ユアサ商事（8074） – Integrated Report 2021（YUASA GROWING REPORT）

YUASA GROWING REPORT 2021Integrated Report 2021YUASA GROWING REPORTService Integrated Shosha GroupTSUNAGUTop Message 2CONTENTSChapter 2 Strategy Connecting Us to the Future 12Chapter 1Two Driving Forces Connecting Us to the Future Driving Force 1 Promotion of Sustainability Management 6Driving Force 2 Promotion of DX 10Value Creation Process, Financial Strategy, Current YUASA TRADING Group, Growth Strategy, Segment Business Overview• Basic philosophyThe actual results of the fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021) is the main target of this report.A portion of results before or after this period are also included.• Scope of items reportedIn principle, the results of YUASA TRADING and 42 group companies (34 consolidated subsidiaries) as of March 31, 2021 are reported.• Regarding notes to consolidated financial statementsThis integrated report has not included the notes to consolidated financial statements. Please see “Securities Report” available on the Investor Relations – IR Library on the corporate website for these notes.• Precautions on forward-looking statementsIn the statements of this integrated report, statements other than historical facts are forward-looking statements that reflect YUASA TRADING’s plans and expectations. Please note that actual results and performance may vary from these statements as a result of various risks, uncertainties and other factors.• Date of publishingNovember 2021Editing PolicyTotal number of authorized shares40,000,000 sharesTotal number of issued shares23,155,882 shares(including treasury share of 868,978 shares)Number of shareholders7,676Shareholder ratioFinancial service providers0.64%Other corporations19.52%Financial institutions24.59%Foreign corporations, etc.27.72%Individuals/other23.77%Shares held in own name3.76%Major shareholders (top 10)Trends of stock price and volumeShareholder nameNumber of shares (thousand shares)Ratio of shareholding (%)Custody Bank of Japan, Ltd.2,34110.50The Master Trust Bank of Japan, Ltd.1,6517.41STATE STREET BANK AND TRUST CLIENT OMNIBUS ACCOUNT OM02 5050029114.08Yuasa Tankyo Shareholding Association8223.68BBH FOR FIDELITY PURITAN TR: FIDELITY SR INTRINSIC OPPORTUNITIES FUND6753.02West Yuasa Yamazumi Shareholding Association6322.83Sumitomo Mitsui Banking Corporation5942.66East Yuasa Yamazumi Shareholding Association5872.63YUASA TRADING Employee Shareholding Association4832.16DAIKIN INDUSTRIES, LTD.4522.02(thousand shares)(yen)VolumeShare priceSept. 2021Apr. 2020Apr. 2018Apr. 2016Apr. 2014Apr. 201202,0004,0006,0008,0001,0002,0003,0004,0005,0001. The number of shares shown in the above list are rounded down to the nearest thousand shares.2. The ratio of shareholding is calculated by deducting treasury stock and rounded down to the second decimal place.3. The Company holds 868,000 shares as treasury share, which is not included in the above table. Further, the Company shares (196,000 shares) held by the Board Incentive Plan is not included in treasury shares.4. Of the trust bank holding listed on the left, the number of shares related to trust operations of trust banks is as follows. Custody Bank of Japan, Ltd. 2,341,000 shares The Master Trust Bank of Japan, Ltd. 1,651,000 shares* The number of shares constituting one unit is 100 shares.Share Information (as of March 31, 2021)61Integrated Report 2021“SUMIYA Ukeainashi”―Service With Good Products and Well-Thought-Out Advertising―SUMIYA (VI) Shichizaemon (1758-1836), the sixth owner of the SUMIYA and brilliant salesman, inscribed “SUMIYA* Ukeainashi” (meaning quality not guaranteed) on his razor that had excellent cutting capabilities. He distributed this as sample to barber shops in towns along the Tokaido Road.Users were surprised by the cutting ability and wondered how amazing the guaranteed razors would be if the SUMIYA’s not guaranteed razors were this good. The razors gained a reputation and the name of the SUMIYA spread across Japan.* Company name of YUASA TRADING during the Edo eraIdeals Passed Down the GenerationsSpirt of Service With Good ProductsTSUNAGUChapter 3 Business Foundation to Connect to the Future 39Financial data, YUASA TRADING Group Network, Corporate Profile, Share Information 54Environmental initiatives, Realizing a resilient society, Creating organizations that utilize human resources, Corporate GovernanceIdeals to Pass Down the GenerationsValue CreationRealize a sustainable society through “TSUNAGU” value creation that connects people with people, people with products, and people with information and technology.1Integrated Report 2021Mar. 2021 resultsMar. 2023 planMar. 2026 plan▶Net sales¥432.1 billion¥545.0 billion¥600.0 billion▶Ordinary profit¥10.0 billion¥16.4 billion¥20.0 billion▶Ordinary profit to net sales ratio2.3%3.0%3.3%▶ROE 8.1%11.4% or more11.7% or more▶Shareholder return ratio31.9%33.0% or more33.0% or moreNumeric targets (consolidated)■ Overseas ■ Robot (AI) & IoT ■ Eco & Energy Solution ■ New Distribution ■ Resilience & Security■ Agriculture Process ■ Long-term Care & Medical ■ Food Equipment ■ Sharing ■ Existing Core businessesGrowth business strategyNet sales¥545.0 billionOrdinary profit¥16.4 billionNet sales¥600.0 billionOrdinary profit¥20.0 billionCreate a sustainable management foundation through “comprehensive capabilities,” “challenges,” and “communication”Growth business strategyGrow into a “TSUNAGU Service Integrated Shosha Group” with industry-leading profit structureYUASA VISION 360(Vision for 2026 (360th anniversary of the founding of the Company))Growing Together 2023Top MessageWe established “YUASA VISION 360” as our 2026 vision for the 360th anniversary of the founding of the Company. This plan established numeric targets of consolidated net sales of ¥600.0 billion, ordinary profit of ¥20.0 billion, ordinary profit to net sales ratio of 3.3%, ROE of at least 11.7%, and shareholder return ratio of at least 33.0% for the fiscal year ending March 31, 2026. It also aims for the group to grow into a “TSUNAGU Service Integrated Shosha Group” with an industry leading profit structure.In April 2020, we announced the Mid-term Management Plan “Growing Together 2023,” which ends in the fiscal year ending March 31, 2023, as the second stage of “YUASA VISION 360.”The quantitative targets of the Mid-term Management Plan are as follows: The pie chart on the right shows the goals for 2026. The pie chart of the left shows the goals for Growing Together 2023. By strengthening the Existing Core businesses and increasing the ratio of the nine Growth businesses, we aim for future consolidated net sales of ¥600.0 billion and ordinary profit of ¥20.0 billion.In the Overseas Business, we are focused on strengthening our transactions with local capital companies. We have positioned Thailand as our highest priority, where we will establish a Construction Division in addition to the Industrial Division and Living Environment Division that are already in place. Our aim is to grow this as the central Southeast Asia site.In the Robot (AI) & IoT Business, we developed the add-on robot system “Robo Combo” for users who are considering introducing robots. We have started selling this product this fiscal year. By connecting robot and tool manufacturers with ROBOT ENGINEERING CO., LTD., the systems integrator of the Company’s Group, we are able to realize automation of production facilities at low costs and in a short time.In the Eco & Energy Solution Business, we promote the total support of the ESG management of companies. We recently provided support for Kanazu Murata Manufacturing Co., Ltd. from the Murata Manufacturing Group to create a factory wholly powered by renewable energy. In addition to providing equipment such as solar power generation modules, power conditioners, and carports, we conducted the prime construction work of the project, assisted