our founding, we must be thoroughly committed to technology. We have concluded that by doing so, partners will choose to work with us, and the Company can continue its sustainable growth with them.

Working toward sustainable corporate growth with lithium-ion batteries for BEVs and energy storage systems (ESS)

  As our first foray into the mobility field centered on lithium-ion batteries for BEVs, in July 2023 we established a joint venture company with Honda Motor Co., Ltd. The new company will promote R&D of lithium-ion batteries highly competitive on a global level to meet rapidly growing demand in the BEV market. At the same time, it will build a supply chain for key raw materials and efficient production systems with the goal of making a full-scale entry into the BEV business.
  In addition, leveraging the results of the new company’s R&D, a production line for lithium-ion batteries for BEVs is scheduled to begin operating in April 2027, with mass production starting in October. A series of production lines will be launched through 2030, and by 2035, we plan to expand production capacity for the Group as a whole to over 20 GWh/year.
  The success or failure of the development of lithium-ion batteries for BEVs is very important, as it will have a significant bearing on the strategy for the regular use field, such as for ESS (for stationaries) of renewable energy. Earnings for lithium-ion batteries for ESS, where bidding projects are numerous, have greater volatility when taken on alone. We believe that by taking advantage of our stable production capacity and technical expertise in lithium-ion batteries for BEVs we can reduce costs and increases competitiveness. Working steadily on development with Honda Motor Co., Ltd. will lead to expansion for both for BEVs and ESS.
  As we compete globally, we feel extremely fortunate to be able to pursue the BEV lithium-ion battery business with such an outstanding partner. Behind our realization of this partnership is the track record of and relationship of trust with Blue Energy, a joint venture launched with Honda Motor Co., Ltd. in 2009. I believe this allowed us to deliver steady growth in the hybrid electric vehicle (HEV) lithium-ion battery business while responding to Honda’s needs.
  In the field of public infrastructure as well, we are aiming to further expand our business by utilizing our production capacity based on lithium-ion batteries for BEVs. By increasing our competitiveness in lithium-ion batteries for ESS, we will expand our presence while supporting the safety and security of society as a whole.
  Having businesses in both the mobility and public infrastructure fields is our strength. Our goal is to enhance our corporate value by leveraging this strength in contributing to society.

Create investment resources for growth in the lead-acid battery business

  Meanwhile, we recognize that the market for lead-acid batteries for automobiles, an existing business, will gradually decline due to stricter regulations on the use of lead in Europe and other regions. That said, lead is a sustainable resource that is both abundant and easily recycled. We thus do not expect lead-acid batteries to disappear anytime soon in proportion to the shift to electrification. We also expect that this electrification will not progress uniformly through the world, as market conditions vary from country to country. We will ensure that we capture demand by monitoring the situation in each country on the axes of both time and region. We believe that industrial lead-acid batteries and power supply units will continue to grow in importance for backup applications, and we recognize that we have a significant role to play in that market. Profits earned after reaping cash from these markets will be used as a source of investment in new areas. If, on top of that, a certain level of business remains for automotive lead-acid business, we believe this will be even more beneficial to the Company.

Strengthening R&D and new initiatives for the future

  Our research and development strategy under Vision 2035 will center around lithium-ion batteries, while also advancing R&D and commercialization of all-solid-state and other next-generation batteries. Among these, our research and development in advanced solid-state batteries, being conducted in collaboration with Osaka Metropolitan University, was selected in November 2022 as a Green Innovation Fund Project by the New Energy and Industrial Technology Development Organization (NEDO), a national research and development corporation. We will be accelerating the speed of our R&D efforts even further going forward as we work toward the commercialization of all-solid-state batteries.
  Beginning around 2035, we will also develop new initiatives, treating our accumulated, diverse technology and expertise as the seeds of new business creation. We have already launched our “Biz Challenge” project, recruiting ideas in-house for new business creation, and more than a dozen business ideas have already been selected as of the end of first-round submissions. We are beginning shape potential businesses from among those diverse submissions, including ideas for derivative business areas utilizing the customer bases, business infrastructure, and technologies of our existing businesses, as well as businesses that add value to existing products by incorporating digital technology. The applicants have all been highly motivated and many of our employees have shown they inherit our founding spirit of challenge. I am reminded that this is a valuable asset for the Company’s future, and that it can lead to strengthening our human capital going forward.

