Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Overall
Sales	247,224	283,421	(12.8)	-Sales decreased because of the following factors: -Demand for car batteries for new vehicles sharply declined. -Sales prices both in Japan and abroad dropped, reflecting lower prices of lead. -The yen remained stronger against other currencies.
Operating income	11,521	14,276	(19.3)	- Mainly the Chinese and Southeast Asian markets remained strong throughout the year. In Japan, orders for car batteries, industrial batteries, and power-supply equipment started to increase in and after the third quarter. But the increase was not enough to offset the slowdown in demand in the first quarter.
Ordinary income	10,171	10,979	(7.4)	-
Current net income	6,487	4,228	53.4	-
Battery and power supply
Sales	221,191	259,839	(14.9)	- See below.
Operating income	15,548	16,538	(6.0)

 

Performance of battery and power supply equipment business

-Car battery business in Japan: Sales were sluggish in general because of the significant decline in demand for new cars, especially in the first and second quarters, although demand slightly recovered in the third and fourth quarters. Sales of other automotive equipment also decreased, reflecting lower demand.

-Car battery business outside Japan: Sales volumes increased year-on-year mainly in China and Southeast Asian countries, but sales prices decreased because of lower lead prices and negative currency translation. This resulted in lower earnings for the year.

 

New supply agreement

- GS Yuasa Power Supply Ltd. announced that its "Q-55", lead storage battery with idling stop mechanism, has been selected for the European version of Toyota Auris. (From a press release on May 7, 2009)

Lithium-ion battery business

-Blue Energy Co., Ltd. (Minami Ward, Kyoto City), a joint-venture company between Honda Motor Co., Ltd. and the GS Yuasa Group to develop, manufacture, and sell high-performance lithium-ion batteries for hybrid vehicles, held on April 21 a groundbreaking ceremony to mark the start of construction of its new plant in Osadano, Fukuchiyama City, Kyoto. Construction is scheduled to be completed by the end of this year with a plan to start commercial operations around the fall of 2010. Blue Energy is held 51 percent by GS Yuasa Power Supply Ltd. and 49 percent by Honda. Its initial project will be engineering and mass producing high-performance and low-cost batteries based on the EH6 lithium-ion batteries now being developed by GS Yuasa. The joint-venture company intends to develop such batteries by making improvements in the structural design and changing the materials used in the electrodes. The new plant will have a capacity to produce 200-megawatt per hour or 200,000 to 300,000 sets of hybrid vehicle batteries. Total amount of investment in the plant is projected to reach around 25 billion yen. (From an article in the Nikkan Jidosha Shimbun on April 22, 2009)

-The Company will issue new shares in order raise up to 36.7 billion yen for strengthening its lithium-ion battery business. Funds procured through the project will be allocated to the company's three subsidiaries making such batteries. The resources will be used to build new plants for boosting capacity as well as to conduct R&D projects aimed at pushing down battery costs. The three subsidiaries are GS Yuasa Power Supply Ltd., which is wholly owned by the Company; Lithium Energy Japan, a joint venture among the Company, Mitsubishi Corporation, and Mitsubishi Motors Corporation; and Blue Energy Co., Ltd., a joint-venture company between the Company and Honda Motor Co., Ltd. (From an article in the Nikkan Jidosha Shimbun on July 13, 2009)

-The Company has begun to negotiate with the municipality of Ritto on acquisition of land for building a lithium-ion battery plant in the city in Shiga Prefecture. It aims to start construction in October 2010. The project is based on Yuasa's strategy to reinforce its battery business. Although the application and production scale of the battery are not immediately available, the new plant will be the group's fourth facility for producing lithium-ion batteries. The plant is scheduled to go into operation around the spring of 2012. (From an article in the Nikkan Jidosha Shimbun on Nov. 18, 2009)

-GS Yuasa Power Supply Ltd., based in Minami-ku, Kyoto, said GS Yuasa Lithium Power, Inc., its wholly-owned U.S. subsidiary in Atlanta, Georgia, put into operation an assembly plant of large-size lithium-ion batteries, which is the group's first overseas assembly and sales base in the battery business. The North American operation will be expanded from the conventional space and defense sector to aeronautic, industrial and railway areas. Yuasa aims to achieve sales of 500 million yen in fiscal 2010, and 1 billion in fiscal 2013. (From an article in the Nikkan Jidosha Shimbun on Feb. 13, 2010)