customers in achieving carbon neutrality, and reduced the burden on customers for power supply networks that are part of the social infrastructure.1. Direction the Company’s Group seeks2. Progress of Med-term Management Plan “Growing Together 2023”YUASA VISION 360Status of progress of the Growth business Since our founding, the Company had held a corporate philosophy based on three elements, “Honesty and Trust,” “Enterprise and Innovation” and “Regard for the Individual.” “Honesty and Trust” and “Regard for the Individual” are part of a core philosophy that sustains our business and company organization. “Enterprise and Innovation” is meant to consistently develop and operate businesses based on the needs of society and the times. In other terms, we have maintained our business over 350 years based on a corporate philosophy of making “change” a constant part of our company.Resolving social issues through business is a role that the society and stakeholders demand of us. I am proud to say that the history of YUASA TRADING is one that faced social issues in Japan and the world head on. I believe that our societal value lies in creating new value by connecting (“TSUNAGU”) people with people, people with manufacturing, and people with information/technology.In the field of manufacturing, we have operated hubs in countries in Southeast Asia since Japanese companies began to enter foreign markets in the 1990s. By connecting the manufacturing sites in Japan and the world, we have contributed to manufacturing across the world.In the field of home building, we have expanded out lineup of solar power generation systems and high performance energy-saving housing equipment. We proposed environmentally-friendly, pleasant home building by connecting these products and systems.In the field of environment building, we established the YES (YUASA Environment Solution) Division, a specialized department for Eco & Energy Solutions in 2009, pioneering this area in the industry. We have supported the ESG management of our clients by connecting the know-how we gained from environmental consulting for hundreds of companies.In the field of town building, we started a resilience business from 2014 with “disaster prevention, disaster mitigation, and BCP” as our keywords. We generated new solutions that contribute to safe and secure town-building by connecting the technology of affiliated manufacturing companies.We will continue to take efforts to resolve social issues through business with “TSUNAGU” value creation.Realizing a sustainable society through “TSUNAGU” value creationRepresentative Director, President & CEOKanazu Murata Manufacturing Co., Ltd. (Fukui Prefecture), where the Company supported efforts to create a factory wholly powered by renewable energyContribute to society through manufacturing, home building, environment building, and town building ¥17.0 billion(From April 2020 to March 2023, 3 years)InvestmentsHiroyuki Tamura23Integrated Report 2021Integrated Report 2021Top MessageIn the Resilience & Security Business, we promoted development of original projects that address social issues based on themes of disaster prevention, disaster mitigation, and BCP. We developed aluminum privacy fence Yachibei® used for improving concrete walls in a Core business – Strengthen functions of trade businessIn the Core businesses, we strove to strengthen IT/logistics functions in the trade business to “deliver joint product with our business partners. This product is needed products at the needed times.”being adopted more and more as it uses the pillars and foundation of the existing concrete wall while reducing costs, shrinking construction time, and constraining the emission of industrial waste.In the e-commerce site “Growing Navi” the Company operates, we started operating a B-to-B-to-U (User) system that connects the Company, sales partners, and users from this fiscal year. We are promoting the use of In the Long-term Care & Medical Business, our group this system as a digital sales tool in the COVID-19 era for subsidiary FUJI QUALITY HOUSE CO., LTD. developed the sales partners who are limited in visiting their users.container house, Infection Reduction House, which was developed as a simple examination room for COVID-19 or for receiving outpatients who contracted the virus. This product has been used in a wide array of COVID-19 immunization venues and hospital facilities nationwide. Medical container houses have gained attention from overseas developing nations. In the future, we will expand this business overseas.In the Agriculture Process Business, we have been successful in promoting proposals for fluorescent lighting that invigorates the immune capabilities of strawberries with UV-B (ultraviolet rays).In the Food Equipment Business, we exercised engineering functions on the theme of “food safety” and made total proposals for the automated production line for food product factories.times.In the Sharing Business, we started a driver and agriculture machine sharing service to be used through agriculture corporations.Concept of Growing Navi B to B to USuppliersThe Company (B)Sales partners (B)Users (U)Approx. 550 companies2.5 million itemsApprox. 2,000 companies(Sales partners with IDs)Company ACompany BCompany C…For logistics functions required for e-commerce, we are focused on processing logistics to shrink delivery times. In our Kanto Distribution Center (Kashiwa City, Chiba Prefecture), we manufacture and assemble automatic valves and chain slings. From this fiscal year, this center began providing services for air conditioning renovation work and cleaning of oil from products before shipping. We will support these efforts to further shrink delivery 3. Build foundation for growthDX (digital transformation) promotion project beginsIn the Mid-term Management Plan “Growing Together 2023,” we are promoting a digital transformation across the Group as a means of strengthening our management foundation. We aim to convert all of the knowledge and know-how the Company’s Group has amassed into data the general market. By applying AI to this data, we will develop new services and products that address social issues as we realize a transformation From “Single Item Business” to “Integrated Product-Service.”In September 2021, we selected 23 DX promotion members in-house and began specific initiatives. In the future, management will take the lead and strive to establish a competitive advantage utilizing data and digital technology.The Company’s Group announced the “Sustainability Declaration” based on our corporate philosophy in as well as concentrate data from business partners and Sustainability DeclarationOctober 2021 in order to further advance the management foundation we have passed down over more than 350 years. We aim to be carbon neutral* across the entire YUASA TRADING Group by the fiscal year 2030 to achieve “harmony with the global environment.” We also aim to realize a sustainable society through “business activities for Service with good products” and “management that respects humanity.” To realize our Sustainability Declaration, we established the Sustainability Promotion Committee, chaired by the Representative Director, and the Sustainability Promotion Office in the Corporate Planning Department, as our promote structure. We will develop an action plan and execute upon it.Recognizing climate change as an important management issue, the Company’s Group plans to declare support for the TCFD (Task Force on Climate-Related Financial Disclosures). We are taking a proactive approach to information disclosure on how climate change affects our Group business activities based on the recommendations of the TCFD.