GS Yuasa Corporation

If the market price of lead, a key raw material for lead-acid batteries, the Company's core products, fluctuates, it may be difficult to immediately pass on such changes to product prices, potentially affecting business performance and financial condition. The Company recognizes this risk as constantly present, including in the following fiscal year, and addresses it by promoting overall optimization of the production system, cost reductions, and the establishment of an optimal supply system.

Intensifying competition with domestic competitors as well as overseas companies supplying products at low cost may make it difficult to maintain or expand market share and preserve profitability. Since declining profitability could also spread to impairment risk on fixed assets, the Company is promoting a wide range of cost reduction and sales capability enhancement measures.

While the Company targets the start of mass production of Lithium-ion Batteries for BEV (Under Development) in fiscal 2027, the technology is currently at the development stage and there is no guarantee that mass production will commence as planned. Furthermore, revisions to BEV expansion strategies by major automakers (a slowdown in BEV expansion) are changing the market environment, making it difficult to forecast business profitability. As countermeasures, the Company aims to improve utilization rates and profitability in its automotive lithium-ion battery business outside of BEV applications, and to strengthen stable cash generation capability through its lead-acid battery business.

The Company conducts business globally across Japan, Asia, North America, Europe, and other regions, and fluctuations may affect business performance and financial condition through the yen conversion of local-currency-denominated items and impacts on production and procurement costs. Additionally, some interest-bearing debt is subject to interest rate fluctuations, and under the Seventh Mid-Term Management Plan, the Company anticipates an increase in interest-bearing debt due to active growth investment, while maintaining financial discipline by keeping the debt repayment period to approximately 3 years. The Company also works to minimize the adverse effects of short-term exchange rate fluctuations through currency hedging transactions.

The Company's overseas business activities in Japan, Asia, North America, Europe, and other regions involve a wide range of risks, including unexpected changes in laws and regulations, international tax risks such as transfer pricing taxation, difficulty securing human resources, and social disruption due to terrorism or war. The Company addresses these risks by strengthening communication between headquarters and each site to build a system capable of promptly providing products and services that meet the needs of regions worldwide.

The Company positions M&A as an important means of business expansion, but if an acquired business does not progress as planned due to significant changes in the business environment or other factors, there is a possibility that invested funds may become unrecoverable or goodwill impairment losses may occur, affecting business performance and financial condition. The Company strives for early identification of such risks by conducting monthly performance monitoring.

If the global supply chain spanning Japan, Asia, North America, Europe, and other regions is disrupted due to circumstances in various countries and regions, procurement of materials and sales activities may be delayed, potentially affecting business performance and financial condition. The Company addresses this by strengthening communication between headquarters and each site and promoting overall optimization of the production system to build an optimal supply system.

If information leakage occurs due to improper handling of information equipment, or if information is leaked or tampered with due to external cyberattacks, this could lead to suspension of business activities and potentially affect business performance and financial condition. The Company implements measures such as preventing malware infection on endpoints, continuous monitoring of communications, introduction of unauthorized access detection systems, employee awareness and education, and security guidance for overseas group companies.

If defects occur in products or services, the Company may be held liable for damages, and significant costs may be incurred to address such issues, potentially affecting business performance and financial condition. The Company has established the

If events or unforeseen circumstances arise that make it extremely difficult to adapt to environmental regulations, this could result in environmental response costs exceeding expectations, facility damage from storms and floods, restrictions on business activities, and other impacts on business performance and financial condition. The Company has expressed its support for the TCFD recommendations and is working to reduce greenhouse gas emissions by leveraging battery technology to promote the spread of renewable energy, while also promoting information disclosure in line with the TCFD recommendations.