GS Yuasa International Ltd. Business Report FY ended Mar. 2014
|(in millions of JPY)|
|FY ended Mar. 31, 2014||FY ended Mar. 31, 2013||Rate of Change
|Sales||347,995||274,509||26.8||-Higher sales year-on-year due to (1) greater sales in Japan of automotive lithium-ion batteries and power-sources, (2) turning an affiliated subsidiary in Thailand into a consolidated subsidiary during the second quarter, and (3) favorable currency translation.|
|Current net income||9,982||5,767||73.1||-Higher income due to profits from the sale of investment securities, in spite of the Company’s recording an extraordinary loss because of a product recall for defective automotive lithium-ion batteries.|
|Domestic Automotive Battery|
|Sales||56,905||55,648||2.3||-Income increased to the strong sales mainly of automotive lead batteries for new vehicles with start-stop systems.|
|Operating income||3,310||3,931||(15.8)||-High increase in lead prices, the major raw material used by the Company.|
|Sales||164,252||119,885||37.0||-Turning an affiliated company in Thailand into a consolidated subsidiary, and favorable currency translation, etc.|
|Sales||32,501||10,597||206.7||-Higher sales of automotive lithium-ion batteries for plug-in hybrid ad hybrid vehicles|
|Operating income||(7,243)||(11,249)||(35.6)||-JPY 4.05 billion year-on-year improvement as a result of higher profits because of increased sales|
Major Contracts-Blue Energy Co., Ltd., based in Kyoto Prefecture, Japan, announced that its new lithium-ion batteries are installed on Honda's new "Accord Hybrid" and "Accord Plug-in Hybrid". The "Accord Hybrid" is equipped with the EH5 battery, which offers higher output and improved durability than conventional products, while maintaining the same product size. Meanwhile, the "Accord Plug-in Hybrid" features the large-capacity, high-power EH19 battery which ensures the outstanding levels of reliability and safety. (From an article in the Nikkan Jidosha Shimbun on July 16, 2013)
Recent Development Outside Japan
-The Company plans to increase production of automotive lead-acid batteries in Thailand to 5 million units per year by FY ending March 2019. This will be a 70% gain from the 3 million units produced in FY ended March 2013. Demand for these batteries is expected to grow significantly in the Thai market, where the government has introduced the second phase of its eco-car program and Japanese automakers are stepping up production. The Company expects to supply its batteries not only for vehicles sold in Thailand, but also for those destined for exports to its neighboring countries such as Myanmar, Cambodia, and Laos. In these countries including Thailand, sales of vehicles with engine stop-start systems are likely to expand, and these vehicles use lead-acid batteries. The Company expects that this whole region will develop into huge OEM and after-sales markets in the future, and intends to utilize its Thai operations as its major supply hub. (From an article in the Nikkan Jidosha Shimbun on April 17, 2014)
-The Company announced that it will increase its shares in Siam GS Yuasa Battery Co., Ltd. (SGS), an equity method affiliate in Thailand, to 60%. This will make SGS its consolidated subsidiary. GS Yuasa purchased a 10% share of SGS from other shareholders in March 2013, increasing the total share to 49%. In May 2013, the company will further increase SGS shares through a third-party allotment, which will raise its contribution ratio in SGS from 49% to 60%. Founded in 1966, SGS has been a center of automotive lead battery production and sales of GS Yuasa group in Thailand. After taking control of SGS, GS Yuasa will transfer the state-of-the-art battery technologies for idling stop cars to SGS and prepare for the production of five-million-unit batteries for vehicles by 2014 by introducing automated production facilities. GS Yuasa will accelerate the globalization of SGS and business expansion by investing its resources in the Mekong economic region. (From an article in the Nikkan Jidosha Shimbun on May. 18, 2013)
-The Company has established a wholly-owned subsidiary, GS Yuasa Asia Technical Center Ltd. (GYAT) in Samutprakarn Province of Thailand. GYAT is the Company's first overseas development base. The company will conduct market research and develop lead-acid batteries for automobiles and motorcycles to meet a growing demand in Southeast Asia. GYAT is capitalized at THB 30 million (JPY 100 million) and GS Yuasa plans to invest JPY 300 million in total in GYAT. (From an article in the Nikkan Jidosha Shimbun on January 31, 2014)