* Scope of businesses subject to carbon neutrality: [Scope 1] Direct CO2 emissions from YUASA TRADING and group companies, [Scope 2] Indirect CO2 emissions corresponding to generation of energy used by each companyInitiatives to strengthen corporate governanceWe are conducting initiatives to strengthen governance and risk management based on the application of the Revised Version of Japan’s Corporate Governance Code. We elected three Outside Directors at the 142nd Ordinary General Meeting of Shareholders held in June 4. Sustainable developmentFostering a culture based on the keywords “challenge,” “comprehensive capabilities,” and “communication” My greatest mission is to build a management foundation that can survive periods of extreme change. I think that the key factors for achieving this are “comprehensive capabilities,” “challenges,” and “communication.” Firmly positioning these elements within our Group corporate culture is the key to shaping the YUASA TRADING Group that will continue into the future and reach the 400th anniversary of the founding of the Company. I will take the lead in promoting this transformation in our corporate culture and focus on building a foundation for sustainable development.2021 in order to increase the transparency of corporate governance, raising the percentage of Independent Outside Directors in the Board of Directors. We are also selling shares based on guidelines for holding standards in order to reduce the strategic shareholdings on an ongoing basis. In addition, we are executing initiatives to improve the effectiveness and transparency of the Board of Directors, such as disclosing the skill matrix of Director candidates and changing the decision-making process for individual Director remuneration.We aim to maintain at least a 33.0% shareholder return ratio, including ongoing and stable dividends, in order for shareholders and investors to hold our shares for a long time. While balancing business investments and return to shareholders, we will maintain financial health as we aim to increase share value by investing profits generated through business activities in growth businesses and new businesses.We truly appreciate your continued support.4Integrated Report 2021Integrated Report 20215Promotion of Sustainability ManagementBased on our corporate philosophy of “Honesty and Trust,” “Enterprise and Innovation” and “Regard for the Individual,” YUASA TRADING Group has contributed to the further development of prosperous, humanitarian societies by valuing mutually beneficial, symbiotic relationships in all countries and regions of the world, with a focus on maintaining harmony with the global environment.In order to further advance our management foundation passed down over 350 years, we enacted a “Sustainability Declaration” based on this corporate philosophy and are proactively contributing to the construction of a sustainable society.Discussions in forming the Sustainability DeclarationSustainability DeclarationWe believe sustainability is the resolution of social issues through business as targets in the “YUASA VISION 360.” A study team consisting of the Corporate Planning Department of the Company and outside experts considered materiality, Sustainability Declaration details, promotion structure, and the action plan.We also discussed deploying the energy storing know-how from the Eco & Energy Solutions Business in-house in order to proactively take efforts to calculate and reduce greenhouse gases.We aim to be carbon neutral across the entire YUASA TRADING Group by the fiscal year 2030. We will also focus on creating a relationship of mutual benefits, respond to climate change, and strive to reduce our environmental impact across the entire supply chain.Harmony with the global environmentBased on the mindset of “Service with good products” that has been passed down from the founding of the Company, we conduct fair, honest, and reliable commercial transactions as well as promote the creation of a safe, secure, and rich society with our stakeholders as a “TSUNAGU Service Integrated Shosha Group.”Business activities for Service with good productsWe operate diversity management that respects the individuality and human rights of employees. We will develop as the corporate group where each employee can feel their work is meaningful and is able to grow.Management that respects humanity1.2.3.• The resilience and environmental solutions as well as SDG initiatives at YUASA TRADING are more forward-thinking, so we hope the company will continue to grow these areas further. (Business partner)• We hope to see proactive information disclosure about execution processes and specific action plans. (Business partner)• We are not unfamiliar with the concept of materiality. Resilience is a keyword for Japan and a strength of YUASA TRADING, so this can be utilized in future developments. (Financial institution)Major opinions and advice received at hearing to stakeholdersMateriality selection processWe have established the procedures below for important issues (materiality) that we will focus on to preserve sustainable growth.1. Extraction of issuesBased on our corporate philosophy and relationship with stakeholders, we conducted initiatives for ESG (Environment, Social, Governance) and extracted issues needed to achieve the YUASA VISION 360 in each business division.2. Setting prioritiesThrough dialogue with external experts, we created a materiality matrix (refer to page 8) after organizing important areas based on sustainability direction.3. Confirmation of appropriatenessWe conducted discussions in the management meeting attended by Directors and Senior Executive Officers, as well as held hearings with major stakeholders and Outside Directors to confirm the appropriateness of measures.4. Identification of materialityMateriality was determined by the Board of Directors.Driving Force1.Support for TCFDRecognizing climate change as an important management issue, the YUASA TRADING Group plans to declare support for the TCFD (Task Force on Climate-Related Financial Disclosures). We are enhancing our information disclosure on how climate change affects our Group business activities based on the recommendations of the TCFD.67Integrated Report 2021Integrated Report 2021Two Driving Forces Connecting Us to the FutureChapterAction planPresident, FINEV inc.After graduating from Keio University, she acquired a master’s degree from University of Pennsylvania (Environmental Studies). From 2021, she spent ten and a half years at a major think-tank performing environment and CSR consulting, and then established FINEV inc. She currently provides ESG-related consulting and support related to the environment and climate change.She concurrently serves as outside director at YAMADA HOLDINGS CO., LTD. and Funai Soken Holdings Inc., and part-time director at the Japan Accreditation Board (JAB).Ms. Miki MitsunariComment from expertAcross the world, more companies are making ESG investments as sustainability becomes incorporated into company evaluations. More bonds that take into consideration the environment and society are being issued in order to raise capital. The revised Corporate Governance Code also calls for the involvement of the Board of Directors in sustainability and the disclosure of climate change information. As such, the importance of sustainability initiatives that address ESG (E: Environment, S: Society, G: Governance) is rising. This shift is not a transitory one, but a large international transformation. Regulations and policies to encourage ESG-focused management are likely to continue.Based on this background, the materiality of the YUASA TRADING Group finds significance in initiatives in its main businesses, the Resilience & Security Business, the Eco & Energy Solution Business, and in addressing management issues in SMEs that it often transacts with. According to the Sustainability Declaration, it will be more active in communication with stakeholders. Therefore, I expect new innovation to be generated that will further strengthen its main