Review of the Fifth Mid-Term Management Plan

Fifth Mid-Term Management Plan numerical targets achieved

  In our fiscal 2022 results, net sales, operating income, and net profit all increased and set new record highs, and in this, the final fiscal year of the Fifth Medium-Term Management Plan, we succeeded in achieving our numerical targets.
  Among the achievements of the Fifth Mid-Term Management Plan, we can point to the automotive battery business, where synergistic effects with the lead-acid battery business transferred from Panasonic Corporation and the conversion of our site in Turkey into a consolidated subsidiary both led to strong results.
  In the industrial battery and power supply business, we have taken over the social infrastructure business of Sanken Electric Co., Ltd. and are exploiting synergies across multiple divisions, including procurement, development and manufacturing, and sales and service. Another major accomplishment was the order for and delivery of the world’s largest storage battery system for a wind power generation plant in Hokkaido, which includes undertaking maintenance and servicing work for a period of 20 years, allowing us to enter the “Koto-zukuri (service creation) business” which has been one of our goals. We would like to use this as an example of a business that can successfully earn revenue on an ongoing basis.
  In the automotive lithium-ion battery business, one major accomplishment was that we now have a structure for generating solid profits. In addition to the start of operations at the Blue Energy No. 2 Plant, we also began supplying lithium-ion batteries for HEVs to Toyota Motor Corporation, allowing us to lay the groundwork for an expansion both in business scale and in profits. We have also received numerous inquiries from other automobile manufacturers, increasing our expectations for this mainstay business going forward.
  Since we failed to achieve our targets under our Third and Fourth Mid-Term Management Plans, we advanced our goals for the Fifth Mid-Term Management Plan with the strong determination that the entire Group would work together to achieve them. The fact that we were able to do what was needed and complete the plan under unexpectedly challenging business conditions—including the COVID-19 pandemic—gave us confidence.

Outlook for the Sixth Mid-Term Management Plan

Three years aimed at laying the foundation for even greater growth

  Our Sixth Mid-Term Management Plan began in fiscal 2023. We have positioned these next three years as a time for laying the foundation for the Group to make even greater leaps forward as we work toward achieving our ideal Vision 2035. To that end, we will implement three measures. The first measure calls for putting in place development, production and supply systems for lithium-ion batteries for BEVs. Preparations will move forward steadily toward the start of mass production in fiscal 2027.
  The second measure is the further reinforcement of earning capacity in existing businesses. I have long spoken on various occasions of the importance of ambidextrous management. It is important for the Company’s sustainable growth that we focus on expanding earnings in our existing businesses as well as reinvesting profits generated by those businesses in growth areas. We will improve capital efficiency by establishing optimal production systems, including consolidation of production systems both in Japan and overseas, to secure the profits that are the main source of investment for growth. In addition, over the course of the Sixth Mid-Term Management Plan, we will expand production capacity in lithium-ion batteries for HEVs to 70 million cells annually to meet demand and increase profitability.
  The third measure is digital transformation (DX) and strengthening of new businesses. In DX, we are already promoting the use of AI, IoT, and other digital technologies in a variety of settings in our R&D and sales divisions. In addition, we will continue to invest in human capital, and, as mentioned earlier, will work toward the commercialization of new businesses starting around 2035.
  By advancing these kinds of strategies, our goal for fiscal 2025, the final fiscal year of the Sixth Mid-Term Management Plan, is to generate net sales of 610.0 billion yen and operating profit of 41.0 billion yen before amortization of goodwill.


  ESG initiatives are essential as we work to achieve Vision 2035. I realize this will require firm commitment on the part of management. In fiscal 2023, we restructured the CSR Committee as the Sustainability Promotion Committee. We intend to continue promoting our sustainability initiatives while also stimulating further discussions regarding sustainability at our Board of Directors’ meetings.