Mid-term Management Plan
-On July 30, 2013, the Company released its third mid-term management plan for FY ended March 2014-FY ending March 2016. Its lithium-ion battery business, which had been designated as a priority in the previous plan, failed to achieve its target due to a change in market conditions. The latest management plan aims to enhance the Company's competitive strength, placing emphasis on lithium-ion batteries and new energy businesses. The Company will invest a total of JPY 60 billion, of which JPY 12 billion will be spent on the lithium-ion battery business. The Company will boost sales in FY ending March 2016 to JPY 450 billion, up 63% over FY ended March 2013 level, with operating margins of 8% (JPY 36 billion), a net profit ratio of 5% (JPY 23 billion) and a return on equity (ROE) of 15% or higher. (From an article in the Nikkan Jidosha Shimbun on August 2, 2013)
-Performance objectives for the fiscal year that ends March 2016
- Sales: JPY 450 billion
- Operating profit margin: 8% (JPY 36.0 billion)
- Current net income margin: 5% (JPY 23.0 billion)
- ROE: 15% or more
|Strengthening operational foundations for new businesses (lithium-ion batteries, new energies)||・Search and challenge ways for expanding operations in new markets and sectors|
|Raise ranking in the global market||・Design initiatives for specific target markets, shifting mindset from only thinking of “Japan/non-Japan”
-Capture second highest market share in the world of automotive batteries
(in 2015: 11% share and 48 million units) (in 2012, achieved third highest market share, 8%)
-Keep No. 1 market share in Asia
(in 2015, 22% share and 28 million units) (in 2012, achieved highest share, 19%)
-Capture 14% of the automotive battery market in China in 2015 (In 2012, had 9%)
-Expand in new emerging markets such as South America, the Middle East, Africa, etc.
|Raise profitability of existing business operations||・Ascertain the market, competition, company trends to further streamline operations and expand sales|
|Improve financial structure||-|
Performance Forecast by Segment for FY ending Mar. 31, 2015
|(in billions of JPY)|
|FY ending Mar. 31, 2015
|FY ended Mar. 31, 2014
|Domestic Automotive Battery||Sales||52.0||56.9||(8.6)|
|Domestic Industrial Batteries & Power Sources||Sales||86.0||79.2||8.6|
Initiatives to achieve objectives set for the fiscal year ending March 2015
-Automotive batteries in Japan: Increase market share by selling more batteries designed for eco-cars.
-Sales target: 9 million units
-Market share target: 40%-Outside Japan:
- Expand production of automotive batteries in China. -Targeted production capacity: 9.5 million units (at new plant facilities in Tianjin; on increased production lines in Shunde)
- Expand production of motorcycle batteries in Vietnam -Targeted production capacity: 9.0 million units
- Strengthen operational foundations at Siam GS Group, a former affiliated company in Thailand, which was turned into a consolidated subsidiary
- Respond to increased production in Indonesia
- -Target production capacity of automobile batteries: 10 million units (began mass-production at new plant at PTGS in Java)
- -Target production capacity of motorcycle batteries: 29 million units (plans call for increasing production at PTGS and Yuasa Indonesia)
- Lithium Energy Japan (LEJ): launched mass-production on new production line at Ritto Plant 2
- Blue Energy Company (BEC): Launched commercial production on new production line
|(in millions of JPY)|
|FY ended Mar. 31, 2014||FY ended Mar. 31, 2013||FY ended Mar. 31, 2012|
|Domestic Automotive Battery||676||663||596|
|Domestic Industrial Batteries & Power Sources||1,923||1,793||1,558|
-R&D Expenditure for FY ending March 2015 is planned to be JPY 7,300 million.
|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|
|GS Yuasa Asia Technical Center Ltd.||Samutprakarn, Thailand|
|Lithium-Ion Battery||GS Yuasa International Ltd.||Kyoto, Japan|
|Lithium Energy Japan||Shiga Pref., Japan|
|Blue Energy Co., Ltd.||Kyoto, Japan|
R&D ActivitiesDomestic Automotive Battery
-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 charged-controlled and the idle-stop function (which are becoming more popular with customers), the Company is working to improve durability and battery-charging performance.