business.Along with the “Sustainability Declaration,” we established the Sustainability Promotion Committee in October 2021. This committee, which is comprised of Directors and Senior Executive Officers and chaired by the Representative Director, will inquire and provide advice about important sustainability issues to the Board of Directors.The administrative bureau is the Sustainability Promotion Office, which was established in the Corporate Planning Department. It will collaborate with each business division, formulate policies, gather and manage data related to ESG, and conduct improvement activities. Sustainability management promotion systemBoard of DirectorsSustainability Promotion Committee(Committee Chairperson: Representative Director)Governance Advisory CommitteeSupport promotionCollaborateSustainability Promotion Office(inside Corporate Planning Department)Each business division and group companiesIndustrial Market Headquarters, Living Environment Market Headquarters, Construction Market Headquarters, Management Administration, group companies in Japan, and group companies overseasMateriality matrixImportance to the Company’s GroupImportance to society/stakeholdersExtremely important● Realize a safe and secure society through Service with good products● Support sustainable manufacturing, home building, environment building, and town building● Support cyclical society (rental and sharing)● Respond to climate change (realize a resilient society)● Contribute to decarbonization of society through energy creation and saving know-how● Create co-creation value – “Tsunagu”● Promote Robot (AI) and IoT Business● Strengthen relationship with business partners (strengthen DX and logistics promotion in and outside the Company)Comparatively important● Lower environmental impact through company activities● Promote health management and comfortable working environments for the 400th anniversary of the founding of the Company● Promote diversity (women, foreign nationals, mid-career hires)● Enhance education and training (strengthen human resource capabilities)Comparatively importantExtremely importantImportant areas inside the CompanyImportant items in YUASA VISION 360 and Mid-term Management Plan(Areas to increase impact on society)Sustainability Declaration Themes● Harmony with the global environment● Business activities for Service with good products● Management that respects humanity2.(1) Formulate transaction policy with business partners (2) Formulate action plan directed at compliance with transaction policy(3) Spread awareness of transaction policy to business partners and conduct a questionnaire to check on current situationBusiness activities for Service with good products3.(1) Establish diversity policy and targets (2) Establish human rights policy and other policies(3) Consider conducting in-house education and training program and other initiatives; continuously conductManagement that respects humanity4.Gather data related to ESGs and enhance information disclosureGathering, management, and disclosure of ESG-related data◦Initiatives to achieve carbon neutralityImplement renewable energyReduce purchased electricity and CO2 emissions by consuming electricity generated by solar power on site with no CO2 emissions.Promote energy-saving (operation and equipment)Reduce purchased electricity and CO2 emissions by energy-saving, such as making operations improvements and updating to more efficient equipment (lighting/air conditioning).Switch to eco-friendly company vehiclesReduce CO2 emissions by switching to eco-friendly vehicles for sales and distribution.Fix CO2 by company-owned forestsFix CO2 by ongoing management of the Company’s Group-owned forests.Purchase renewable energyReduce CO2 emissions by purchasing power generated by zero carbon renewable energy (power with no net CO2 emissions as offset by non-fossil certificates (credits), etc.).Utilize emission creditsOffset emissions through CO2 emission credits held by the Company.(2) Respond to climate change (adaptation) a) Promote the Resilience & Security Business b) Confirm the climate change risks of major sites and business partners in and outside Japan(3) Respond to climate change (mitigation) a) Promote the Eco & Energy Solution Business(1) Calculate the CO2 emissions inside the YUASA TRADING Group and determine reduction targets. Evaluate the financial impact and disclose as appropriate. a) Calculate the CO2 emissions (Scope 1&2) b) Calculate the CO2 emissions (Scope 3) c) Comply with TCFD(Note) Scope 1: Direct greenhouse gas emissions though the business itself (consuming fuel, industrial processes) Scope 2: Indirect emissions through use of electricity, heat, or steam supplied by another company Scope 3: Indirect emissions not covered in Scope 1 or Scope 2 (emissions from another company related to business activities)1.Harmony with the global environmentAdministrative bureau89Integrated Report 2021Integrated Report 2021Two Driving Forces Connecting Us to the Future ― Promotion of Sustainability ManagementChapterPromotion of DXFrom the fiscal year 2022, we aim to establish an IT foundation shared across the global Group by 2026 based on each of “offensive DX” and “defensive DX” strategies.We will develop a “business originated in data” to utilize our amassed data.Promote business originated in dataStrengthen DX promotion structureIn February 2021, YUASA TRADING made CAC Knowledge Co., Ltd., which develops, maintains, and operates operations systems, a consolidated subsidiary. This addition of a consolidated subsidiary will strengthen the Company’s Group in the IT area, allow for smoother DX promotion, ensure the effectiveness of IT digital investments, and expand the IT-related business. This will lead to higher medium- to long-term corporate value of the YUASA TRADING Group.On April 1, 2021, the company’s name was changed to “YUASA SYSTEM SOLUTIONS CO.,LTD.” as it started anew. Made CAC Knowledge Co., Ltd. a consolidated subsidiary and launched YUASA SYSTEM SOLUTIONS CO., LTD.Establish global IT environment for the GroupDigital human resource trainingUpdate core operationsWe plan to shape our history and experience into data as much as possible as well as centralize market data and the information from our network of current suppliers and sales partners. By analyzing this data with AI, we can link it to new services and proprietary product development that solves social issues to realize the shift From “Single Item Business” to “Integrated Product-Service.”We aim to establish our competitive superiority utilizing data and IT technologies that no other companies possess.Becoming a digital trading company with “Integrated Product-Service” through DX promotion23 DX promotion members were selected across Japan and assumed their position in a ceremony in September 2021.We will promote DX in the YUASA TRADING Group by deliberating company transformation initiatives that utilize digital technology through projects that integrate the Sales Division and Management Administration.Select DX promotion membersPresident Tamura expresses expectations in the DX promotion member nomination ceremony (center)FY2021/3 to FY2023/3¥4.0 billionIT digital investmentsWe aim to acquire data from various customer touch points and construct services from a customer perspective (new business model) by analyzing customer emotions and actions from compiled data.We will establish a system environment that will be the foundation for YUASA VISION 360 and update the IT environment to be shared across the global Group.We will select personnel in charge of DX to promote DX as a company. We will train digital human resources to deploy businesses originated in data.We will update our legacy operating systems and improve operational efficiency by seamlessly connecting operations dispersed over various systems.Offensive DXDefensive DXHeading toward achieving YUASA VISION 360, we are promoting the separate phases of “offensive DX” and “defensive DX.”Fiscal Year 2020Fiscal Year 2022 and laterFiscal Year 2021Establish promotion structurePropose DX promotion planPromote initiatives for both “offensive DX” and “defensive DX”•Establish expert meeting• Form administrative bureau for DX promotion project• Survey current status of business issues, etc.