E: Environment

  In May 2021, the Company announced the “GY 2030 Long-Term Greenhouse Gas Target.” Since then, we have been engaged in efforts aimed at the transition to a decarbonized society, including switching 100% of the electricity used at our Kyoto Plant to renewable energy. In April 2023, we announced the “GY 2050 Carbon Neutrality Target.” In that statement, we expressed our commitment to moving steadily forward with three key measures to achieve carbon neutrality: (1) Promotion of energy conservation measures; (2) Promotion of renewable energy power generation; and (3) Procurement of renewable energy.
  In addition, we also recognize that our products have a very significant role to play as society as a whole works toward achieving carbon neutrality. We will continue to expand sales of environmentally considered products to reduce CO2 emissions and contribute to the global environment and society.

S: Social

  We place great importance on the human capital that is the foundation of any company. For us to continue to grow sustainably and provide new value to society, it is essential that we ensure human resources and an organization that are not only strong, but also flexible enough to adapt to change. We will continue offering new value to society by working to strengthen our human capital and by encouraging the hiring and training of self-directed personnel, those who will bring a spirit of challenge to the goal of creating new businesses.
  We will also focus even more on diversity, equity, and inclusion (DE&I) initiatives, further developing systems and programs that support the personal growth of human resource with diverse personalities and capabilities. These will enable them to play an active role in accordance with their individual life stages, characteristics, and willingness to take on challenges. Note that we have established an employee engagement KPI to assess these efforts, a way of linking the enthusiasm of our employees to the growth potential of the Company. In advancing Vision 2035, we will strengthen cooperation between the business and human resource divisions so that business issues can be incorporated into individual employee issues and goal setting.
  Human resources are also key to DX, which we are promoting throughout the Company. We are currently advancing an in-house DX human resource development plan, and in fiscal 2022, we implemented a Company-wide e-learning program in basic DX knowledge. In fiscal 2023, we plan to open a “DX training dojo” to provide specialized training for members recommended by each division to develop more advanced DX human resources.

G: Governance

  We are currently considering the possibility of reflecting ESG evaluations, including performance against environmental goals and employee engagement, in our executive evaluations. This is something that has been discussed by our Nomination and Compensation Committee for some time. We plan to establish appropriate KPIs for ESG issues and their evaluation according to each executive’s area of responsibility, incorporating them into our executive compensation system.
  We also intend to further expand our succession plan. In addition to candidates for CEO, CFO, and other director positions, we are currently engaged in discussions with the Human Resources Division, directors in charge of human resources, and the heads of our business divisions to create a framework for developing successors, with a view to three years out, for executive officers, business unit managers, the heads of overseas sites, and others.

To our stakeholders

Further deepening dialogue as we work to achieve sustained growth

  Our PBR currently remains low at around 1x. I believe this is due in part to the fact that we have not been able to present our growth story to our stakeholders in terms of return on capital and growth potential. This time, we have announced our growth story, and will continue to firmly lay the groundwork for going forward in our Sixth Mid-Term Management Plan. We expect, however, that the results of those efforts will not become apparent until fiscal 2027 or later. In the course of this process, we will place an emphasis on dialogues with our stakeholders, listen respectfully to your opinions, and work to deepen your understanding of the decisions we make.
  With our announcement of Vision 2035, I think we have clearly presented to our stakeholders the direction and path we should proceed along going forward, including what we value, what we will change, and where we are headed for the future. Many of our stakeholders consider us to be a stability-oriented company. This time, however, we have decided to make a major switch in our business base by focusing on growth areas, shifting direction toward lithium-ion batteries for BEVs while also applying them to lithium-ion batteries for ESS. I cannot envision our sustainable growth as a company under any other policy.
  This decision is aimed at utilizing our accumulated technology not merely to sell things, but to become a company capable of controlling and managing energy as a whole. Our goal is to move from our existing stance as an energy and device company to become an energy management company. I hope you will continue to look forward to the future of the Group, and support us in our efforts.

