10YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation
Long-term Vision and Medium-term Management Plan

Positioning of Long-term Vision andMedium-term Management Plan

Improve Corporate Value

Maximize economic value (financial value)and social/environmental value(non-financial value)

Realize Corporate Transformation

The YUASA TRADING is celebrating its 360th anniversary in 2026, and in 2017, the Group established theCreate a corporate group where
TSUNAGU innovation is the norm

YUASA VISION 360, and summarized our efforts to enhance corporate value and achieve a corporatetransformation in our three-year medium-term management plan, “Growing Together.” Growing Together
2026, which began in April 2023, represents the harvest stage for the achievement of YUASA VISION 360.
By promoting business models that aim to resolve social issues in manufacturing, home building,environment building, and town building, and becoming a company in which TSUNAGU innovation isHarvestnormalized, we aim to improve corporate value both in terms of social and environmental value.

2023

Cultivation

Growing Together 2023

2020

Foundation building

Growing Together 2020

< Core Measures >Build a sustainable management foundation based on“Total Coordination Skills,” “Challenging Spirit” and“Communication”(April 2017 - March 2020)

Corporate culture reform to discover growth areas andexercise total coordination skills< Core Measures Implemented >● Strengthened sales to local companies in overseas business●Concluded capital and business alliance with connectome.design inc. (AI consultant)●Strengthened interdepartmental cooperation by implementing a regional block

system●Fostered a corporate culture of challenge (implemented internal FA system,
internal recruitment system, and challenging project system)

3rd Stage(April 2023 - March 2026 )Aim to improve corporate value by proposing businesses(April 2020 - March 2023)< Core Measures Implemented >● Rolled out TSUNAGU solutions to solve social issues●Launched full-scale operation of carbon-neutrality promotion business inenvironmental area

● Business transformation

P.15- Improving profitability through TSUNAGU innovation- Developing our strengths in growing markets- Developing our business partner network● Strengthening management foundations

P.21- Corporate culture reform, DX promotion, Sustainability promotion- Strengthening Group Governance●Established cross-departmental organization (Growing Strategy Division) todemonstrate total coordination skills●Launched project for promotion of DX●Started initiatives for announcing and realizing Sustainability Declaration

2021

From October 2021

▼

2017

1st Stage

2nd Stage

Growing Together 2026

Sustainability Declaration

YUASA VISION 360 Where the Group should be in March 2026

P.23

Corporate Philosophy Honesty and Trust, Enterprise and Innovation, and Regard for the Individual

11

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Long-term Vision and Medium-term Management Plan

Review of the Medium-term Management Plan
▎Growing Together 2023 Summary■ 2nd Stage

Growing Together 2023
[Net sales]

450.0 432.1

����年�月期
FY2020[Ordinary profit]

10.0 10.0■FY2022����年�月期
FY2020471.0 462.7

����年�月期
FY2021Plan

����年�月期
FY2022Plan

12.5 11.7

����年�月期
FY2021Results

490.0 504.8 (billions of yen)

Results

14.5 15.3 (billions of yen)����年�月期
FY2022Growth strategy*1
Approx. 25%¥127.4 billion
Net sales

Core businesses¥15.3 billion

New businesses¥523.8 billion*2【¥504.8 billion】
Ordinary profit*1 The breakdown inside the graph corresponds to the color coding of the growth strategies on P.12.
*2 Net sales figures in brackets are after revenue recognition.

Main Initiatives
In Growing Together 2023, the second stage of YUASA VISION 360, we aim to evolve into a “TSUNAGU” Service
Integrated Shosha Group with a basic policy of strengthening our growth strategy, core business strategy, andmanagement foundation. Specifically, we regard the resolution of social issues as a growth business, and focus on
the development and commercialization of new products and services in collaboration with our own companies andother companies, and have put forward various plans for climate change measures, automation, labor saving, andthe like. Based on our Sustainability Declaration, we are promoting carbon neutrality for the entire Group and also
stepping up efforts to help build a sustainable society such as our domestic forest maintenance activities in Japan,
which have been certified under the J-Credit Scheme.
Results
Net sales for FY2022 were ¥504.8 billion, an increase of approximately 9% over the previous year. Operating income,ordinary profit, and net income all increased, marking FY2022 as a record high. From April 2020 to March 2023,
business activities overseas were largely restricted due to the impact of COVID-19. The percentage of growth strategy
fields increased to around 25%, contributing to the expansion of business performance.
Ongoing Topics
The final stage of the YUASA VISION 360 is the Growing Together 2026 Medium-term Management Plan, which
continues to address the following matters.
■ Improving the profitability of existing businesses■ Further promoting growth strategies■ Identifying things that should be changed and things that should not be changed, and implement measuresaccordingly■ Strengthening Group-wide initiatives for “Total Coordination Skills,” “Challenging Spirit” and “Communication”■ Building a system that can accumulate and utilize data for strategic planning and developing DX talent■ Promoting sustainability management