•Form DX promotion organization• Propose both offensive and defensive DX promotion planBecome keystone of supply networkDigitalize core operations for digitalizationDefensive DXGenerate new businesses Offensive DXShape the YUASA supply network through a shift to “Integrated Product-Service.”TANKYOKAI, supplier networkYamazumi Shareholding Association, sales partner networkOperationaldata/electricityconsumptionvolumeCustomerprofileinventoryinformationBusinesspartnerinformationUser mapOrderhistoryReceivedorders/salesReceivedorders/procureReceivablesand payablesHR dataInquire/consult/failed ordersExhibitionvisitorsDecisionworkflowGrowing Navi EC (access log)Delivery data(information gatheredat distribution)Delivery data(information gatheredat distribution)CompliancecheckEstimateSalesknow-howproposals/priceAnalog data(papermedia/voice, etc.)Productinformation(environmentalperformance)New productinformationOrderinginformationInventoryExperttechnicianinformationCompetitiontrendsSite progress(image)Market status/overseas trendsPreferences/populationtrendsCurrencyexchangefluctuationMarketUsersYamazumiShareholdingAssociationYUASA TRADING GroupCollaborateShared foundationCollaborateForm dataGatherGatherTANKYOKAImanufacturersElectronic transactions/EC¥8.0 billionFY2024/3 to FY2026/3¥12.0 billionFY2021/3 to FY2026/3Driving Force2.1011Integrated Report 2021Integrated Report 2021Two Driving Forces Connecting Us to the FutureChapter• Sales partners Approx. 20,000 companies• Suppliers Approx. 6,000 companies• Yamazumi Shareholding Association member companies Approx. 3,000 companies• TANKYOKAI member companies Approx. 500 companiesStrong relationship with sales partners and suppliers(Social/affiliate capital)• Fair, true, and transparent transactions (compliance)• Develop professional human resources with enterprise spirit• Develop personnel and organizations that respect the individuality and human rights of employees• Number of employees at consolidated companies Approx. 2,500Foster corporate culture that takes on challenges(Human capital)• Industry-leading business area coverage• Business management based on twin engines of treading business and solutions business• Expand engineering functions• Strengthen trade business foundation (EC functions, logistics functions)• Solutions sales know-how• Group companies skilled in specialty areasResolve social issues through business(Intellectual capital/natural resources)• Domestic sites 31 sites• Overseas sites 27 sites• Group companies in Japan 27 companies• Group companies overseas 14 companies in 10 countriesRich network in and outside Japan(Network capital)Social valueBusiness partner value• Provide coordination function through “Integrated Product-Service”• Provide engineering function• Provide information and logistics platform• Provide diverse group functionShareholder value• Profit • ROE • Shareholder return ratioEmployee value• Percentage of taking paid leave• Average hours of laborEnvironmental, social value• Total expenditure amount for social contributions• Amount contributing to greenhouse gas reductionEconomic valueNet sales¥432.1 billionOperating profit¥8.9 billionOPM2.1%Ordinary profit¥10.0 billionOrdinary profit to net sales ratio2.3%Profit attributable to owners of parent¥6.9 billionROE8.1%Shareholder return ratio31.9%* Results of the fiscal year ended March 31, 2021ManufacturingHome buildingEnvironment buildingTown buildingAutomationLabor-saving, power-saving, cost reductionEnvironmental measuresSharingComfortable lifestyleBCP, disaster prevention/mitigationSecurity measuresQuality controlHealth careSocial needsSocial issuesStrengths developed through “TSUNAGU”Value generated through “TSUNAGU”Respond to social issues through innovation for a sustainable societyValue Creation Process“TSUNAGU” value to the futureRealize a sustainable society• Equity ratio 37.7%• Net debt to equity ratio -0.43 times• Basic earnings per share ¥313.03Stable financial foundation(Financial capital)* Results of the fiscal year ended March 31, 2021TSUNAGUShift From “Single Item Business” to “Integrated Product-Service” through the comprehensive capabilities of the GroupIntegrated Business ModelHonesty and TrustRegard for the IndividualEnterprise and InnovationCorporate PhilosophyGovernanceP48SocietyP42EnvironmentP40Promotion of Sustainability ManagementSuppliersApprox. 6,000 companies(TANKYOKAI approx. 500 companies)“TSUNAGU” growth strategy and business activitiesMedium- to long-term visionYUASA VISION 360Business activitiesSales partnersApprox. 20,000 companies(Yamazumi Shareholding Association approx. 3,000 companies)13Integrated Report 202112Integrated Report 2021Strategy Connecting Us to the FutureChapterFinancial StrategyWe will strengthen our financial foundation by improving financial liquidity, profitability, and fiscal health as a “TSUNAGU” Service Integrated Shosha Group that contributes to society through manufacturing, home building, environment building, and town building.Based on the “Growing Together 2023” Mid-term Management Plan,” we will strategically develop new markets, new products, and new businesses by promoting investments in Growth businesses centered around deepening of the Core businesses.Basic philosophy toward financial strategiesWe will strengthen our financial foundation by improving financial liquidity, profitability, and fiscal health. We will also secure capital for growth through M&A and business investments.For capital liquidity, our basic policy is to apply short-term borrowings and own fund for the capital demand of working capital and capital expenditures. We aim to enhance the capital management structure and improve capital efficiency on a consolidated base by Group financing that utilizes cash management systems in the Group.We will maintain financial health while making growth investments. We aim to expand earnings per share and increase corporate value by investing profits generated through business activities in growth fields.Investment and capital policyIn the Growing Together 2020 Mid-term Management Plan, as initially planned, the ratio of investments, return to shareholders, and funds for the future investments were around one-third each.In Growing Together 2023, the ratio of investments is to be increased to ¥17.0 billion, or 57%, while the shareholder return ratio is maintained at least 33%.In the plan through 2026, investments would be 50% while the shareholder return ratio is maintained at least 33% as described below.Funds for the future investments¥9.4 billionNet assets per shareFY17/3 results: ¥2,910⇒FY20/3 results: ¥3,635Funds for the future investmentsInvestment funds to respond quickly and flexibly to the changes of the future business environmentReturn to shareholders(dividends)¥8.8 billionFY18/3 dividend amount: ¥2.4 billionFY19/3 dividend amount: ¥3.1 billionFY20/3 dividend amount: ¥3.3 billionShareholder return ratio33% or moreAim to increase DOE (dividends on equity), including purchase of treasury sharesInvestments¥8.2 billion• M&A related• Capital expenditures for systems, etc.