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1 Vision(Long-Term Vision)

Vision 2035 (Long-Term Vision) ｜ Top Message

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Top Message
Toward the next 100 years
enhancing corporate value through businessstructure reforms,
we aim to become an Energy Management Company
Policy on Sustainability Management

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

Osamu Murao
President andRepresentative Director,
GS Yuasa Corporation

The global trend toward carbon neutrality is accelerating, atrend we recognize as representing a major tailwind for theCompany. 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 withthe 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 thisenvironment, it is important that we innovate further inthose technologies we have developed to date for storing
and using electricity, and that we widely implement andoperate those technologies as part of public infrastructure.
Thus, in April 2023 we reviewed our previous“Management Vision and Management Policy” andformulated a new “Policy on Sustainability Management.”
In it, we clearly set out our management stance ofcontributing to achieving a sustainable society throughenergy technologies. We also intend to contribute to solving
sustainability issues, while aiming to enhance corporate
value through sustainable growth for ourselves. We areconfident that the growth of the Group’s employees andothers involved with our business under this policy cancontribute to people, society, and the global environment.
This Policy on Sustainability Management also serves tosupplement our corporate philosophy of “Innovation and
Growth.” The word “Innovation” typically tends to be
associated with groundbreaking new technologies or theinvention of new products, but innovation is more thanthat. Innovation is also an effort to integrate, combine, andunify existing technologies and mechanisms to evolve theminto something better. Further, this is not limited to the fieldof technology development; innovation also includes
Improvement Activities carried out across a variety ofdivisions, 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 themthat I want them to work toward our goal of contributing to
the realization of a sustainable society, and to remember tobe 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 ofachieving “Innovation and Growth” for the next 100 years,
based on the DNA of our founders and the knowledge wehave 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 tocome. Our goal will be to contribute to solving social issues
in the fields of mobility and public infrastructure, as wework toward the realization of a sustainable society and thecreation of comfortable living environments for all. Bysteadily expanding our business, we aim to see 800.0 billion
yen in net sales in fiscal 2035.
Vision 2035 encompasses “Four Re’s,” key words aimed
at achieving this vision.

The Four Re’s

RebornReliable

Carry on the founding spirit of
GS Yuasa, a century-old
company, while being reborn inanticipation of the next 100
years

Continue to be trusted by all
stakeholders by remaining
committed to technicalinnovation and delivering solid,
reliable energy

Renewable

Respect

Make a genuine contribution tocarbon neutrality in the fields
of mobility and public
infrastructure

Grow to become a respectedcompany by honoring efforts toachieve the SDGs andcontribute to society➡ P.7 Vision 2035

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Backcasting to define a path torealizing our ideal vision
In formulating Vision 2035, we began by first predictingsome of the long-term environmental changes in our areasof business. Global demand for storage batteries, ourmainstay product, is expected to grow by more than 40
times, from 230 GWh in 2019 to about 10,000 GWh in 2050.
In the mobility field, electrification aimed at achieving
zero emissions is expected to accelerate, whileadvancements 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, theimportance of storage batteries, which are necessary foradjusting supply and demand in power grids and businesssites, 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 andtrusting relationships with partners as
strengths
During our project to formulate Vision 2035, we had
members at the section manager level, who are expected tobe active on the front lines by sometime around 2035, toparticipate, starting with initial discussions of our vision andpreparation of a draft. Later, our management team,including myself and our outside directors, examined thedraft closely, discussing the future of the Company while

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Vision 2035 (Long-Term Vision) ｜ Top Message

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working out a final version of Vision 2035.
One of the most memorable parts of these talks waswhen we discussed the opinion that, given the financial andcompetitive environment, a large-scale investment in thelithium-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 comeswith some risk. That said, I personally felt that lithium-ion
batteries for BEVs were a piece absolutely essential to ourcompany’s growth. To compete in the BEV lithium-ion
battery market, we cannot do business on our own—
partnerships with companies that have extensive experienceand 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 ourfounding, we must be thoroughly committed totechnology. We have concluded that by doing so, partners
will choose to work with us, and the Company cancontinue its sustainable growth with them.

Working toward sustainablecorporate growth with lithium-ion
batteries for BEVs and energy
storage systems (ESS)As our first foray into the mobility field centered onlithium-ion batteries for BEVs, in July 2023 we established ajoint venture company with Honda Motor Co., Ltd. called
Honda・GS Yuasa EV Battery R&D Co., Ltd. The newcompany 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 asupply 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 isscheduled 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 toexpand production capacity for the Group as a whole toover 20 GWh/year.
The success or failure of the development of lithium-ion
batteries for BEVs is very important, as it will have asignificant 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 stableproduction 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

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Key points of “Innovation and Growth” for achieving Vision 2035

Mobility Field

Public Infrastructure Field

New initiatives● Leverage achievements of joint● Respond to firm demand for

venture company with Honda toprovide society with high-capacity,
high-output lithium-ion batteries
for BEVs and achieve growthindustrial batteries and power
supplies, primarily backup batteries
and power supplies, to ensure highprofitability

Use accumulated, diverse technology
and expertise as seeds to create new
businesses that contribute to society● Solidly capture demand forlithium-ion batteries for HEVs andensure high profitability● Leverage expertise in lithium-ion● Secure funds for growth throughoptimization of regional strategies
for lead-acid batteries

batteries for BEVs to strengthen
competitiveness in lithium-ion
batteries for ESS of renewableenergy➡ P.11 Business structure reforms and business growth through 2035

such an outstanding partner. Behind our realization of thispartnership is the track record of and relationship of trustwith 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 areaiming 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 thesafety 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 incontributing to society.

