YAMAU HOLDINGS CO., LTD.

As the proportion of sales related to public works projects is high, there is a seasonal bias with sales concentrated in the second half compared to the first half. If this seasonal fluctuation expands further, it could have a certain degree of impact on first-half performance. The Company is working to level out performance by expanding its share in the private sector.

The Group is highly dependent on public works projects, and fluctuations in the scale of construction investment and priority investment areas by national and local governments directly affect performance. The Group continuously monitors future demand trends and responds through appropriate allocation of management resources such as personnel and equipment, as well as expanding transactions in the private sector.

The Kyushu region, the Company's main market, is under an oversupply structure, and excessive competition could lead to a decline in order volume and a drop in selling prices, thereby squeezing profitability. The Company strives to strengthen its competitiveness by enhancing its technological and development capabilities and reducing costs through the establishment of an efficient production system.

In the construction business and the manufacturing & sales business, prices of various materials, including energy prices and raw materials, are susceptible to unstable external factors, and price surges could squeeze profitability. The Company works to minimize the impact by securing appropriate procurement prices through coordination between the purchasing and manufacturing departments, and by promptly passing on cost increases to selling prices.

If unexpected bad debts occur with business partners, this could have a certain degree of impact on profit and loss. The Company strives to avoid credit risk through daily collection of credit information, strengthening internal review processes, and enhancing credit management such as case-by-case guarantee coverage.

Regarding goodwill and customer-related assets recognized through business combinations, if expected cash flows are not generated due to a divergence from the acquired company's business plan or other factors, impairment losses may need to be recognized, which could have a material impact on performance. The Company has established a continuous monitoring system through attendance at various meetings and reports periodically to the Board of Directors.

If the performance of an affiliated company deteriorates significantly and it is determined that its business is not developing as planned, impairment of shares in the affiliated company may become necessary. The Company strives for early detection by establishing a continuous monitoring system through attendance at various meetings and reporting periodically to the Board of Directors.

As much of the Company's operations depend on information systems, if system failures occur due to cyberattacks or other causes, business interruption due to loss of critical data, and damage to credibility, compensation for damages, and recovery costs due to leakage of customer information could affect performance. The Company implements measures such as server data center management and maintenance, strengthening email server security, and conducting targeted attack email training.

If natural disasters such as major earthquakes or typhoons, or sudden accidents such as fires occur, this could affect performance due to damage to production facilities or disruption of the supply chain. In addition, if the spread of infectious disease restricts business activities at manufacturing sites and elsewhere, the suspension of manufacturing functions and expenditure on infection control measures could affect performance and financial condition. The Company addresses these risks through comprehensive corporate property insurance coverage, storage of internal information at external data centers, and infectious disease countermeasures based on guidelines from supervisory authorities.