Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of Change (%)	Factors
Overall
Sales	285,434	272,514	4.7	-Operating revenue increased year-on-year mainly due to sales generated in Asia and Australia, and due to the launch of sales of automotive lithium-ion batteries.
Operating income	16,030	17,589	(8.9)	-Even though operating revenue increased, the Company’s financial results were lower year-on-year due to increased depreciation expenses for investments in the lithium-ion battery operations; a sharp rise in the cost of lead, a major material used in products; and growing expenses at its subsidiaries operating outside Japan.
Ordinary income	17,991	17,513	2.7	-
Current net income	11,733	11,722	0.1	-
Domestic Automotive Battery
Sales	58,784	58,887	(0.2)	-The Company is enjoying strong sales of automotive batteries for new vehicles equipped with the idle-stop function; and sealed batteries for hybrid vehicles.
Operating income	4,266	4,837	(11.8)	-
Lithium-ion Battery
Sales	20,974	11,964	75.3	-Performance improved due to greater production and sales activities.
Operating income	(3,265)	(1,271)	-	-Along with investing in facilities and equipment to increase production capacity, the Company’s depreciation expenses increased.

Contracts

Lead acid storage battery for hybrid auxiliary power unit
-The Company announced on March 12 that its lead acid storage battery for hybrid auxiliary power unit has been chosen for installation on both the "Aqua" HV and the "Prius PHV" produced by Toyota. The "Aqua" will use the S34B20R battery, and the "Prius" use the S34B20R and the S46B24R. During the period from 1997 through the end of December 2011, GS Yuasa delivered more than 2.7 million auxiliary power batteries to its customers. (From an article in the Nikkan Jidosha Shimbun on March 13, 2012)

Lead-acid automotive battery for Idle-stop vehicles
-Lead-acid automotive batteries for vehicles equipped with the idle-stop function are being mounted on the following vehicle types. Compared with conventional lead-acid starter batteries, these new batteries provide higher output, higher input, and greater durability. Going forward, the Company plans to develop these batteries at its plants outside Japan, working in response to greater market penetration worldwide of vehicles equipped with the idle-stop function.

• Daihatsu "Move"
• Daihatsu "Tanto"
• Suzuki "MR Wagon"
• Suzuki "Wagon R"
• Suzuki "Wagon R Stingray"
• Suzuki "Alto Eco"
• Honda "N BOX"
• Toyota "Vitz"

Lithium-ion battery
-The Company announced that its subsidiary Lithium Energy Japan (LEJ) will supply lithium-ion battery LEV50 for the Mitsubishi Motors "i-MiEV" G model (16 kWh battery capacity). Mitsubishi Motors has also selected LEJ's batteries to power the long-range version (16 kWh battery capacity) of its "MINICAB-MiEV" light commercial vehicle slated to go on sale in winter 2011. Since LEJ's lithium-ion battery was first adopted for Mitsubishi Motors' "i-MiEV" in June 2009, it has also been chosen for PSA Peugeot Citroen's "iOn", "C-Zero", "Partner" and "Berlingo". (From a press release on July 6, 2011)

Recent Development in Japan

-Lithium Energy Japan (LEJ), a joint venture company invested by Mitsubishi Motors, Mitsubishi Corporation and GS Yuasa for development, manufacture and sales of large lithium-ion batteries, opened its new Ritto Plant in Shiga Prefecture to its stakeholders on February 16. It will go into operation next month for production of batteries, mainly lithium-ion batteries, which are capable of developing about 8 million megawatt for installation on electric vehicles. The volumes of batteries will meet the needs of 50,000 cars of the Mitsubishi "i-MiEV." An addition of the new plant will raise total production capacity combined with existing plants to about 1,090 megawatt, which will serve about 67,800 "i-MiEVs". (From an article in the Nikkan Jidosha Shimbun on February 17, 2012)

-The Company announced on November 21 that it has released its PV-EV system, a photovoltaic quick EV charging system, which also functions as an emergency power source. The environmentally friendly technology that stores solar power in rechargeable batteries can serve as an emergency generator in case of power outage at the time of disasters. The Company aims to sell 100 PV-EV systems a year, looking to generate 1.2 billion yen from sales of the new chargers in 2012. (From an article in the Nikkan Jidosha Shimbun on November 22, 2011)

Recent Development Outside Japan
<Thailand>
-The Company said on February 23 that it will restructure its operation of battery production in Thailand and make investments to substantially increase production capacity by 2014. Its management resources will be devoted to battery business for automobiles, motorcycles and forklifts in a bid to enhance its competitive edge in a rapidly growing market of various types of batteries in Asia, especially in Thailand and ASEAN countries. The Company is set to invest aggressively to enhance production of batteries for use in new-generation devices like an automatic engine stop and start system. Its yearly production capacity of batteries for automobiles in Thailand, which now stands at a level of 3.8 million, will be raised 58 percent to 6 million in 2014. Capacity for motorcycles and forklifts will also be boosted 20 percent and 100 percent respectively. Siam GS Battery Co., Ltd., The Company's affiliate that produces batteries for automobiles and motorcycles, is now constructing a new plant, which is slated to complete at the end of this March. Its capacity for automobiles is expected to grow about 67 percent to 5 million in 2014. Another affiliate Yuasa Battery (Thailand) intends to focus its operation on motorcycle batteries. (From an article in the Nikkan Jidosha Shimbun on February 24, 2012)