Create investment resources for
growth in the lead-acid battery
business
Meanwhile, we recognize that the market for lead-acidbatteries 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 soonin proportion to the shift to electrification. We also expectthat this electrification will not progress uniformly throughthe world, as market conditions vary from country tocountry. We will ensure that we capture demand bymonitoring the situation in each country on the axes of bothtime and region. We believe that industrial lead-acid batteries
and power supply units will continue to grow in importancefor backup applications, and we recognize that we have asignificant role to play in that market. Profits earned after
reaping cash from these markets will be used as a source ofinvestment in new areas. If, on top of that, a certain level ofbusiness 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 andother next-generation batteries. Among these, our researchand 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 andexpertise as the seeds of new business creation. We havealready launched our “Biz Challenge” project, recruiting
ideas in-house for new business creation, and more than adozen business ideas have already been selected as of theend of first-round submissions. We are beginning shapepotential businesses from among those diverse submissions,
including ideas for derivative business areas utilizing thecustomer bases, business infrastructure, and technologies ofour 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 ouremployees have shown they inherit our founding spirit ofchallenge. I am reminded that this is a valuable asset for theCompany’s future, and that it can lead to strengthening ourhuman capital going forward.

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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, andnet 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 theconversion of our site in Turkey into a consolidated
subsidiary both led to strong results.
In the industrial battery and power supply business, wehave taken over the social infrastructure business of Sanken
Electric Co., Ltd. and are exploiting synergies across multiple
divisions, including procurement, development andmanufacturing, and sales and service. Another major
accomplishment was the order for and delivery of theworld’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 liketo 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 forgenerating 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 inbusiness 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 Thirdand Fourth Mid-Term Management Plans, we advanced ourgoals for the Fifth Mid-Term Management Plan with thestrong determination that the entire Group would work
together to achieve them. The fact that we were able to dowhat 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 PlanThree years aimed at laying thefoundation for even greater growth
Our Sixth Mid-Term Management Plan began in fiscal 2023.
We have positioned these next three years as a time forlaying the foundation for the Group to make even greater
leaps forward as we work toward achieving our Vision 2035.
To that end, we will implement three measures.
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Vision 2035 (Long-Term Vision) ｜ Top Message

GS YUASA Report 2023

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 thestart 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 sustainablegrowth that we focus on expanding earnings in our existing
businesses as well as reinvesting profits generated by thosebusinesses in growth areas. We will improve capital efficiency
by establishing optimal production systems, including
consolidation of production systems both in Japan andoverseas, to secure the profits that are the main source ofinvestment 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) andstrengthening of new businesses. In DX, we are alreadypromoting 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.

S: Social

ESG

G: Governance

ESG initiatives are essential as we work to achieve Vision
2035. I realize this will require firm commitment on the partof 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 havebeen engaged in efforts aimed at the transition to a
decarbonized society, including switching 100% of theelectricity 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 tomoving steadily forward with three key measures to achievecarbon 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 avery significant role to play as society as a whole works
toward achieving carbon neutrality. We will continue toexpand sales of environmentally considered products to
reduce CO2 emissions and contribute to the global
environment and society.

We place great importance on the human capital that is thefoundation of any company. For us to continue to growsustainably and provide new value to society, it is essentialthat 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 tostrengthen 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, andinclusion (DE&I) initiatives, further developing systems andprograms that support the personal growth of humanresource with diverse personalities and capabilities. These will
enable them to play an active role in accordance with theirindividual life stages, characteristics, and willingness to takeon challenges. Note that we have established an employee
engagement KPI to assess these efforts, a way of linking theenthusiasm of our employees to the growth potential of theCompany. 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 arepromoting throughout the Company. We are currently
advancing an in-house DX human resource development
plan, and in fiscal 2022, we implemented a Company-widee-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 todevelop more advanced DX human resources.

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 sometime. 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 humanresources, and the heads of our business divisions to createa framework for developing successors, with a view to three
years out, for executive officers, business unit managers, theheads of overseas sites, and others.

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present our growth story to our stakeholders in terms of
return on capital and growth potential. This time, we haveannounced 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 orlater. In the course of this process, we will place anemphasis on dialogues with our stakeholders, listen
respectfully to your opinions, and work to deepen yourunderstanding of the decisions we make.
With our announcement of Vision 2035, I think we haveclearly presented to our stakeholders the direction and path
we should proceed along going forward, including what wevalue, what we will change, and where we are headed forthe future. Many of our stakeholders consider us to be astability-oriented company. This time, however, we havedecided to make a major switch in our business base by
focusing on growth areas, shifting direction towardlithium-ion batteries for BEVs while also applying them tolithium-ion batteries for ESS. I cannot envision oursustainable 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 acompany capable of controlling and managing energy as awhole. Our goal is to move from our existing stance as anenergy and device company to become an Energy
Management Company. I hope you will continue to lookforward to the future of the Group, and support us in ourefforts.
August 2023

To Our Stakeholders

Further deepening dialogue as wework to achieve sustained growthPresident andRepresentative Director,
GS Yuasa Corporation

Our PBR currently remains low at around 1x. I believe this isdue in part to the fact that we have not been able to
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