• Human resource development/development of new businessesInvestments¥17.0 billion• M&A, business succession• New businesses• IT digital investmentsShareholder return ratio33% or moreAim to increase DOE (dividends on equity), including purchase of treasury shares6-year total investments¥35.0 billionM&A, new businesses ¥23.0 billionIT digital investments ¥12.0 billion[Growing Together 2020]FY2018-FY2020 (3-year) profit (¥26.1 billion) distribution results[Targets of Growing Together 2023]FY2021-FY2023 (3-year) profit (¥30.0 billion) distribution plan[Growing Together 2023-2026]FY2021-FY2026 (6-year) profit (¥70.0 billion) distribution plan50%57%31%35%33%34%10%33%17%Growth Matrix in YUASA VISION 360 and Growing Together 2023Image of growth matrixWe are investing ¥4.0 billion into the Overseas Business and Robot (AI) & IoT Business and ¥5.0 billion into other Growth businesses and the Core businesses by fiscal year ending March 31, 2023.Growth business nameInvestments (3 years)Results (1 year)Investment detailsRemaining investments (2 years)Overseas Business¥4.0 billion——¥4.0 billionRobot (AI) & IoT Business¥4.0 billion¥1.7 billionBusiness and capital alliances with AI ventures, etc.¥2.3 billionEco & Energy Solution BusinessTotal ¥5.0 billion* Existing Core business investments included——Total ¥1.5 billion* Core business investments includedNew Distribution Business¥100 millionEC site Growing Navi function development, etc.Resilience & Security Business——Agriculture Process Business¥100 millionInvestments in agriculture robot companies, etc.Long-term Care & Medical Business——Food Equipment Business——Sharing Business——Core businesses¥3.3 billionM&A to strengthen functions, etc.IT digital investments¥4.0 billion¥500 millionMake information-related company a subsidiary, promote DX project, etc.¥3.5 billionTotal¥17.0 billion¥5.7 billion¥11.3 billionWe have set a total of ¥17 billion in growth investments for Growing Together 2023. In the first year, fiscal year ended March 31, 2021, we have invested ¥5.7 billion. In the future, we will accelerate investments for the Overseas Business and digital transformation that will lead to further growth.Growth investments* Values in parentheses are sales targets for the fiscal year ending March 31, 2023Growth marketExisting marketExisting productGrowth productProductMarketResilience & Security Business(¥24.0 billion)Eco & Energy Solution Business(¥25.0 billion)Robot (AI) & IoT Business(¥17.0 billion)Agriculture Process Business(¥5.0 billion)New Distribution Business(¥19.0 billion)Long-term Care & Medical Business(¥8.0 billion)Overseas Business(¥74.0 billion)Sharing Business(¥5.0 billion)Food Equipment Business(¥8.0 billion)Growth businesses and Core businesses(besides Overseas, Robot (AI) & IoT Business)Core businessesBuilding Supplies & ExteriorConstruction MachinesEnergy, Consumer Products & TimberMachine ToolsIndustrial Equipment & ToolsHousing, Air & Fluidic Control SystemsInvestments¥4.0 billionInvestments¥4.0 billionFY 2021 results¥1.7 billionInvestments¥5.0 billion1415Integrated Report 2021Integrated Report 2021Strategy Connecting Us to the FutureChapterPromote the Core businesses and the Growth businesses through integrated network connecting sales partner group called “Yamazumi Shareholding Association,” supplier group called “TANKYOKAI,” and the “YUASA TRADING Group.”2013/32012/32014/32015/32016/32017/3YUASA VISION 3601st stageNet sales: ■Core businesses ■Overseas ■Robotics (AI) & IoT ■Eco & Energy Solutions ■New Distribution ■Resilience & Security ■Agriculture Process ■Long-term Care & Medical ● Ordinary profit396.7432.1(billions of yen)6.72018/32019/32020/32021/310.00100.0200.0300.0400.0500.003.06.09.012.015.0(billions of yen)Sales and ordinary profit in past 10 yearsOverseas BusinessProvides new products and functions in the Southeast Asia and North America areas.Sales network stretching across Japan and overseasTop number of suppliers in the industrySales partnersSuppliersApprox. 20,000 companiesApprox. 6,000 companiesSales partner groupYamazumi Shareholding AssociationApprox. 3,000 companiesSupplier group TANKYOKAI Approx. 500 companiesCurrent YUASA TRADING GroupIndustrial Equipment & Tools DivisionSupports “manufacturing” through our proprietary nationwide IT & logistics network.¥61.5 billionMachine Tools DivisionSupports global “manufacturing” by adding proprietary engineering functions to the machinery and equipment of top manufacturers in Japan.¥82.7 billionHousing, Air & Fluidic Control Systems DivisionRealizes smart society through proprietary eco-engineering.¥158.9 billionBuilding Supplies & Exterior DivisionSupports construction materials for buildings and apartments from estimates to actual construction in order to create pleasant, strong, and flexible urban spaces.¥56.6 billion¥36.1 billion Construction Machines DivisionProvides industrial machines and resources required for road paving and civil engineering while also proposing cutting-edge industrial rental products the times seek.¥15.5 billionEnergy DivisionRealizes stable provision of energy fitting smart technology, BCP, and low carbon society.¥20.6 billionOther (Consumer Products & Timber)Proposes new industry and lifestyle shapes that fit diversifying lifestyles and industries.Core businesses (Net sales for the fiscal year ended March 31, 2021)Growth Businesses (Net sales for the fiscal year ended March 31, 2021)¥22.0 billionNew Distribution BusinessStrengthened information transmission utilizing IT and expanded electronic trading business with sales partners.¥13.8 billionResilience & Security BusinessProposes town-building of the future with disaster prevention, disaster mitigation, and BCP as our keywords.¥28.3 billionAgriculture Process BusinessProposes efficient agriculture and methods to reduce the burden on farmers.¥1.9 billionLong-term Care & Medical BusinessOffers a comfortable lifestyle by proposing equipment and systems that support improved environments for aging society.¥6.8 billionRobot (AI) & IoT BusinessStrengthened system integration functions and deploys solutions operations through robotics (AI) & IoT in each field.¥7.4 billionEco & Energy Solution BusinessPromotes sales business in and outside Japan for equipment and systems that contribute to the environment.¥21.3 billion31 sites in Japan/27 sites in 10 countries overseas27 group companies in Japan/14 group companies overseas1617Integrated Report 2021Integrated Report 2021Strategy Connecting Us to the FutureChapter1Overseas BusinessOverseas Networkin North Americain AsiaGroup companies11 companies, 20 sitesChina, Taiwan, Thailand, Malaysia, Indonesia, Philippines, Vietnam, IndiaGroup companies2 companies, 5 sitesU.S. and Mexico(as of March 31, 2021)14 companies27 sites10 countriesYUASA-YI, INC. (U.S.)YUASA SHOJI MEXICO.S.A.DE C.V. (Mexico)YUASA TRADING (SHANGHAI) CO.,LTD (China)YUASA TRADING (TAIWAN) CO., LTD. (Taiwan)YUASA TRADING INDIA PRIVATE LIMITED (India)YUASA TRADING (PHILIPPINES) INC. (Philippines)YUASA TRADING (THAILAND) CO., LTD. (Thailand)Connecting the World and JapanConcentrates Group business resources on North America, Southern Asia, and Eastern Asia regions.ThailandTop area of focus020.040.060.080.02023/32021/32020/32019/3(billions of yen)■ Plan ■ Results49.555.060.922.074.041.536.4Significant decline in income for the fiscal year ended March 31, 2021 due to suspending operations at local companies and travel restrictions for Japanese staff due to COIVD-19YUASA SHANGHAI held its first exhibit at CME (China Machine Tool Exhibition) held in Shanghai in July 2020. As the number of COVID-19 infections had fallen in China, there were 1,300 exhibiting companies and around 120,000 visitors, making it a very lively event.Many visitors from a wide range of fields visited the booth, where the company was able to conduct public relations and work with representatives from assorted manufacturers. Employees came together to engage in sales activities, such as visiting customers that showed interest.First exhibit for YUASA SHANGHAI at CME (China Machine Tool Exhibition)¥4.0 billionInvestmentsTrained local sales staff and expanded sales to local capital companies (target: 50% of sales)Industrial MarketExpanded sales of energy-saving and generating products in Thailand and VietnamLiving Environment Market[Construction