August, 2023

President and Representative Director,
GS Yuasa Corporation
Osamu Murao

Value Creation

Value Creation Process

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Underpinnings of Value Creation

  • stable nancial foundation bolstered by the lead-acid battery business

    1 A stable nancial foundation bolstered by the lead-acid battery business

    Our wide range of lead-acid starting batteries for automobiles support the Group’s nancial foundation. In addition to those for new automobiles, profit is obtained continuously through demand for replacement with vehicle maintenance and inspections as the focus, and stable earnings can also be gained from backup batteries and power supplies and lead-acid batteries for forklifts, which support public infrastructure.

  • Highly reliable production, sales, and maintenance networks that respond to market needs

    2 Highly reliable production, sales, and maintenance networks that respond to market needs

    We establish a global network of business sites and offer proposals tailored to needs in each region. In the automotive battery business, we have a network of more than 4,000 dealers nationwide that can propose the optimal battery to users. In the industrial battery and power supply business, our strength is the provision of services up to maintenance and inspections at more than 100 service sites in Japan.

  • Advanced technology development capabilities that support business

    3 Advanced technology development capabilities that support business

    As a pioneering manufacturer of automotive lithium-ion batteries, since supplying the lithium-ion batteries for the world’s first mass-produced EVs and HEVs, we have focused on cutting-edge technology and product development, and our products are used in the models of many Japanese automakers.
    We are developing high-capacity, high-output lithium-ion batteries for BEVs and ESS and also focusing on R&D and practical application of next-generation batteries with “Sustainability” and “High energy density” as the key concepts.

  • Strong brand power and competitiveness supported by business partnerships

    4 Strong brand power and competitiveness supported by business partnerships

    The Group’s lead-acid batteries maintain high market shares in both the automobile and motorcycle battery markets. Since every vehicle including electric vehicles contains a lead acid battery, we believe that demand will be maintained in the future. We are also maintaining our leading share of the domestic market for backup applications and forklifts.

  • A workforce that upholds and passes down technologies rooted in sound understanding of the corporate philosophy

    5 A workforce that upholds and passes down technologies rooted in sound understanding of the corporate philosophy

    We promote integrated management as a Group and implement “Innovation and Growth” imbued with our inventor and challenge spirit on a daily basis. We hold "Mono-zukuri (product creation) expert" education workshops and case presentations of team activities to drive kaizen (improvement). Also, each department registers topics in a dedicated database and undertakes Improvement Activities activities on a daily basis, which leads to visualization and invigoration of activities. In this way, the Group’s manufacturing technologies are maintained and passed down through various activities.

  • A corporate culture that disseminates the corporate philosophy and pursue sustainability

    6 A corporate culture that disseminates the corporate philosophy and pursue sustainability

    We reviewed the existing Management Vision and Management Policy and formulated a new Sustainability Management Policy in April 2023. We have been holding sustainability workplace meetings to address topics related to CSR policies since fiscal 2018 with the objectives of establishing business activities with an awareness of sustainability and promoting awareness of compliance.

Sixth Mid-Term Management Plan
(Fiscal 2023-2025)

  • 1

    Development of batteries for BEVs

    • Development of a high-capacity, high-output lithium-ion batteries by utilizing joint venture company with Honda
    • Establishment of production and supply systems of batteries for BEVs to expand mobility and public infrastructure business
  • 2

    Reinforcement of earning capacity in existing business

    • Thorough value-added creation and improvement in profitability
    • Maximization of profits due to unparalleled superiority in Industrial Batteries and Power Supplies Business in Japan
    • Transformation of regional strategy, including review of business in China, maximization of profits by concentrating resources at main sites
  • 3

    DX / new business

    • DX promotion to enable business structure transformation
    • Create new business that contribute to solving social issues

Message from the Director
in Charge of Finance

Hiroaki Matsushima Hiroaki Matsushima

Maximize profit through ROIC management and use optimal capital procurement to make ever greater advances