<China, South East Asia>
-The Company will be intensively pooling the group-wide purchasing of lead battery materials involving its overseas production facilities in China and Southeast Asia, announced on April 25. It expects to reduce 500 million yen in purchasing costs in fiscal 2011, and 1 billion yen in fiscal 2012. The Company now manufactures and sells batteries at 41 plants in 19 countries worldwide. Currently each local plant negotiates with suppliers separately on purchasing terms and conditions of materials and components. From fiscal 2011, The Company's purchasing department will undertake negotiations collectively with suppliers on behalf of negotiators at each plant by bundling orders. The pool purchasing will be applied to such materials as lead, separators and resin at 14 production facilities located in China and Southeast Asia. While watching effectiveness of the program, the battery manufacturer will consider expanding its application to new locations. (From an article in the Nikkan Jidosha Shimbun on April 26, 2011)

Performance Forecast by Segment for FY ending Mar. 31, 2013

(in billion of JPY)

		FY ending Mar. 31, 2013 (Estimate)	FY ended Mar. 31, 2012 (Result)	Rate of Change (%)
Domestic Automotive Battery	Sales	60.0	58.8	2.0
	Operating income	5.0	4.3	16.3
Domestic Industrial Batteries & Power Sources	Sales	73.0	68.5	6.6
	Operating income	10.0	9.6	4.2
International Business	Sales	127.0	120.9	5.0
	Operating income	8.0	6.0	33.3
Lithium-Ion Battery	Sales	32.0	21.0	52.4
	Operating income	(4.0)	(3.3)	-
Others	Sales	18.0	16.2	11.1
	Operating income	(1.0)	(0.6)	-
Total	Sales	310.0	285.4	8.6
	Operating income	18.0	16.0	12.5

 

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Domestic Automotive Battery	596	-	-
Domestic Industrial Batteries & Power Sources	1,558	-	-
International Business	639	-	-
Lithium-Ion Battery	2,995	-	-
Other	460	-	-
Overall	6,250	5,854	4,442

 

R&D Facilities

Business Unit	Company	Location
Domestic Automotive Battery	GS Yuasa International Ltd.	Kyoto, Japan
International Business	GS Yuasa International Ltd.	Kyoto, Japan
	GS Battery Taiwan Co.,Ltd.	Tainan, Taiwan
	Yuasa Battery, Inc.	Pennsylvania, USA
	Yuasa (Tianjin) Technology Ltd.	Tianjin, China
Lithium-Ion Battery	GS Yuasa International Ltd.	Kyoto, Japan
	Lithium Energy Japan	Shiga Pref., Japan
	Blue Energy Co., Ltd.	Kyoto, Japan
	GS Yuasa Technology Ltd.	Kyoto, Japan

R&D Activities

Automotive Batteries for Japan
-The Company continued working on R&D activities involved with automotive lead-acid batteries. As part of the Company's activities in the area of technology for automotive batteries needed for fuel-saving vehicles such those with charge-controls and the idle-stop function (which are becoming more popular with customers), the Company is working to improve battery-charging performance

International Business
-The Company is conducting R&D activities on lead-storage batteries and nickel-metal hydride batteries. In the automotive lead-storage battery sector, the Company is working on developing batteries being produced and used outside Japan for charged-controlled and idle-stop vehicles. Based on its R&D achievements in this sector, the Company began producing lead storage batteries in Thailand. In addition, in Thailand and Indonesia, the Company added maintenance-free, double-lid batteries to its product mix.

Lithium-Ion Battery
-Basic R&D on lithium-ion batteries

• The Company is conducting R&D activities on medium- and large-size batteries in order to improve their reliability and safety. It is doing research especially under the aim of starting operations in the area of iron-phosphate lithium positive electrodes as soon as it can.
• In order to further improve the performance of lithium-ion batteries even more, the Company will search for and evaluate the performance of materials needed for next-generation positive electrodes and next-generation negative electrodes.
• The Company is studying post-lithium-ion batteries.

-Developing onboard lithium-ion batteries

• In continuing the legacy of the LEV50, developing new-type cells offering improved performance.
• In continuing the legacy of the EH4 lithium-ion battery designed for hybrid vehicles, developing new-type cells offering improved performance.