12

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Long-term Vision and Medium-term Management Plan

Review of the Medium-term Management Plan

▎Overview of Growth Strategy

The overall growth strategy set out in the plan was not achieved, but growth of about 20% for FY2019 was achieved, serving as a driver of growth for the
performance of the entire Group.
Growth Strategy

Overseas Business
Eco & Energy Solution
Business(currently Green Business)

FY2019 Results

FY2022 Plan

FY2022 Results

Growth from
FY2019

36.4

74.0

29.8

-18.1%

Summary

Sales and investment activities were restricted due to impact of COVID-19
Launched new business expansion with focus on making Thailand local subsidiary an
integrated entity●●Carbon-neutrality proposals through use of YES-net
Promoted sales that combined solar power generation, storage batteries, and V2H● Promoted JCM (Joint Crediting Mechanism) proposals
●

21.9

28.0

34.0

+55.3％

Robot (AI) & IoT Business(currently Digital Business)

6.5

17.0

11.7

+80.0%

Resilience & Security
Business

20.8

33.0

21.5

+3.4%

●

New Distribution Business

12.7

19.0

17.7

+39.4%●Long-term Care & Medical
Business

5.2

8.0

5.8

+11.5%

Food Equipment Business

-

8.0

2.9

-

Agriculture Process Business

1.9

5.0

2.1

+10.5%

Sharing Business
Growth Strategy—Total

-

5.0

1.9

-

105.4

197.0

127.4

+20.9％(All amounts are units of billion yen)●Promoted AI solutions with connectome.design inc.
Developed original robot products such as “Robo Combo” robot system●●Promoted development of TSUNAGU solution products (e.g., aluminum privacy fence
YACHIBEI®, bollard with flooding sensor “KIZUKI MIRAI”)
Expanded e-commerce transactions on Growing Navi site
Enhanced products posted on Growing Navi site●Promoted proposals for measures to combat infectious disease targeting long-termcare and medical facilities● Rolled out remote pre-fabricated ICU wards for developing countries●Concentrated efforts on original products through FOOMA (Food Processing
Technology EXPO), etc., but fell short of plan
● Original product development (device for detecting contaminants in beverages,
rewritable laser system, etc.)●Promoted proposals for original animal feed mixing machine (Appenki)
Promoted development of transportation system for harvesting work
● Promoted

proposals for UV-B fluorescent lamps for immuno-stimulation of crops●●

No progress in event rental business due to impact of COVID-19
Launched agricultural equipment and operator sharing business● Launched online rental business “Kariru Net”
●
●

13

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Long-term Vision and Medium-term Management Plan

Overview of Medium-term Management Plan “ Growing Together 2026 ”
Medium-term Management Plan “Growing Together 2026”▎Basic Policy

In the fields of manufacturing, home building, environment building, town building, we will work with our business partners to solve social issues through TSUNAGU innovation to create
new markets, expand domestically and internationally, to increase corporate value.

▎Priority Measures

Toward a Highly Profitable Business Model

Business
Transformation

P.16

Through TSUNAGU innovation, we will work together with our business partners to solve social issues and form highly profitable businesses.

Deployment of Growth Strategy

P.31

For the fiscal year ending March 31, 2026, we will increase the share of sales in growth strategy areas to approximately 48%.

Domestic and Overseas Market Expansion

P.18

We will expand new and growing markets created through TSUNAGU innovation by further developing our network of business partners both in Japan and overseas.

Strengthening
Management
Foundations

Corporate Culture Reform

P.44

We will foster a corporate culture that has normalized TSUNAGU innovation through the means of personnel reforms, environment building, and strengthened governance.

