MEIJI Holdings Co.,Ltd.

Abandonment of planned product launches, changes in customers' lifestyles and values, or negative rumors regarding key raw materials such as milk and cacao could have a material impact on sales and profit. This is positioned as the highest priority risk (◎) within the Group, and is addressed through reliable acquisition of POC (proof of concept), proactive gathering of market trend information, and creation of products that solve social issues.

If sales of specific products accounting for a high proportion of sales and profit underperform, there is a risk of severe impact on the Group's overall business performance. This risk is rated as the highest priority (◎), and diversification is being pursued through marketing measures that maximize unique value, enhanced product portfolio management, and exploration of new markets and new business areas.

Shortages, surpluses, or price surges in raw material procurement, suspension of production activities due to production troubles, increasing difficulty in procuring raw milk, and instability in product supply caused by logistics issues could affect business continuity. This is positioned as the highest priority risk (◎), and is addressed through diversification of procurement sources, consideration of alternative raw materials, strengthened coordination between production and sales departments, and improved logistics efficiency through labor-saving and unmanned operations.

Insufficient adaptation to the rapid advancement of digital technology, or the emergence of groundbreaking treatments, manufacturing methods, or formulations, could reduce competitive advantage. This risk is rated as the highest priority (◎), was selected as a key focus theme for FY2025, and is addressed through organization-wide AI utilization and the promotion of data-driven management.

Failure to achieve the vision or medium-term management plan due to changes in the environment, slowdown in core business growth, impairment of fixed assets or goodwill, and fluctuations in foreign exchange rates or interest rates could have a material impact on financial position and business results. This is positioned as the highest priority risk (◎), and is addressed through thorough business portfolio management, appropriate decision-making and monitoring of M&A and R&D plans, and the use of foreign exchange forward contracts and fixed-rate borrowings.

Sudden changes in social conditions, outbreaks of war or terrorism, and regulatory changes in foreign countries that far exceed expectations could have a material impact on the business activities of overseas group companies. This risk is rated as the highest priority (◎), and is addressed through information gathering, early consideration and implementation of countermeasures, and building a product supply system from multiple locations.

Product recalls due to quality defects or unexpected side effects of pharmaceuticals, or unexpected reputational damage to the Group or its products, could significantly undermine trust in the Meiji brand and seriously affect business performance. This is positioned as the highest priority risk (◎), and is addressed through thorough pursuit of safety and peace of mind, and appropriate communication with stakeholders.

Information leakage due to unauthorized access, suspension of system functions, or information leaks resulting from inadequate management systems could have a material impact on corporate activities; risk awareness of this has increased compared to the previous year (↗). This risk is rated as the highest priority (◎), and is addressed through strengthening information management systems and information security, enhancing information management education, and thoroughly enforcing various rules and policies.

Revisions to various systems that significantly affect corporate activities, or drug price revisions, could affect earnings, particularly in the pharmaceutical segment. This is addressed through early acquisition of information on regulatory changes and implementation of countermeasures, appropriate engagement with government authorities, and enhancement of a product portfolio not subject to drug price revisions.

Insufficient acquisition and development of the human capital necessary for corporate growth, declining employee engagement, and impacts on productivity due to the work environment could affect medium- to long-term competitiveness. This is addressed through operation of a management talent pool linked to succession planning, enhancement of employee training, various measures based on employee engagement survey results, and promotion of smart work and health-oriented management.