Product Development

Phosphoric Acid Vanadium Lithium for Positive Electrode of Li-ion battery
-The Company announced that it has enhanced its lineup of the Eco.R series NEO, its environmentally friendly batteries, in order to respond to increasing demand for applications in vehicles equipped with a charge management system or an automatic stop-start system. The company has improved the charging performance and expanded the battery lineup to cater to the requirements for such fuel saving technologies. It will release the new products in November, aiming to sell 1 million units a year. With lithium added to the electrolytic solution, the power receiving performance of the Eco. R LS and the Eco. R was boosted by about 5 percent from the existing products, respectively. When compared with the Company's standard batteries, the new Eco.R LS offers a 27 percent improvement, while the new Eco. R achieves a 22 percent gain. The charge management system is designed to control the power generating function of the alternator in order to enhance fuel economy. (From an article in the Nikkan Jidosha Shimbun on October 1, 2011)

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Domestic Automotive Battery	679	-	-
Domestic Industrial Batteries & Power Sources	890	-	-
International Business	3,447	-	-
Lithium-Ion Battery	30,525	-	-
Other	3,306	-	-
Overall	38,849	20,005	16,911

 
-During the fiscal year ending March 2013, the Company plans to invest 30 billion yen in its lithium-ion battery business in Japan, and 5 billion outside Japan.

Investment in Japan

-The Company announced that its subsidiary Lithium Energy Japan (LEJ) will commence work on its Ritto II Plant on December 15, which is located in Ritto City, Shiga Prefecture, Japan, to produce automotive lithium-ion batteries. LEJ has completed construction of the Ritto I Plant in Ritto City, which incorporates a manufacturing line, a test center and other facilities, and is preparing for mass production which is expected to begin in April 2012. The Ritto II Plant will consist of a single manufacturing plant building which is scheduled to be completed in August 2012. After completion, manufacturing activities are scheduled to begin in spring 2013. Together, the Ritto I and II Plants will employ a grand total of 1,100 people when they reach maximum production. The site area of the Ritto II Plant is 46,000 square meters, and the plant's total floor area will amount to around 50,000 square meters. The plant will have an annual manufacturing capacity of 1.2 GWh. This is the equivalent of approximately 6.5 million cells of LEV50 automotive lithium-ion batteries (3.7V, 50Ah), enough to power approximately 75,000 "i-MiEV" electric vehicles from Mitsubishi Motors. LEJ now has two lithium-ion battery plants in Kusatsu City, Shiga Prefecture and Kyoto City, Kyoto Prefecture. The combined annual production capacity of the Kusatsu, Kyoto, Ritto I and II plants will be 12.5 million cells (equivalent to approximately 2.3 GWh or enough to power approximately 150,000 vehicles). (From a press release on December 13, 2011)

New Facilities

(As of Mar. 31, 2012)

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	818	Mar. 2012	Within FY ending Mar. 31, 2013 or after April, 2013	Reduce costs
	Facilities for manufacturing lithium-ion batteries for automotive applications	323	Mar. 2012	Within FY ending Mar. 31, 2013 or after April, 2013	Increase production capacity
	Facilities for R&D and production activities; and facilities for renting to affiliated companies	2,966	Mar. 2012	Within FY ending Mar. 31, 2013 or after April, 2013	Expand R&D facilities, reduce costs, and add new manufacturing facilities
Lithium Energy Japan (Kyoto, Japan)	Facilities for manufacturing lithium-ion batteries for automotive applications	25,578	Nov. 2011	Within FY ending Mar. 31, 2013 or after April, 2013	Add new manufacturing facilities and increase production capacity
Blue Energy Co., Ltd. (Kyoto, Japan)	Facilities for manufacturing lithium-ion batteries for automotive applications	14,326	Jan. 2012	Within FY ending Mar. 31, 2013 or after April, 2013	Add new manufacturing tools
GS Battery Taiwan Co.,Ltd. (Tainan, Taiwan)	Facilities for manufacturing lead storage batteries	756	Dec. 2011	Within FY ending Mar. 31, 2013 or after April, 2013	Increase production capacity
Tianjin GS Battery Co., Ltd. (Tianjin, China)	Facilities for manufacturing lead storage batteries	893	Dec. 2011	Within FY ending Mar. 31, 2013 or after April, 2013	Increase production capacity
Yuasa Battery (Shunde) Co., Ltd. (Guangdong, China)	Facilities for manufacturing lead storage batteries	685	Dec. 2011	Within FY ending Mar. 31, 2013 or after April, 2013	Increase production capacity
PT. Yuasa Battery Indonesia (Tangerang, Indonesia)	Facilities for manufacturing lead storage batteries	508	Dec. 2011	Within FY ending Mar. 31, 2013 or after April, 2013	Increase production capacity
GS Battery Vietnam Co., Ltd. (Binh Duong, Vietnam)	Facilities for manufacturing lead storage batteries	657	Dec. 2011	Within FY ending Mar. 31, 2013 or after April, 2013	Increase production capacity