Hiroaki Matsushima GS Yuasa Corporation
Director and Chief Financial Officer

The CFO’s Mission

Act as a Compass for Management

  When I took up this post one year ago, I stated in this report, “The basic mission of the CFO is to support the sustainable growth of the Company from a finance viewpoint.
  Maintaining a long-term perspective, I hope to steadily enact capital policies and financial strategies that help enhance our corporate value.” My thoughts on this have not changed, but I feel that my awareness of the significance of my mission and the degree of my responsibility has deepened.
  The Group has grown by providing value to society through the manufacture and sale of lead-acid batteries as its core business for more than 100 years. Amidst the movement toward carbon neutrality, however, for the Group to continue practicing its corporate philosophy of “Innovation and Growth” and pursue sustainable growth, we believe that the Group needs to evolve into an enterprise that contributes even more to society, and management has repeatedly examined the future that we should seek and the path to get there. In April 2023, we announced Vision 2035, our long-term vision. I believe that we were able to demonstrate, both internally and externally, the Group’s strong commitment to transforming business structures in the coming 100 years and focusing on mobility and public infrastructure fields.
  To expand the mobility and public infrastructure fields, we are about to make a series of large-scale investments that are an order of magnitude greater than anything we have done in the past. We also need to investigate the various options concerning capital policies that will serve as the basis for these investments. It goes without saying that we must ensure returns to shareholders and protect the Group’s financial soundness. If Vision 2035 is the north star showing the direction that we will head, then my role as CFO is to serve as the compass so that we do not lose sight of our path. I hope to perform this role and guide GS Yuasa in the correct direction.
  The recent announcement of Vision 2035 can be said to be a significant historical turning point for the Group. My desire to make the Group a business enterprise that in 20 and 30 years from now employees will be happy to work for is stronger than ever.

Review of the Fifth Mid-Term Management Plan

Numerical Targets Achieved

  In fiscal 2022, the final year of the Fifth Mid-Term Management Plan, consolidated net sales reached 517.7 billion yen as a result of an increase in the sales volume of lithium-ion batteries for HEVs, the conversion of our site in Turkey into a consolidated subsidiary, and effects from the lower value of the yen. In terms of profit, operating profit before amortization of goodwill increased substantially to 32.1 billion yen due to steady progress in reviewing sales prices in response to effects from high raw material costs. As a result, we largely achieved the numerical targets set under the Fifth Mid-Term Management Plan.
  The original term of the plan was extended one year due to the unexpected COVID-19 pandemic during the plan, but I view the achievement of the targets very highly. With regard to growth strategy, we brought to fruition many of the measures that we have been steadily carrying out for the past four years. In particular, the facts that the automotive lithium-ion batteries business has become profitable and further growth in earnings is now in sight are highly significant as the turning point from upfront investment to reaping profits.
  On the other hand, there are issues that need to be addressed. During the Fifth Mid-Term Management Plan, Lithium Energy Japan and our sites in China recorded impairment losses, and our target for return on equity (ROE) was not achieved in the final year of the plan. Also, large-scale investments totaling approximately 81.0 billion yen including the expansion of production capacity of the Blue Energy Co., Ltd. No.2 plant and investment to increase production at overseas sites resulted in expansion of the balance sheet, and asset efficiency deteriorated somewhat as a result of this. We will continue to make efforts during the term of the Sixth Mid-Term Management Plan to improve those issues that have become apparent.

Outlook for the Sixth Mid-Term Management Plan

Building Foundations for Achieving the Ideal under Vision 2035

  The Sixth Mid-Term Management Plan, which started in fiscal 2023, is positioned as a three-year plan for building the foundations for transformation toward achieving our ideal vision for 2035. For the final year of the plan, we will pursue further improvement of results including net sales of 610.0 billion yen and operating profit before amortization of goodwill of 41.0 billion yen.
  During this period, my most important roles will be to bolster the cash-generating capacity of existing businesses to ensure we generate the funds needed to build foundations and to pursue optimal capital allocation so that we can implement business structure reforms. I believe that growth investment is based on a cycle in which cash generated from existing businesses is used as a source of funds and the cash is allocated to priority markets. In addition to the automotive batteries business and industrial batteries and power supplies business, in the automotive lithium-ion battery business, lithium-ion batteries for HEVs can generate substantial cash. We will seek to use this cash to achieve growth over the medium to long term by investing in growth fields including mobility and public infrastructure.