Materials] Strengthened overseas construction business (imports/exports)[Construction Machines] Expanded exports of used construction and agriculture machinesConstruction MarketProgress of Growing Together 2023¥22.0 billion¥74.0 billionNet sales(2021 results)(2023 plan)Growth StrategyWe are promoting design, installation, and sales of solar power generation systems in Thailand.YUASA TRADING VIETNAM CO., LTD. (Vietnam) PT.YUASA SHOJI INDONESIA (Indonesia)YUASA ENGINEERING SOLUTION (THAILAND) CO.,LTD. (Thailand)In September 2016, YUASA ENGINEERING SOLUTION (THAILAND) CO., LTD. was established in Thailand. This company operates an energy solutions business that handles everything from proposing renovations of existing equipment to solar power generation systems design and construction in Southeast Asian countries, utilizing the strengths in energy generation and saving know-how developed in Japan.Contributing to activities to improve the environment in Southeast Asia YUASA ENGINEERING SOLUTION (THAILAND) CO.,LTD.YUASA MECHATRONICS (M) SDN.BHD. (Malaysia)Brings products and solutions developed in Japan to overseas markets and provides new value.1819Integrated Report 2021Integrated Report 2021Strategy Connecting Us to the Future ― Growth StrategyChapterChapterStrategy Connecting Us to the Future ― Growth Strategy2Connecting Technology and PeopleRobot (AI) & IoT BusinessHeading toward realizing a society that “connects” everything, we will introduce cutting-edge AI/IoT and robot technology and aim to grow with our customers.Growth StrategyBusiness IntroductionWe developed the robot system “Robo Combo” series that realize automation easily at a low priceDevelopment backgroundIn recent years, labor shortages due to lower birthrates and an aging society, workstyle reforms, and the COVID-19 pandemic have suddenly increased the needs for automation that utilizes industrial robots in manufacturing sites. However, in reality, the desire to introduce these systems has halved as automation systems significantly surpass the price of the manufacturing equipment itself. This is one of the impediments for increasing production efficiency at manufacturing sites. Another significant issue is that introduction of automated equipment limits the equipment available to use.Investments¥4.0 billionProgress of Growing Together 2023Address issues with Robo ComboExtract workpiece (product) from the stockerSet in the cutting machineAfter machining, return to the stockerAutomate repetitive workImprove operational efficiencyImprove productivityBefore introduction (manual work)After introduction(manual work not required)(1) Extract workpiece (product) (2) Attach workpiece to the jig and (3) Return completed from the stockermachine with machine toolsworkpiece to the stockerRobo Combo product characteristicsone-touch position setting function• Realize low price by minimizing functions• Can be sold by unit (robot portion, stocker portion)• Easily realize unit transportation/re-installation through • Supports various automation levels by selecting stocker grade• Customizable by selecting options• Can be installed on existing equipmentRobo Combo MI Ver 1Image of opened robot unitWe are supporting automation for our customers by reducing the cost burden through the promotion of our product “Robo Combo.”We aim to develop the entire network of Net salesbusiness partners through proposing cutting-edge AI/IoT and robot technology.Investment targetsAlliances with AI venture companies and SIersInvestment to strengthen SIer function¥7.4 billion(2021 results)¥17.0 billion(2023 plan)(billions of yen) ■ Plan ■ Results17.0Industrial MarketDevelop and propose automation system “Robo Combo”Living Environment MarketDevelop and propose machinery suited to Society 5.05.84.03.28.36.57.6 7.4Construction MarketDevelop and propose public exterior-related IoT products2019/32020/32021/32023/3Promote spread of cooperative robotsIn order to solve issues in labor shortages and cost reduction, we are focusing on proposing labor-saving improvements that supports worker picking at logistics warehouses as well as automation of factory logistics by transportation between factory processes without people.As one example, along with Doog Inc., we used the cooperative transportation robot “THOUZER BASIC” for autonomous transport of heavy items and carrying of items to destinations by automatic tracking. We conducted testing to implement these systems in stations and commercial facilities in the future.Proposed AI systems that solve issues in constructionWe develop AI systems that detect the degree of damage and volume of materials in construction sites in order to solve social issues such as workstyle reforms and labor-saving.We will focus on proposing and developing AI systems that can contribute to labor-saving and fatigue reduction among workers.18.016.014.012.010.08.06.02.00Testing robot at Takanawa Gateway Station (Yamanote Line) (Provided by East Japan Railway Company)Exhibit proposing the resource quantity counting system that utilizes AI(YUASA Growing Fair)20Integrated Report 2021Integrated Report 202121ChapterStrategy Connecting Us to the Future ― Growth Strategy3Connecting the Future and Smart EnergyEco & Energy Solution BusinessWe will contribute to the realization of a decarbonized society by utilizing our know-how in environment solutions amassed until now.Growth StrategyTotal support for company ESG managementExample of initiative to achieve carbon neutrality (zero actual emissions)Countries and companies have begun initiatives in earnest to achieve carbon neutrality. The Japanese government has announced a target of reducing CO2 emissions by 46% by the fiscal year 2030 and achieving complete carbon neutrality by fiscal 2050. As a result, companies have seen that CO2 reduction initiatives such as maximizing use of renewable energy and implementing energy-saving solutions directly link with company value as they aim for carbon neutrality, a goal in the E (Environment) portion of ESGs.We are providing optimized services at a one-stop-shop based on the environment solutions know-how we have amassed until now.One-stop solutions related to introduction of renewable energy/energy-saving equipmentWe have prepared a system to provide one-stop solutions through the wide-ranging know-how and advanced proposal capabilities unique to a trading company in order to address the issues of CO2 reduction by introducing renewable energy/energy-saving equipment.Consulting related to renewable energy, energy-saving, and CO2 reductionProvide one-stop solutions, including site surveying, equipment selection, quotes, proposals, installation, maintenance, and inspectionNikkei Sangyo Shimbun ForumYUASA TRADING presented for “Self-generated solar power and storage systems”At the Nikkei Sangyo Shimbun Forum held in August, 2021, our Senior Executive Officer and General Manager of Living Environment Division (Eastern Area) Hirose presented for “Self-generated solar power and storage systems learning from introduction examples,” which introduced the energy storage, generation, and saving solutions of YUASA TRADING. During the session, in addition to providing examples of introducing self-generated solar power and storage systems, he explained the process of realizing ESG management.We achieve carbon neutrality through a combination of introducing renewable energy/energy-saving equipment, shifting to renewable energy, and carbon off-sets.CurrentPurchased energy CO2 emissions volume: 100%Purchased energy CO2 emissions factor: 0.5 kg-CO2/kWhFuel used to generate purchased energy, including natural gas, oil, and coal, all emit CO2.Renewable energyConsumption of self-generated solar power40% reductionPurchased energy CO2 emissions volume60%Reduce purchased energy through renewable energyReduce purchased electricity and CO2 emissions by consuming electricity generated