Fujikura Ltd.

The Company Group's products are primarily components for infrastructure and final consumer goods, and are subject to the effects of business cycles, capital expenditure trends, the competitive environment, and changes in customers' purchasing policies. If demand fluctuates significantly in the short term due to an economic downturn or other factors, this could adversely affect business performance. The Group strives to reduce the impact by monitoring market trends and adjusting production, inventory, and costs.

The Company Group operates production and sales activities extensively overseas, and bears foreign exchange fluctuation risk with respect to foreign-currency-denominated sales transactions and other items. Although currency hedging transactions are conducted within the scope of actual demand, this does not completely eliminate foreign exchange risk, and revenues, expenses, and asset values after conversion to yen may fluctuate. Fluctuations in exchange rates directly affect consolidated business performance.

In procuring copper, the Group's primary material, as well as auxiliary materials and rare resources, it may become difficult to secure the necessary quantities due to supply chain disruptions, tight supply-demand conditions, or changes in suppliers' policies. Copper prices fluctuate based on international supply and demand trends, and since fluctuations in purchase prices are not always immediately reflected in product prices, significant price fluctuations may affect operating results and financial condition. Soaring energy prices constitute a similar risk factor.

The Group operates its Information & Communications Segment, Electronics Segment, Automotive Segment, Energy Segment, and other segments both domestically and internationally, and rapid changes in the political and economic conditions of various countries, intensification of trade friction, and the occurrence of conflicts or terrorism may affect business performance. The Group continuously monitors and analyzes the trade environment and geopolitical risks in each country and region and takes countermeasures, but such risks cannot be completely eliminated.

The Company Group is subject to a wide range of legal regulations in the countries where it operates, including government licensing and approvals, commercial transactions, import/export regulations, taxation, and environmental laws and regulations. If significant changes to or strengthening of legal regulations occur in the future, business activities may be restricted or compliance costs may increase, potentially adversely affecting business performance.

In the course of conducting business, the Group is exposed to risks related to litigation, actions by regulatory authorities, and other legal proceedings, which may result in claims for damages, imposition of fines, or restrictions on business operations. Such legal proceedings may adversely affect the Group's business, operating results, and financial condition.

The Group manufactures products in accordance with strict quality control standards under the company-wide 'Fujikura Quality Policy' and has also taken out product liability insurance. However, if serious claims or defects/quality issues leading to product liability arise, costs related to product recalls, compensation, and improvements to the quality control system will be incurred. This may also affect sales activities due to a decline in credibility, potentially affecting operating results and financial condition.

The Company Group holds a large amount of confidential information, including personal and customer information. If information is leaked externally due to cyberattacks by third parties or computer virus infections, this could damage the Group's corporate image and result in claims for damages. In addition, if the normal operation of information systems and networks is disrupted, this may affect the production system, operating results, and financial condition through business suspension, reduced production efficiency, and increased recovery costs.

There is a risk that manufacturing sites and the supply chain may be affected by natural disasters such as large-scale earthquakes and wind/flood damage, the spread of infectious diseases, or crises such as fires, explosions, or power outages, resulting in disruption of business activities, reduced utilization rates, and decreased sales. The Group has formulated BCPs for each business division and product and conducts ongoing education and training, and in 2025 established company-wide disaster prevention guidelines to monitor and support each site.

Competition to acquire talent is intensifying both domestically and internationally, and if the Group is unable to secure necessary human resources or prevent their departure, this could constrain business activities through stagnation of development and technological capabilities and delays in leveraging digital technology. The Company is implementing human resource management measures such as flexible working arrangements, realization of diversity, career development support, fair evaluation systems, and appropriate personnel placement, promoting the creation of an organization in which diverse talent can thrive globally.