-The Company unveiled the Eco.R Long Life high-performance battery series, the first in the domestic market which can be installed both on normal cars and idling stop cars. The "Eco. R Long Life" battery features a 200 -300% longer life than the Company's standard battery and is scheduled for launch in July 2013, with which the Company aims to achieve 100,000 unit sales per year. (From an article in the Nikkan Jidosha Shimbun on May. 18, 2013)
-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 for idle-stop vehicles in China following Thailand.
-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, as well as improve their energy density. 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.
- Increasing not only production volumes but also types of lithium-ion batteries for electric, plug-in hybrid, and hybrid vehicles.
Joint Development Project-A German company Robert Bosch GmbH and two Japanese companies, the Company and Mitsubishi Corporation, announced on June 20, 2013 that they've agreed to develop the next-generation of high-performance lithium-ion batteries together. The three companies intend to set up a JV for joint research and development in Stuttgart, Germany in early 2014, to support their mother companies in sales and marketing activities. The JV aims to increase energy content of the batteries while reducing their weight, and increase the range of both electric and plug-in hybrid vehicles. Bosh will hold a 50% share of the JV, while the Company and Mitsubishi Corporation are going to hold 25% respectively. The JV will integrate the three companies' respective strengths. They include Bosch's technologies in developing battery packs and integrating them into electrified vehicles; GS Yuasa's expertise in materials systems, electrochemistry, and production of battery cells; and Mitsubishi Corporation's global competence in procuring lithium resources and other materials. They will initially head up a team of some 70 associates in Germany and Japan.
|(in millions of JPY)|
|FY ended Mar. 31, 2014||FY ended Mar. 31, 2013||FY ended Mar. 31, 2012|
|Domestic Automotive Battery||1,096||641||679|
|Domestic Industrial Batteries & Power Sources||1,659||1,044||890|
-During the fiscal year ending March 2015, the Company plans to invest JPY 17,000 million total, including JPY 6,000 million outside Japan.
Planned Capital Investment
|(As of Mar. 31, 2014)|
(in millions of JPY)
|Date of start||Scheduled date of completion||Purpose of the investment|
|GS Yuasa International Ltd.
|Facilities for manufacturing storage batteries, etc. for automotive applications||1,232||Mar. 2014||Within FY ending Mar. 31, 2015 and after April, 2015||Reduce costs, add new manufacturing tools|
|Facilities for manufacturing lithium-ion batteries for automotive applications||335||Mar. 2014||Within FY ending Mar. 31, 2015 and after April, 2015||Expand R&D facilities|
|R&D facilities, production facilities||3,318||Mar. 2014||Within FY ending Mar. 31, 2015 and after April, 2015||Expand R&D facilities, reduce costs, new manufacturing tools|
|Lithium Energy Japan
|Facilities for manufacturing lithium-ion batteries for automotive applications||2,269||Jan. 2014||Within FY ending Mar. 31, 2015 and after April, 2015||Add new manufacturing facilities and increase production capacity|
|Blue Energy Co., Ltd.
|Facilities for manufacturing lithium-ion batteries for automotive applications||1,835||Jan. 2014||Within FY ending Mar. 31, 2015 and after April, 2015||Add new manufacturing tools|
|Tianjin GS Battery Co., Ltd.
|Facilities for manufacturing lead storage batteries||1,196||Dec. 2013||Within FY ending Mar. 31, 2015 and after April, 2015||Increase production capacity|
|Siam GS Battery Co., Ltd.
|Facilities for manufacturing lead storage batteries||1,038||Dec. 2013||Within FY ending Mar. 31, 2015 and after April, 2015||Increase production capacity|
|PT. Yuasa Battery Indonesia
|Facilities for manufacturing lead storage batteries||665||Dec. 2013||Within FY ending Mar. 31, 2015 and after April, 2015||Increase production capacity|
|Century Yuasa Batteries Pty Ltd.
|Facilities for manufacturing lead storage batteries||656||Dec. 2013||Within FY ending Mar. 31, 2015 and after April, 2015||Increase production capacity|
|GS Battery Vietnam Co., Ltd.
(Binh Duong, Vietnam)
|Facilities for manufacturing lead storage batteries||648||Dec. 2013||Within FY ending Mar. 31, 2015 and after April, 2015||Increase production capacity|