by solar power on site with no CO2 emissions.Example of introducing solar power generation systems(Food manufacturing business)Equipment capacity: Cost of introduction: Power generated: CO2 reduction volume: 150 kW¥25 million 165,000 kWh/year61 t-CO2/yearAmount of energy cost reduction: Amount of reduction in renewable energy generation promotion levy: Years until costs recovered: ¥2.4 million/year¥480,000/year8.8 yearsEnergy-savingConsumption of self-generated solar power40% reductionUpgrading energy-saving equipment30% reductionPurchased energy 30%Reduce purchased energy through energy-savingReduce purchased electricity and CO2 emissions by energy-saving, such as making operations improvements and updating to more efficient equipment.Example of upgrading energy-saving equipment(Plastic product manufacturing)Upgrade costs: Subsidies acquired: Energy reduction volume: CO2 reduction volume: ¥65 million¥15 million 260,000 kWh/year82 t-CO2/yearAmount of energy cost reduction: ¥3.85 million/yearAmount of reduction in renewable energy generation promotion levy: ¥780,000/yearYears until costs recovered: 10.8 yearsRenewable energyConsumption of self-generated solar power40% reductionUpgrading energy-saving equipment30% reductionSwitching to renewable energy30% reductionRenewable energy CO2 emissions factor: 0.0 kg-CO2/kWhPower originating from renewable energy (zero CO2). Reduce CO2 emissions by purchasing power with no net CO2 emissions as offset by non-fossil certificates (credits), etc.High performance air conditioning equipmentLED lighting equipmentNet salesAchieve carbon neutrality!(billions of yen) ■ Plan ■ ResultsTargetPurchased energy CO2 emissions volume: 0%Introduction exampleSupported Kanazu Murata Manufacturing (Murata Manufacturing Group) create factories that use 100% renewable energyAs the contracting construction company, we delivered a 638 kW solar power generation system for Kanazu Murata Manufacturing Co., Ltd. (Awara City, Fukui Prefecture) from the Murata Manufacturing Group to create a factory wholly powered by renewable energy. From November 2021, all of the energy used at this factory is from renewable sources.Reduce the supply burden of power systems by combining storage batteries and energy management systems.We work towards the efficient use of energy and securing of resilient lifeline utilities as we aim to realize a decarbonized society that utilizes renewable energy.Progress of Growing Together 2023Promote energy-saving solution proposals across the entire company centered around YES (YUASA Environment Solution) Divisioninstructors across divisionsand uses from household to industrial usage• Storage battery lineup aligned with needs • Continuous training of environment • Proposing solutions that combine solar power • Promote cyclical business using O&M• Respond to shift from ownership model to generation, storage batteries, and V2Henergy services contract model (establish PPA model)¥21.3 billion(2021 results)¥25.0 billion(2023 plan)21.921.925.021.320.021.519.330.025.020.015.010.05.002019/32020/32021/32023/322Integrated Report 2021Integrated Report 202123ChapterStrategy Connecting Us to the Future ― Growth Strategy4Connecting Information Platforms with Business PartnersNew Distribution BusinessStrengthening information transmission functions utilizing IT to expand our electronic trading business (Growing Navi) with business partners.Growth StrategyBusiness IntroductionOperating B-to-B-to-U Growing Navi that users can also useExpand the e-commerce business Net salescompany-wide and connect the Company with sales partners and users by operating a B-to-B-to-U (User) ordering system.Progress of Growing Together 2023(FY2021/3 results ¥5.0 billion → FY2023/3 plan ¥10.0 billion)• Increase order amount for Growing Navi • Deploy B-to-B-to-U platform that ties together sales partners • Promote providing products at one-stop-shop through New Distribution Business Divisionand users (from 2021)¥13.8 billion(2021 results)¥19.0 billion(2023 plan)(billions of yen) ■ Plan ■ Results20.019.016.012.011.711.313.612.715.213.88.04.002019/32020/32021/32023/3New function Growing Navi: B to B to U“Growing Navi” can now be used as ● Concept of Growing Navi B to B to UFrom May 2018, YUASA TRADING has operated a B-to-B site called “Growing Navi” that connected sales partners with the Company. From this fiscal year, we have been operating a B-to-B-to-U system that connects sales partners (B) with users (U).This system is an e-commerce platform that accepts orders through sales partners. We are promoting this as a digital sales tool for the COVID-19 era when visits to users are limited.one’s own EC site.We support the improved operational efficiency of sales partners.Can be used as digital sales tools in the COVID-19 and post-COVID eraCan use immediately without building one’s own e-commerce!Can list inventory and price informationIn addition to publicizing inventory information, this service can reduce inventory status and price inquiry operations!Simple set up to be usable from the next dayFree to use. You can use with minimal user registration and price registration!Approx. 550 companies2.5 million itemsSuppliersThe Company (B)Sales partners (B)Sales of Growing NaviApprox. 2,000 companies(Sales partners with IDs)Users (U)Company ACompany BCompany C…On the customer’s computer, smartphone, or tablet10.0(billions of yen)10.0Registration in 3 simple steps1. Register company information2. Create a management code and issue password3. Register sales priceSales prices can be displayed to users.4.75.04.18.06.04.02.00Inventory information can be displayed to sales partners.* Inventory registration is required to display stock amount.2019/32020/32021/32023/3Plan24Integrated Report 2021Integrated Report 202125ChapterStrategy Connecting Us to the Future ― Growth Strategy5Connecting Security Technology and BCP Know-HowNatural disasters and pandemics are growing more severe.In order to maintain safety and security while continuing business, we are connecting security technology and BCP know-how.Business IntroductionDeveloped aluminum privacy fence Yachibei® used for improving concrete walls―Prevents collapse damage in the event of an earthquake and contributes to resilient town development―Since the incident of block walls collapsing during the 2018 Northern Osaka Prefecture Earthquake, renovation of block walls across Japan has made some progress. However, many old block walls still remain as the cost of renovation is an obstacle. In order to address this issue, YUASA TRADING and our business partners developed an aluminum privacy fence Yachibei® used for improving concrete walls that mitigates the damage of walls collapsing due to earthquakes.Customers can use the existing pillars of concrete fencing and replace the heavy concrete panels with the light aluminum panels of Yachibei® in order to reduce costs, shrink construction times, and limit industrial waste emissions.Characteristics of Yachibei®Use pillars as is; does not require foundational construction● Mitigate the damage of collapsing due to earthquakes by lightweight aluminum panels (Reduces weight by approximately 85%)● By reusing the existing pillars:(1) Reduce reinforcement costs (reducing costs by approximately 35%)(2) Shorten construction time(3) Environment-friendly product that limits emissions of industrial waste● Improves design with pillar covers and top railsResilience & Security BusinessGrowth StrategyWith “disaster prevention, disaster mitigation, Net salesand BCP” as our keywords, we promote safe and secure “industry” and “town-building.”Progress of Growing Together 2023Made the Resilience & Security Office a company-wide division, further improved proposal capabilities.(power generator, storage battery, uninterruptible power supply system, etc.)• Strengthened proposals toward securing power in various fields • Devel