Capital Policy

Raising Capital for Upfront Investment for the Future is an Issue

  The term of the Sixth Mid-Term Management Plan will be a three-year period for upfront investment. We plan to make large-scale investments in further increasing production capacity of lithium-ion batteries for HEVs and production of lithium-ion batteries for HEVs, which is expected to become a new pillar of business in the future. We may also implement M&A if we determine that we can steadily recover cash and a business will contribute to corporate growth.
  Taking these factors into consideration, we estimate that investing cash flow will be approximately 190.0 billion yen. In contrast to this, the Group is expected to generate cumulative operating cash flow of approximately 140.0 billion yen over the next three years, while free cash flow will be minus 50.0 billion yen. When capital needed for shareholder returns is added, we need to raise approximately 80.0 billion yen. These figures only include a portion of the investment relating to production of lithium-ion batteries for HEVs, and we expect to need to raise even more capital in the future.
  As a CFO, I am aware that our biggest issue is securing the funds that we will need for large-scale investment in the future. As I mentioned earlier, we will first work to maximize operating cash flow, but will also reduce cross shareholdings to improve capital efficiency. For some time, we have had a basic policy of reducing cross shareholdings that do not lead directly to the generation of profit, and we will continue to carry out divestment after rigorously assessing relationships with partner companies in the future and allocate the proceeds to growth investment.

ROIC Management

Set ROIC Target of 10% and Raise Capital Efficiency

  I recognize that generating returns that exceed the cost of capital and improving capital efficiency are important missions of the CFO. In the Sixth Mid-Term Management Plan, in addition to a target of ROE of 8% or more, we set a management target of ROIC of 10% or more.
  From the perspective of capital efficiency, in the automotive batteries business (Japan), we expect to maintain ROIC at a high level, so it will be crucial to earn as much cash as possible while we can and reinvest it in growth areas. In the automotive batteries business (overseas), we will strategically allocate resources to each region to raise capital efficiency and maximize profits. In the industrial batteries and power supplies business, we will steadily secure profits in the emergency field, which is a solid earnings base, and link this to additional business growth in the regular field including renewable energy. In the automotive lithium-ion batteries business, sales of lithium-ion batteries for HEVs are expanding and profitability is increasing, but considering the investment that will be necessary for BEV batteries in the future, we predict that there is a high likelihood that ROIC will decline temporarily, even if we are able to use subsidies from the Ministry of Economy, Trade and Industry. We see the next several years as a period to accumulate energy to leap forward so that we can increase business growth starting in fiscal 2027, and we plan to conduct management from a medium- to long-term perspective.

Expansion from the Bottom-Up and Top-Down

  We seek to improve the earnings capacity of the Group as a whole by reinforcing profit management on the business division level. When calculating ROIC, operating profit after tax is generally used as of the numerator, but we use operating profit before amortization of goodwill. This is because we seek to increase understanding of ROIC by using operating profit, which has already been introduced as a target management indicator for business divisions, in order to expand ROIC management throughout the entire company.
  To promote a change in awareness concerning the execution of business based on an awareness of invested capital, we hold regular internal study sessions regarding ROIC for managers and front-line employees. In addition, we seek to establish ROIC throughout the organization by linking it to the TQM activities implemented by individual departments and enabling each employee and each department to make improvements autonomously.
  In addition to this bottom-up expansion of understanding, we are also conducting top-down expansion. We are introducing evaluation criteria that clearly re ect the degree of achievement of ROIC targets for management.