DX Promotion

P.40

To promote business transformation, we will build a data utilization infrastructure, develop DX talent, reform operational processes, and create innovation.

Sustainability Promotion

P.23

In line with our Sustainability Declaration, we will contribute to a sustainable society both in terms of our Group and our businesses.

Recognition of Issues

Ongoing Issues from the Previous Medium-term Management Plan

■ Improving the profitability of existing businesses■ Further promoting growth strategies■ Identifying things that should be changed and things that should not be changed, and implement measuresaccordingly■ Strengthening Group-wide initiatives for “Total Coordination Skills,” “Challenging Spirit,” and “Communication”■ Building a system that can accumulate and utilize data for strategic planning, and developing DX talent■ Promoting sustainability management

Business Transformation to a Market Out Approach■ Improving profitability by promoting TSUNAGU solution proposals that solve social issues■ Creating new markets and promoting growth strategies■ Market creation and deployment through existing trading networks■ Strengthening the management foundation, reforming the corporate culture, and promoting sustainability torealize transformation

14

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Long-term Vision and Medium-term Management Plan

Overview of Medium-term Management Plan “Growing Together 2026”▎Scale of YUASA VISION 360 and Transitioning Our Growth Strategy

For the third stage of YUASA VISION 360, we aim to achieve consolidated net sales of ¥600 billion and consolidated ordinary profit of ¥20 billion.

Growing Together 2020

Growing Together 2023

Growing Together 2026

FY2019 Results

FY2022 Results

FY2025 Plan

Growth strategy
Approx. 20%¥98.0 billion

Ordinary profit

Ordinary profit¥12.8 billion¥286.0 billion¥127.4 billion
Net sales¥523.8 billion[¥504.8 billion]

Net sales¥491.3 billion¥15.3 billion

Overview of Growth Strategy

Growth strategy
Approx. 48%

Growth strategy
Approx. 25%

CorebusinessesNewbusinesses

Overseas

Core
Businesses

Net sales¥600 billion[¥576.0 billion]¥20 billion

Item

FY2022 Results

FY2025 Plan

Operating profit

14.5

19.0

504.8

Net sales*1

Ordinary profit

Ordinary profit to net sales ratio
Adjusted net income before tax

15.3

3.0%
10.0

Return on equity (ROE)

10.8%

Dividend on equity (DOE)

3.4%

Total payout ratio*

2

67.0%

*1 Net sales after revenue recognition.
*2 Total payout ratio results for FY2022 include ¥3.7 billion used for purchase of treasury shares.

576.0
20.0

3.4%
13.2

11.8%

At least 33%

At least 3.5%

▎Non-financial KPIs*3
Item

CO2 emissions (Scope 1&2)

Percentage of female managers

Percentage of female employees in comprehensive
work position

New businesses

FY2022 Results

Long-term Care
& Medical

Food Equipment

Agriculture Process* Net sales figures in brackets are after revenue recognition.

FY2025 Plan

6.0%

62.8％

Digital talent cultivation(successful candidates from our original program)

New
Businesses

4.2％

1.9％

Percentage of taking paid leave
Average hours of labor

New Distribution

6,682t-CO2

10.3％

Managerial talent cultivation(number of training program participants: total)

Resilience &Security

30% reduction(compared with FY2022)

Percentage of employed females in comprehensive
work position

Percentage of male employee taking childcare leaveand leave for the purpose of childcare

Digital

Sharing

Ordinary profitCorebusinesses▎Financial KPIs

Green

78.1%

1,955 hours
84 persons
-

3.0％

12.0%

90.0%

70.0％

1,920 hours

370 persons

IT talent*4: 600 persons
DX talent*5: 40 persons*3 Of the non-financial KPIs, all indicators except CO2 emissions are for YUASA TRADING (non-consolidated).
*4 Personnel who can utilize IT tools and digital technologies in their own work and carry out digital measures.
*5 Personnel who utilize the results of data analysis and formulate and promote new plans based on specialized knowledge of marketing andmanagement strategies.

