FUJI MEDIA HOLDINGS, INC.

In the previous fiscal year, a human rights and compliance issue actually materialized at Fuji Television, resulting in a significant decline in advertising revenue and causing a decrease in consolidated earnings. If a serious human rights violation or legal violation occurs, it could damage social credibility, lead to advertisers withdrawing, and have a material impact on business performance. In response, a Group Human Rights Committee was established in May 2025, and a Risk Policy Committee was established in July of the same year, building a cross-group oversight structure.

Much of the broadcasting business's revenue consists of advertising revenue from the sale of commercial airtime, and if domestic total advertising expenditure declines due to economic downturn, large-scale disasters, the spread of infectious diseases, etc., this will negatively impact business performance. Declining viewership ratings also directly affect commercial airtime sales prices, making this a compound risk factor. In response, the company aims to expand its business scope through diversified business development and move away from excessive dependence on advertising revenue.

The dramatic expansion of internet video streaming, music streaming, and video advertising has accelerated the diversification and fragmentation of how consumers access content, creating risks of reduced exposure time to existing media and declining media value. The company plans to fundamentally reform Fuji Television from a media company centered on terrestrial advertising revenue into a "Content Company," transitioning to a business structure that captures diverse revenue opportunities such as streaming/digital business and film. The company will also accelerate the development and acquisition of content IP and expansion into overseas markets.

The company has been certified by the Minister of Internal Affairs and Communications as a certified broadcasting holding company under the Broadcast Act, and the group's core broadcasting business operates under broadcasting licenses or certifications based on the Broadcast Act and the Radio Act. If the company fails to meet legal requirements or violates laws, resulting in revocation of certification/license or failure to obtain re-licensing, this could have a material negative impact on group performance. The company is strengthening its monitoring and checking system for requirements and certification conditions, and conducting regular compliance audits by the internal audit department.

The building business, asset development business, and housing business are linked to domestic real estate market conditions, and during economic downturns, vacancies may occur along with declines in rent levels and sales prices. In the tourism business, there is also a risk of decreased customer numbers due to reduced travel and tourism demand, including inbound demand, or changes in the international situation. The company controls this risk by diversifying held-asset risk through the use of REITs under a certain degree of financial discipline, and by reviewing held assets through asset development and sales.

The company has begun considering the introduction of external capital into the urban development and tourism business centered on Sankei Building Co., Ltd., and depending on the final form of such introduction, the degree of impact this business has on consolidated performance could fluctuate significantly. The timing of implementation is currently undetermined, and specific considerations are ongoing. While the company aims to realize this measure promptly, uncertainty remains.

While the company plans to continue appropriate capital expenditure and investment for sustainable growth, there is a possibility that sufficient profit commensurate with the investment amount may not be secured. For large-scale capital contributions and investment projects, multiple checking mechanisms have been established, including deliberation at the Management Committee and resolution by the Board of Directors. A system has been established in which meeting bodies comprising specialized departments and dedicated departments conduct examinations from a specialized perspective.

If a large-scale disaster causes failures in broadcasting equipment or broadcasting facilities, or if it results in the cancellation of events or film screenings, damage to product procurement and distribution in the mail order sales business, or damage to held assets in the urban development and tourism business, this will negatively impact business performance. While the company has backup broadcasting equipment and alternative systems in place, there is a risk of long-term suspension of broadcasting if a natural disaster occurs that existing measures cannot handle. Safety confirmation drills and BCP drills are conducted regularly several times a year.

If databases containing viewer information, program cast information, mail order sales customer information, etc. are accessed illegally from outside or if personal information is leaked externally, this will negatively impact business performance and social credibility. In November 2024, the group formulated its "Basic Policy on Information Security" and is working to strengthen security, including setting internal access permissions.

Amid intensifying competition to acquire talent with the skills to respond to the rapid changes surrounding each business, if the company is unable to acquire necessary talent or if excellent talent leaves, this could adversely affect business performance. Under "Group Vision 2026-2030 Ver.1.0," the company has set a policy of making cumulative human capital investments of approximately ¥15 billion by fiscal year 2030, centered on acquiring and developing core talent in each area of the IP value chain. The company is also focusing on actively recruiting external talent, promoting reskilling, and promoting health-oriented management.