 

Business Structure Reorganized

-The Company will realign the Group's business structure. The Company will integrate and transfer the Company's administration and R&D functions as well as operations of its wholly owned subsidiaries to GS Yuasa Power Supply Ltd., one of its consolidated subsidiaries. At the same time, it will add the lithium-ion battery business to the same subsidiary, which will thereafter conduct its business in five operating segments, namely the Automotive Battery Division; the International Division; the Power Supply Division (industrial batteries, power supply); the Lithium-ion Battery Division; and the Lighting Division, and also change its corporate name to GS Yuasa. The aim of this move is to increase the Group's business efficiency and allocate its management resources in an optimal manner. The Group will focus more on the overseas battery market and other fast growing areas in the global arena. (From an article in the Nikkan Jidosha Shimbun on Feb. 16, 2010)

 

 

Outlook for FY2010

Performance Forecast by Segment

(in hundred million of JPY)

		FY2010 (Forecast)	FY2009 (Actual)	Rate of Change (%)
Automotive Batteries (in Japan)	Sales	600	567	5.8
	Operating income	25	18	38.9
Industrial-use batteries and power equipment (in Japan)	Sales	700	590	18.6
	Operating income	90	69	30.4
Outside Japan	Sales	1,110	1,047	6.0
	Operating income	75	69	8.7
Lighting equipment	Sales	90	70	28.6
	Operating income	5	(10)	-
Others	Sales	300	197	52.3
	Operating income	(25)	(13)	-
Intra-company transaction	Sales	-	-	-
	Operating income	(20)	(17)	-
Total	Sales	2,800	2,472	13.3
	Operating income	150	115	30.4

 

Business Targets by Segment

Segment	Key targets
Automotive Batteries (in Japan)	-Expanding the lead storage battery business in the green car market - Expanding sales of batteries for HEVs and other vehicles equipped with charging capabilities - Enhancing the product lineup of batteries exclusively designed for vehicles with idling stop systems -Strengthening cost advantages and the manufacturing base - Optimizing business resources and the production structure - Streamlining operations by making production lines more efficient, for example
Outside Japan	- Car batteries: maintaining and improving market share in the growing Asian market - Increasing production capacity - Launching new products such as secondary storage batteries designed for high-temperature regions
Others	- Setting up production of lithium-ion batteries - Increasing production capacity of EV batteries - Launching operations at its HEV battery plant (in or after Autumn 2010) - Looking for ways to reduce the costs of lithium ion batteries

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	4,442	5,395	4,768
Battery and Power Sources	3,993	4,860	4,341

 

R&D Organization (battery and power supply equipment business)

-The Company's R&D Center.
- The automotive battery business division's technical development headquarters and industrial battery and power supply business division's power supply system production headquarters development section of GS Yuasa Power Supply Ltd.
- The large lithium-ion technology division of the special/lithium battery headquarters of GS Yuasa Technology Ltd.
- The research group of Ztong Yee Industrial Co., Ltd.
- The development group of Yuasa Battery, Inc.
- The technical development division of Yuasa (Tianjin) Technology, Ltd.

Product development

<Lead batteries>
-The Company developed its ECO.R Series automotive batteries, which are highly functional and eco friendly. One, the NEO, has an optimal design based on a positive electrode grid, offers higher capacity due to a new method used to apply positive-electrode materials, and incorporates technology that improves the recharge-ability of negative electrode plates. The ECO. R Series NEO, which went on sale in October 2009, is expected to help reduce CO2 emissions and make vehicles more fuel efficient.

<Nickel hydride batteries>
-The Company conducted R&D work and product development of on ecological nickel hydride batteries that are as user-friendly as alkaline batteries but reusable and not disposable, like alkaline batteries.
The Company developed its CX Series nickel hydride batteries, applying its proprietary technology relating to poly-phase stacking novel anode material and new conductive cobalt cathode material. The batteries are capable of an ultra-low, self-discharge rate.