15

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Business Transformation

Overview of Business Transformation

The Group will expand existing business and implement growth strategies domestically and internationally by transforming business models and developing existing business
partner networks.
▎Conceptual Image of Business Transformation

Achieve Growing Together 2026

Enhance corporate value

Consolidated net sales for the fiscal year ending March 31, 2026

¥600 billion (of which is overseas business: ¥65 billion)

Interactive platform

Development ofbusiness partner
network

Profitability

Business modeltransformation

Promote solutions to new social issues throughinteractive information sharing

Solve social issues together
with our business partners

Corporate Culture Reform
Corporate Philosophy

TSUNAGU
innovation

DX Promotion

Cross-industry platform

Realize TSUNAGU innovation through cross-industry
collaborations to leverage total coordination skills

Promote growthstrategies

GrowthDevelop the Group's strengths
in growing markets

Sustainability Promotion

Honesty and Trust, Enterprise and Innovation, and Regard for the Individual

P.18

Extend in Japan and overseas

Extend business partner
networks

P.18

P.16

Business model transformation

P.21

Foundation of transformation

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YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Business Transformation

Business Model Transformation: Shift to More Profitable Business Model
We are creating a high valued-added business model that accurately grasps market needs with a market out approach and also connects information, data, and technologies in addition to the conventional
aspects of people, goods, and money. We aim to improve profitability by positioning this market out business model as TSUNAGU innovation and promoting it throughout the Group.

■TSUNAGU Innovation Business Model

Manufacturing

TopicsHome building

Social issues

PeopleEnvironment building

Town building

Solutions

Information

Goods

Technology

By connecting (TSUNAGU) various things such as people, goods, money, information, data, and technology, solve social issues andexpand both “single item business” and “integrated product-service” businesses●E stablish a business model with a market out approach●M aximize synergies among divisions and Group companies to create new value●T ake on the challenge of subscription and sharing services●

The KIZUKI MIRAI Bollard with flood sensor can bedelivered quickly to locations with frequent flood
damageThe KIZUKI MIRAI Bollard at Izu-Kogen
in Ito City, Shizuoka Prefecture(installed August 2022)

Data

Money

Examples of TSUNAGU solutions

The KIZUKI MIRAI Bollard serves as a countermeasureagainst flood damage from typhoons and torrential rains.
Installed beside roads and other familiar places in low-lying
areas, these bollards can quickly detect flooding.
This product was developed in cooperation withexterior manufacturer Sunpole Co., Ltd. (Hiroshima
Prefecture) and OYO Corporation, a geological survey
company headquartered in Tokyo. As Japan experiences
frequent natural disasters, flood damage is a pressing issue
that requires countermeasures. However, the high numberof rivers throughout the country makes developing amonitoring system a burden in terms of time and costs.
To solve this issue, it is possible to build a wide-areaand precise flood monitoring network by installing flood
sensors on bollards, which are already well established aspart of the infrastructure in Japan.

17

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Business Transformation

Business Transformation: Develop into a Growth Strategy▎Promoting Growth Strategy

This growth strategy consists of projects to expand core businesses and developing new
businesses for growth in new markets, aiming to achieve sales of ¥286 billion, or approximately
48% of total sales, by FY2025.
We will promote our growth strategy by deploying the strengths we have cultivated in our corebusinesses and aggressively investing.

■Positioning of
Growth Strategy andCore Businesses■Sales Targets by Growth Strategy for FY 2025

Overseas¥65 billion

Core Businesses

Industrial Equipment& Tools

Housing, Air & Fluidic
Control Systems

Green¥60 billion

Digital¥40 billion

Businesses promoted by whole company

Resilience &Security¥35 billion

Growth Strategy

Drivers for Core
Businesses Expansion

EnergyConsumer Products& Timber

New
Distribution¥25 billion

Long-term
Care & Medical
Sharing¥25 billion¥10 billion

Machine Tools

Construction
Machines

Building Supplies& Exterior

Food
Equipment¥16 billion

Agriculture
Process¥10 billion

Target markets and challenge areas promoted on an area or organizational basis

Projects to expand core businesses: ¥235 billion

Growth strategy total: ¥286 billion for FY2025

New businesses: ¥51 billion

18

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Business Transformation

Business Partner Network Development
Platforms for a market out approach

Business Partner Network

Work to solve social issues with one of theindustry's largest networks of business partners
Integrated Network

Major suppliers

Major sales partners

companies

companies

Approx.

