EXEO Group, Inc.

The occurrence of large-scale disasters or infectious disease pandemics may cause lifeline disruptions and shortages of fuel, materials, and personnel, potentially leading to construction work suspension/delays and damage to business sites and equipment/materials. The Group works to avoid risk and minimize damage centered on the Crisis Management Office (established April 2020) through training implementation, regulation development, telework system introduction, and workplace vaccination programs, among other measures.

In handling important information such as customers' technical data and personal information, if information leakage or system outages occur due to malware infection or sophisticated cyberattacks, this could lead to a decline in customer trust and liability for damages, affecting business performance. In January 2025, the Company established the Cybersecurity Management Department to build a centralized monitoring and operations framework through EXEO-SIRT, and conducts e-learning and targeted phishing email drills for all employees.

Overall procurement costs may increase due to a combination of heightened geopolitical risk, tightened export regulations, rising energy prices, logistics costs and labor costs, and exchange rate fluctuations, potentially necessitating construction period extensions or revisions to construction plans. Supply constraints for some materials, including semiconductors, may also continue, and the Company is taking measures such as early ordering, securing diverse procurement sources, passing costs through to construction prices, and adjusting construction schedules.

If legal regulations such as the Construction Business Act, the Antimonopoly Act, and the Industrial Safety and Health Act are revised or abolished, or if employee misconduct, harassment, human rights violations in the supply chain, or personal information leakage occur, this could result in loss of social credibility and adversely affect business performance and corporate reputation. In addition to annual compliance status inspections, tiered compliance training, and development of an internal whistleblowing system, the Company established the "Basic Procurement Policy" and "Procurement Guidelines" in 2024, aiming to extend these throughout the supply chain.

While operating across 19 locations and more than 150 countries, business operations may be affected by market trends, changes in laws and regulations, changes in tax systems, difficulty securing personnel, and natural disasters in each country of operation, potentially hindering business expansion in the global field. EXEO GLOBAL, established in Singapore as the overseas management company, has Japanese officers and employees stationed locally, and the Company works to reduce risk through strengthened governance, establishment of a global whistleblowing hotline, and utilization of external experts.

The occurrence of unforeseen major personal injury or equipment accidents could lead to a decline in customer trust, liability for damages, and reduced order opportunities, affecting business performance. The Company prioritizes fundamental countermeasures for hazardous work (elimination/reduction at the planning stage) and promotes safety equipment checks utilizing AI and DX, monitoring via network cameras, hazard prediction training, and the "STOP & LOOK + Report" initiative.

If it becomes difficult to secure sufficient human resources due to the declining birthrate, aging of engineers, and intensifying competition in the recruitment market, this could lead to declining competitiveness, lower morale, and adverse effects on business operations. The Company is working to secure and retain human resources in both quantity and quality through a dual approach of new graduate and career hiring, recruitment of highly skilled personnel domestically and overseas, introduction of flexible work styles, review of compensation systems, and promotion of collaborative development with partner companies.

If the expected investment effects from M&A are not achieved, or if risks specific to new business areas materialize, impairment losses on goodwill may occur, affecting business performance. The Company works to reduce impairment risk through due diligence by external lawyers and financial advisors, investment decisions using the Company's WACC as a hurdle rate, and the establishment of a post-PMI monitoring framework.

The high proportion of transactions with telecom carriers means that market fluctuations in the information and communications industry and changes in capital investment behavior due to technological innovation directly affect business performance. As of the end of FY2025, the revenue ratio was roughly divided evenly among the Telecom Carriers, Urban Infrastructure, and System Solutions segments, but dependence on Telecom Carriers remains high in terms of profit; under the "Medium-Term Management Plan (2026-2030)," the Company aims to achieve growth such that each segment contributes similarly in terms of profit as well by FY2030.

There exist both transition risk—decline in corporate value and loss of order opportunities due to delayed response to the decarbonization transition—and physical risk—damage to construction sites, increased heatstroke risk, and increased countermeasure costs due to more severe weather events. The Company obtained SBTi certification in July 2024 and is addressing these risks through the promotion of substantially renewable electricity usage, expansion of renewable energy-related businesses, and strengthening of BCP response capabilities.