<New batteries for automotive applications>
-The Company continued to develop lithium-ion batteries for HEVs while improving its EH series products that feature world-leading performance in terms of output and long life. The Company and Honda are jointly studying actual applications and the Company is preparing for commercial production, building a model production line with a monthly production capacity of 10,000 cells.

<Research on basic technology of lithium-ion batteries>
-The Company conducted research to develop a positive electrode made of lithium iron phosphate, ahead of other battery manufacturers. It is now working on the project, aiming to market the electrodes as soon as possible.
-The Company looked for materials for next-generation positive and negative electrodes and evaluated performance of candidate materials.

<Power supply equipment>
-The Company is developing battery chargers for EVs. The batteries will be released in the second quarter.

Cooperative R&D Project on Batteries

-A cooperative R & D project on batteries by twelve private firms including Toyota Motor Corp. and Hitachi Ltd., Kyoto University and the government has started in Japan. The project will research the yet-to-be defined lithium-ion behavior by using the state of the art analysis facilities to achieve longer life and higher performance of the battery. It also aims to see by FY 2015 a clear vision of development of a high-capacity lithium-ion battery with which a vehicle will run 300 km on a single charge. In increasingly fierce competition on development of a high-capacity secondary battery, the All-Japan development team has been established to forge Japan as a storage battery nation. The project, formally named as "advanced scientific basic research project on innovative storage batteries," has participants of seven universities including Kyoto Univ. and twelve private corporations including Toyota, Nissan, Honda, Mitsubishi Motors, the Company, Panasonic, Hitachi, Shin-Kobe Electric Machinery and Mitsubishi Heavy Industries. In the beginning, about 50 researchers will work on the development task. (From an article in the Nikkan Jidosha Shimbun on June 13, 2009)

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	16,911	10,775	8,937
Battery and Power Sources	3,271	4,942	7,506
- Automotive Batteries (in Japan)	521	-	-
- Industrial-use batteries and power equipment (in Japan)	896	-	-
- Outside Japan	1,854	-	-

 

New Facilities (Selected)

Facilities (Location)	Equipment	Amount (in millions of JPY)	Date of start	Scheduled date of completion	Purpose of the investment
GS Yuasa International Ltd. (Kyoto, Japan)	Facilities for manufacturing storage batteries, etc. for automotive applications	856	April 2009	March or after April, 2011	Reduce costs
	Facilities for manufacturing power supply equipment and lead storage batteries, etc for industrial use	1,009	April 2009	March or after April, 2011	Reduce costs
	Facilities for R&D and production activities; and facilities for renting to affiliated companies	3,689	March 2010	March or after April, 2011	Expand R&D facilities, reduce costs, and add new manufacturing facilities
	Facilities for manufacturing large lithium-ion batteries, etc.	915	Dec. 2009	March or after April, 2011	Increase production capacity
Lithium Energy Japan (Kyoto, Japan)	Facilities for manufacturing large lithium-ion batteries, etc.	6,068	July 2009	March or after April, 2011	Add new manufacturing facilities and increase production capacity
Blue Energy Co., Ltd. (Kyoto, Japan)	Facilities for manufacturing lithium-ion batteries, etc. for automotive applications	4,242	Sept. 2009	March or after April, 2011	Add new manufacturing facilities
Ztong Yee Industrial Co., Ltd. (Yungkang Tainan, Taiwan)	Facilities for manufacturing lead storage batteries	539	Dec. 2009	March or after April, 2011	Increase production capacity
Yuasa Battery, Inc. (Pennsylvania, USA)	Facilities for manufacturing lead storage batteries	372	Dec. 2009	March or after April, 2011	Increase production capacity
Century Yuasa Batteries Pty Ltd. (Queensland, Australia)	Facilities for manufacturing lead storage batteries	617	Dec. 2009	March or after April, 2011	Increase production capacity
Yuasa Battery (Shunde) Co., Ltd. (Guangdong, China)	Facilities for manufacturing lead storage batteries	652	Dec. 2009	March or after April, 2011	Increase production capacity
Tianjin Tong Yee Industrial Co., Ltd. (Tianjin, China)	Facilities for manufacturing lead storage batteries	757	Dec. 2009	March or after April, 2011	Increase production capacity