6,000 Approx. 20,000

Grand Fair” promotion event▎“held
at five locations across Japan

Create new business by capturing market needs
and sharing information and knowhow withcustomers
Major
suppliers:
approx. 6,000
companies

31 sites in Japan /23 sites in 10 countries overseas
Group companies: 2
 3 domestic,
12 overseas

Major sales
partners:
approx. 20,000
companies

Integrated network
TSUNAGUproducts

Information

Data

Construction

Carbon neutrality

for utilization of idle facilities development▎Solution
and deployment of the Garage Golf system
Garage Golf combines
the products,
technologies, and ideasof YUASA TRADING
and manufacturers
to address thephenomenon of idle/
unused facilities
through the enjoymentof simulated golf.

Cross-Industry Platforms

New innovation to address social issues in themarket through a network that transcends
industry boundaries
Manufacturing

Industrial
Livingenvironment

Construction

Environmentbuilding

Home building
Town building

Sales partner
network

Supplier network

With a 45-year history,
our “Grand Fair” isthe Group’s largest
promotional event forleveraging our integrated
network. Grand Fairs
are held annually in five regions (Kanto, Kansai, Chubu,
Tohoku, and Kyushu). These events serve not only as avenue to secure sales but also to create new business
opportunities. In 2023 Grand Fairs are scheduled from Julyto September, with an expected 50,000 visitors.

Interactive Platforms

and deployment of gateposts▎Developmentwith V2H device and delivery boxes
P.35

Develop domestic and overseas
business partner network

19

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Interview with Outside Directors
We spoke with the YUASA TRADING Group outside directors about the Growing Together 2026 Medium-term Management Plan.

Investing in business resources cultivated inour core businesses and applying them overseas
as well as TSUNAGU innovation

Measures to increase the value we provide
and expand the markets we supply

Shinzo Maeda

Kyosuke Kimura

Outside Director

I believe this plan is well-anchored in changes to social conditions and the market environment. A
good point about the plan is the aggressive investment of business resources into our core businesses
and leveraging our strengths to expand areas of business growth. Among these growth strategies, theone that most draws my attention is overseas business development, which I believe is very important.
Japan’s future population decline will create a tendency toward shrinking markets. As such,it will be very important to build a strong and stable presence in overseas markets. We will makethe “mini-YUASA” we have established in Thailand succeed as a way of demonstrating the total
coordination skills of the Group. I believe this initiative will determine the success or failure of
our future overseas expansion. The key to overseas success will be the people; those engaged
in management and sales overseas need to understand the YUASA TRADING Group corporate
philosophy and management strategies. I believe the “Grand Fair” exhibition in Japan is a uniquebusiness development method, and I would very much like to see business development inThailand lead to a successful Grand Fair there. If the percentage of overseas sales can exceed 30%,
then employee awareness will change and a culture of thinking about business from a global
perspective will be created. As is true in Japan, global expansion is not possible without diversity.
It is necessary to consider cultures, religions, legal systems and the like when developing ourbusiness overseas.
The promotion of TSUNAGU innovation is also a strategy that demonstrates the strengthof a well-developed business partner network for our core businesses. However, the axis ofassessment for the products and solutions developed by companies has shifted in recent years.
Simply contributing to the sales and profits of certain customers is not enough; customers
have started to select products and solutions in line from various perspectives such as productbackground and processes, degree of social contribution and consideration for the environment.
Through the TSUNAGU innovation, I hope the Group continues providing value to society, whichmakes us the reason to be chosen by people.

Outside Director

Taking into account the current and future business environment, it can be assessed that themeasures taken by the YUASA TRADING Group to improve its corporate value are comprehensive.
Of these various measures, the most commendable is that the Group is increasing the value it
provides and expanding the markets it supplies.
I believe that many stakeholders were under the impression that we are an industrial
machinery trading company focused on the domestic market. As such, it would be difficult for
stakeholders to fully assess the existing value and growth potential of the Group. No matter how
stable the operating cash flow is, the image of business development in a limited market would
seem somewhat unattractive.
Today, we are gradually breaking away from such pre-conception. I feel that our stakeholders havecome to recognize the value that results from the connecting (TSUNAGU) that leverages the Group’s
network-building over more than 350 years of doing business. The Medium-term Management Plan
calls for a business transformation from a product out to a market out approach, and the promotion of
TSUNAGU innovation and growth strategies; I believe this approach will increase the value provided by
the YUASA TRADING Group and expand markets that demand such value.
This promotion of TSUNAGU innovation is a continuation from the previous Medium-termManagement Plan, and I hope to see it further accelerated. It doesn’t matter how niche an innovation
is—if stakeholders recognize that we are deeply involved in such matters, and if they understand thevalue we provide and the breadth of the market, then I believe that profitability will follow.
Also, it is human resources that drive these changes. I believe that if YUASA TRADING Group
employees hone their sense of integrated product-services and effectively utilize the intellectual
property that has been created, it will lead to an increase in corporate value. In promoting
overseas strategies, it will be necessary to instill the corporate philosophy and Medium-termManagement Plan among locally hired human resources. I hope the Group will continue to place
importance on investing in human resources.