To Shareholders and Investors

Building Deeper Relationships of Trust Through Dialogue

  The Company positions shareholder returns as the highest-priority management issue, and we return profits to shareholders after comprehensively considering consolidated financial performance, internal reserves for future growth, financial conditions, and other factors. During the term of the Sixth Mid-Term Management Plan, which will be a period for upfront investment, we will continue to provide shareholder returns with a total payout ratio target of at least 30%. Taking shareholder interests into consideration, we will use profit before amortization of goodwill as the basis for calculating the total payout ratio.
  Regarding shareholder dividends for fiscal 2022, we paid 50 yen per share, the same as in the previous fiscal year. In fiscal 2023, assuming that we achieve our profit forecasts, we plan to pay an interim dividend of 15 yen per share and a year-end dividend of 35 yen per share, for an annual dividend of 50 yen per share.
  To increase shareholder value, we believe it is important to raise shareholder returns through improved business performance, leading to higher stock prices over the long term. Currently, our PBR is at around 1x, and it is my understanding that what we can do as a company to increase the stock price is to understand the expected rate of return by engaging in active dialogue with shareholders and investors, ensure that shareholders and investors have a proper understanding of the Company’s growth strategies, and steadily execute and achieve the stories portrayed by those strategies.
  I hope that you understand the vision for the future and the value creation story depicted by the Group in Vision 2035 and that you will closely monitor the Group’s growth from a medium- to long-term perspective, rather than a short-term perspective. We hope to provide returns that exceed expectations to those who believe in the future of the Group and continue to support us.

August, 2023

Director and Chief Financial Officer
GS Yuasa Corporation
松島 弘明

Strategies by Business Segment

Automotive Batteries

Automotive Batteries

Reforms for more robust systems in line with changes in the business environment

Takashi Abe Director
Business Unit Manager of Automotive Batteries
GS Yuasa International Ltd.

  In the recently-announced Vision 2035, we anticipate a challenging market environment for lead-acid batteries in light of the electrification trend. The term of the Sixth Mid-Term Management Plan will be an extremely important period for examining how the positioning of lead-acid batteries will change amidst the electrification trend as well as in which regions demand will increase.
  Amidst changes in the lead-acid battery market, it is necessary that we refine even further our technology development capabilities for continuously providing high-performance products, manufacturing and production technology capabilities for continuously ensuring stable product quality, and technical service capabilities for supporting product safety in the market. There are no goals in manufacturing, and consequently, we will continue to refine our on-site capabilities and work to achieve even more ambitious targets.
  A major target of the Sixth Mid-Term Management Plan is the implementation of reforms to transform systems so that they can reliably generate profits no matter what changes occur in the market, that is, to create robust systems. We will raise profitability by concentrating management assets in high-efficiency areas.

Automotive Batteries (Japan)

  • Composition of net sale
  • Net sales
  • Operating income

Automotive Batteries (Overseas)

  • Composition of net sale
  • Net sales
  • Operating income
Industrial Batteries and Power Supplies

Industrial Batteries and Power Supplies

Contributing to the development of sustainable public infrastructure and securing profits

Takashi Taniguchi Managing Director
Business Unit Manager of Industrial Batteries and Power Supplies
GS Yuasa International Ltd.

  Under the Green Growth Strategy announced by the Japanese government, the composition of electric sources will be drastically changed to achieve carbon neutrality by 2050, and it is expected that renewable energy will account for 50% to 60% of all energy. Under these circumstances, the Company declared a policy of ensuring high profitability by contributing to the realization of sustainable public infrastructure in its Vision 2035 plan.
  Under the Six Mid-Term Management Plan, we will maintain our market shares in the emergency field, which is expected to experience firm demand, while formulating scenarios necessary for growth including development of new ESS products and cutting the cost of forklift led-acid batteries overseas in response to robust demand in the emergency field and overseas markets, and we will take action to achieve the plan. The Sixth Mid-Term Management Plan is a stepping stone for major growth in the future. We will lay the foundations for expanding business in the public infrastructure field so that we can achieve the Vision 2035 plan.

Industrial Batteries and Power Supplies

  • Composition of net sale
  • Net sales
  • Operating income
Automotive Lithium-ion Batteries

Automotive Lithium-ion Batteries

Achieving continuous growth in the automotive lithium-ion battery business

Ryoichi Okuyama Managing Director
In Charge of Lithium-ion Battery Development, Intellectual Property, and Lithium-ion Battery Business
GS Yuasa International Ltd.