20

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Interview with Outside Directors
Having welcomed two new outside directors, we spoke with them about the Group’s Medium-term Management Plan, Growing Together 2026.

Strengthening human resources development
and environment building that leverages ourbusiness partner network

Sustainability and competitiveness throughenhanced risk management

Yoshiro Hirai

Miki Mitsunari

Outside Director

Newly appointed

It is my great pleasure to join the Board of Directors.
For more than 350 years, the YUASA TRADING Group has been in tune with changes in
the world, but in recent years the pace of change has rapidly accelerated. While it is of course
important to preserve good and necessary traditions, I believe it is also essential to be able torespond quickly and flexibly to drastic changes. I hope to contribute to a strong foundation thatcan support pioneering for a new future and an environment in which employees can work withvigor and vitality.
In terms of the Medium-term Management Plan and recognizing the issues to be addressed
to improve corporate value, I believe that the YUASA TRADING Group’s focus on a business
transformation from a product out to a market out approach is appropriate in light of the times
and changes in the market. I believe the Group’s greatest asset and strength is its network ofbusiness partners. How we choose to leverage this extensive network will be vital, but it is noneother than employees who can make this a success. To this end, the question then becomes how
actively employees can approach their own work—it is important to not just passively do one’s
work but to also take an interest in it.
Creating new value by associating various events is much more difficult than one might
imagine. Making connections among unlimited possibilities and solving the issues of business
partners and the market will require an even greater ability to imagine and implement than
before. The key here is to develop human resources and build an environment that allows themto flourish. To do all of this, it is therefore vital to reform the corporate culture, including thefostering of human resources.
YUASA values include having a “Challenging Spirit,” and I believe it is important for
management-level and higher employees to first change their own behaviors. If upper levels set a
good example of a challenging spirit in action, that attitude will spread throughout the company.

Outside Director

Newly appointed

I am very pleased and humbled to be appointed to the Board of Directors.
I have been associated with the YUASA TRADING Group since its Sustainability Declaration
announcement in October 2021, and I find it to be a very dynamic organization. With a diverse
range of business partners, products, and services, there are many areas with growth potential.
I believe that in order to create new innovation, it is important to have a vibrant and enjoyable
workplace. In the future, I will fully support the moves toward being a company that is not only
carbon neutral but also one where employees find it a joy to work, where business partners are
happy, and where innovation happens.
In terms of the Medium-term Management Plan, I think that an overall good balance has beenachieved with the strategy of further expanding existing business and working in new fields thatare less susceptible to economic circumstances. Without solid profits generated from existing
businesses, we cannot invest in new solutions. Moreover, enhancing profitability with TSUNAGU
innovation requires abilities and knowledge to coordinate both sides of the TSUNAGU equation.
For this reason, I can greatly appreciate the measures everyone is taking to improve the internal
environment so employees can demonstrate their total coordination skills. In the future, I hope to
see the employees working on these efforts set goals and have a sense of accomplishment when
they achieve those goals, and I look forward to a corporate culture in which employees can feeleven more fulfilled in their work.
From the perspective of sustainability promotion, it has become very important to further
enhance risk management infrastructure to ensure transaction security. In particular, there is aneed to increase transparency throughout the value chain. Since the Group will handle a greatamount of data, I would like to see the YUASA TRADING Group improve its competitiveness byproperly and appropriately disclosing business transaction information through means such as
digital transformation (DX).

21

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Message from the Supervisory Manager of Management Administration
Aiming for Sustainable GrowthBased onOur Corporate Philosophy▎

 trengthening Our Management Foundations
S
for Sustainable Growth

I believe that the role of management administration is to build
systems and foundations for maximizing corporate value. For
sustainable business development, it is essential to strengthen the
management foundations for human resources, infrastructure,compliance, and governance. Each one of the three-year mediumterm management plans under the 2017 YUASA VISION 360 has
set strengthening our management foundations as a priority
matter. The environment in which our company operates ischanging greatly against a backdrop of technology development
and increasing social uncertainty. I believe that adapting to thesechanges will support sustainable development.
The current and third Medium-term Management Plan,
Growing Together 2026, represents the harvesting stage, andwe will strengthen our initiatives for corporate culture reform,
DX promotion, and promotion of sustainability to serve as thefoundations for accelerating our business transformation.

hree Measures to Support Our Business▎TTransformation

We set our first and foremost pillar as corporate reform. In terms ofstrengthened corporate governance, we added another outside
director to the board from FY2023.

■Three Measures to Support Our Business Transformation (Overview)
Business transformation

Haruo Sanoki

Representative Director, Senior Managing Director
Supervisory Manager of Management Administration

DX promotion

Corporate
culture reform

Sustainability
promotion

With the aim of enhancing the Group’s quality ofmanagement, we continue to strengthen governance,compliance, and risk management. In terms of personnel
reforms and environment building, we are promoting projects
that involve the participation of all employees, which is driven
by the keywords of “Total Coordination Skills,” “Challenging
Spirit,” and “Communication” in order to foster a corporate
culture in which TSUNAGU innovation has become the norm.
For the second pillar, DX promotion, we aim to establish acompetitive advantage by not only introducing systems but by
also using those systems to transform our business and enhance
our operations. In moving toward data-driven management,
we will focus on developing DX talent cultivation across thecompany, including management, and strive to transform
ourselves into a data-based specialized trading company.
The third pillar is the promotion of sustainability in linewith our 2021 Sustainability Declaration, with a focus on
harmony with the global environment, business activities forservice with good products, and management that respects
humanity. As the first step toward carbon neutrality for theGroup, we aim to reduce CO2 emissions by 30% by March 2026
(compared with FY2022). Leveraging our Group’s efforts andknowledge, we will also accelerate our social problem-solving
businesses, including promoting carbon neutrality for ourbusiness partners.

Corporate Culture Reform

We will foster a corporate culture that has normalized TSUNAGU
innovation through the means of personnel reforms, environmentbuilding, and strengthened governance.

P.44

DX Promotion

To promote business transformation, we will build a data utilization
infrastructure, develop DX talent, reform business processes, andcreate innovation.

P.40

Sustainability Promotion

We aim to make the Group as a whole carbon-neutral, and accelerate
the carbon neutrality promotion business.

P.23

22

YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Message from the Supervisory Manager of Management Administration▎Maximize Corporate Value

To embody one of our core corporate philosophies, Enterpriseand Innovation, the YUASA TRADING Group undertakes
industry-leading initiatives—for example, our goal of making
the Group as whole carbon neutral by FY2030 is 20 years earlier
than what the Japanese government is calling for.
From the perspective of sustainability and human capitalmanagement, we have increased the number of non-financial
KPI items in the current Medium-term Management Plan.
We believe that achieving these KPIs will be the result ofstrengthened management foundations.
By promoting both financial and non-financial KPIs,
we aim to maximize the corporate value of the Group byenhancing both economic value (financial value) and socialand environmental value (non-financial value), aiming tomaximize the corporate value of our Group.

▎Strategies


Investment Policy for Strengthening Growth▎Total Payout Ratio to Shareholders

In terms of our cash flow allocation policy, we are investing¥21.2 billion, or slightly over half of our total operating cash
flow for the past three years, into growth areas and DX.
Additionally, in our growth strategy investment, we haveestablished an investment framework for integrating our bases inThailand to enhance overseas business and creating TSUNAGU
innovations, allocating investments to each of the following areas:businesses promoted company-wide (Overseas, Green, Digital),businesses promoted according to area and organization (Resilience& Security, New Distribution, Sharing, Long-term Care & Medical,
Food Equipment, Agriculture Processes), and core businesses.
DX IT digital investment has been allocated ¥11.2 billion
for the purpose of developing the necessary infrastructure andcultivating and strengthening talent to transform the company
into a data-based specialized trading company.