  Premises of the Vision 2035 plan are that the trend towards carbon neutrality will take root and that the electrification of automobiles will undoubtedly advance. Currently in the BEV lithium-ion battery market, Chinese and South Korean manufacturers have taken the lead and competition is fierce, and it will be necessary for the Company to align with Japanese automakers and establish a strong presence.
  A key feature of the Sixth Mid-Term Management Plan for building the foundations needed to achieve the Vision 2035 is development of high-capacity, high-output lithium-ion batteries. As a first step, we established Honda-GS Yuasa EV Battery R&D Co., Ltd. in July 2023. The first and highest priority of this joint venture company will be to develop high-performance lithium-ion batteries for BEVs that will be highly competitive and become the global standard. To compete successfully in the BEV lithium-ion battery business, we must take aggressive action with unprecedented speed. Society also holds tremendous expectations for this business, and we will move forward with a strong commitment to succeeding.
  Demand for lithium-ion batteries for HEVs, particularly among Japanese automakers, is expected to remain brisk until the mid-2030s. The Company will increase its annual production capacity to 70 million cells by fiscal 2025, to ensure we fully satisfy the demands of automakers.

Automotive Lithium-ion Batteries

  • Composition of net sale
  • Net sales
  • Operating income
Specialized Batteries and Others

Specialized Batteries and Others

Refining technology development capabilities in response to high-level customer demands and raising production efficiency

Yoshiaki Namikawa Corporate Officer, GS Yuasa International Ltd.
President, GS Yuasa Technology Ltd.

  Aircraft lithium-ion batteries will be a pillar of sales under the Sixth Mid-Term Management Plan. We are developing the structures that will enable us to respond reliably to customer requirements. We are also actively expanding sales by developing new products and acquiring new customers, and we will continue to focus our efforts in these areas
  We will maintain stable supplies of lithium-ion batteries for submarines in the future to respond to continuous demand. Today, high-capacity and cost-competitive batteries are required, and in response, we are developing next-generation lithium-ion batteries for submarines. We are creating structures that will enable the Company to generate profits even during the development stage.
  We believe that we can contribute to the development of new public infrastructure by leveraging to the greatest possible degree GS Yuasa Technology’s strengths in the form of advanced technological capabilities, cutting costs, and raising production efficiency. We will continue to meet customer expectations based on an attitude of solving problems while tackling new challenges.

Specialized Batteries and Others

  • Composition of net sale
  • Net sales
  • Operating income

R&D Department Roundtable Discussion:
The Outlook for Next-Generation Battery Development

GS Yuasa released its R&D roadmap through 2050 in Vision 2035. The R&D Center of GS Yuasa International Ltd . recently held a roundtable discussion with three employees involved in next-generation battery development, the head of the R&D Center, and the head of the Corporate Strategic Planning Office, who is the officer responsible for R&D departments. The five participants discussed the outlook for next-generation batteries, the strengths of R&D departments, human resource development, and other topics.



Major Activities and targets (FY2025 Target)


Contribute to sustainability of the global environment

  • Developing and popularizing environmentally considered products
  • Promoting environmental protection
  • Ratio of reduction of CO2 emissions 15% or more (compared with FY2018)
  • Ratio of reduction of water use 15% or more (compared with FY2018)
  • Ratio of recycled lead used 70% or more
  • Percentage of environmentally considered products in total sales 45% or more


Respect for human rights and contribution to society

  • Respect for individuality
  • Respect for diversity
  • Human resources development
  • Enhancement of work environments and occupational health and safety
  • Provision of high-quality products
  • Responsible procurement promotion
  • Promotion of compliance education and thorough management of human rights risks
  • Promotion of diversity & inclusion
  • Promotion of work-life balance and health management
  • Promotion of human resource development programs
  • Promotion of occupational health and safety risk management
  • Strengthening of product safety management, promotion of quality improvement and strengthening of quality communication
  • Responses to responsible mineral procurement and managing CSR risks in the supply chain


Promotion of fair,
and swift group-wide governance

  • Thoroughly fulfilling our CSR and ensuring compliance
  • Protection of intellectual property
  • Thorough management of confidential information
  • Promotion of compliance education, provision and thorough of legal information
  • Thorough avoidance of infringement and elimination of counterfeit products
  • Promotion of security measures and information security training