■Trends in Dividend Per Share and Payout Ratio■Investment Policy for Growing Together 2026
Investment

Overseas Business

Growth Strategy Investment

Green Business(Eco & Energy Solution)
Digital Business(Robot [AI] & IoT)

Plan

¥6.0 bn

Food Equipment
Business

DX andIT digital investments

Total● Thailand reinforcement investments
・TSUNAGU innovation development¥4.0 bn● Function strengthening
investments

・Human resource development
・Strengthened sales promotion
・Development of logistics
infrastructure

Agriculture Process
BusinessCore businesses● M&A investment● Product and service development
investments

New Distribution
Business

Long-term Care &Medical Business

Details

Interim dividend

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Growing Together 2026

As to our shareholder payout policy, we have set a new
KPI for a dividend on equity (DOE) of 3.5% or higher, while
maintaining a shareholder payout ratio of 33% or higher basedon stable dividend payments, as in the past.
We will continue to strive to enhance corporate value
through proactive IR activities, appropriate information
disclosure, and the provision of stable shareholder returns.

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YUASA INTEGRATED REPORT 2023

Strategies to Maximize Value Creation

Promoting Sustainability Management

We will actively contribute to the establishment of a sustainable society through our business activities.
▎Governance

The YUASA TRADING Group has established the Sustainability
Promotion Committee in order to promote management that
contributes to sustainability. The committee deliberates on theoverall risks, opportunities, and impacts of sustainability, including
climate change, periodically reviews the policy for countermeasures
to reduce risks, and advises the Board of Directors. The Board of
Directors discusses these issues as important matters related tobusiness strategy and sustainability and determines policy.
■︎Sustainability Management Promotion System
Board of Directors

Sustainability Promotion Committee(Chair: Representative Director)

Administrative bureau

Support promotion
Each businesssite▎Strategy

Governance Advisory Committee

P.53▎Risk Management

With regard to overall risk management for sustainability,
including climate change, the Risk Management Supervisory
Manager, each of the committees (Ethics and Compliance
Committee, Internal Control Committee, Environmental and
Resilience Committee, etc.), and the Sustainability Promotion
Committee collaborate to identify, assess, and manage risks.
We also manage risks across the Group based on relevantinternal rules and notices, including the identification ofvarious risks in the Group’s business activities, collectionof information, planning of preventive measures, and theprovision of training.
■Sustainability Declaration and Materiality
Sustainability
Declaration

Sustainability Promotion Office(inside Corporate Planning Department)
Collaborate

Management
Administration

Group companies
in Japan

Unit responsible for sustainability promotion

Respond to climate change(realize a resilient society)

Group companies
overseas

Based on our corporate philosophy of “Honesty and Trust,”“Enterprise and Innovation” and “Regard for the Individual,” wepublished our Sustainability Declaration in October 2021 to further
evolve the management foundation which has been passed down
for over 350 years. We will continue to actively contribute to thefurther development of prosperous, humanitarian societies andcreation of sustainable societies through our corporate activities
by valuing mutually beneficial, symbiotic relationships in all
countries and regions of the world, with a focus on maintaining
harmony with the global environment.

Harmony with the Global
Environment

Materiality

Contribute to decarbonization ofsociety through energy creationand saving know-how

Support cyclical society(rental and sharing)

Lower environmental impact
through company activities■Main Initiatives in Growing Together 2026

We will reduce CO2 emissions 30% by March 2026 (compared with FY2022)●

6,682 t-CO2
CO2 emissions
FY2022*Target for Scope 1 and 2 emissions of the Group

30% reduction

Carbon neutrality

FY2025

FY2030CO2 emissions

Initiatives to reduce Scope 3 CO2 emissions●Promotion of businesses that solve social issues(e.g., carbon-neutral promotion business, Resilience & Security business)●●

Inform stakeholders of our transaction policy and human rights policy
Promotion of corporate culture reform projects (YUASA PRIDE project,
office environment building)●Business Activities for Service with
Good Products

Realize a safe and secure society
through service with good
products
Support sustainable
manufacturing, home building,environment building, and town
building
Create co-creation value –“TSUNAGU”

Management that Respects Humanity
Promote health management
and comfortable working
environments for the 400th
anniversary of the founding of
the company

Promote diversity(women, foreign nationals,
experienced mid-career hires)

Promote Digital Business
Strengthen relationship withbusiness partners(strengthen DX and logistics promotion
in and outside the company)

Enhance education and training(strengthen human resource
capabilities)