Suzumo Machinery Co., Ltd.

The company's principal users are major chain stores such as conveyor-belt sushi restaurants, rice-bowl chains, and supermarkets, and changes to or cancellations of customers' capital expenditure plans, including new store openings and renovations, could have a significant impact on operating results. The company addresses this through enhanced proposal-based sales activities and the introduction of new products based on customer needs, but it faces a structural risk that depends on decision-making by customers.

In addition to the company, several competitors have entered the commercial rice processing machinery market, and there is no guarantee that the company's market share, which it has led since 1981, can be maintained going forward. If competition intensifies further, a decline in product market share could adversely affect operating results; the company is countering this through the development of new products that anticipate customer needs.

Overseas operations are subject to a variety of risks, including unforeseen changes in tax systems and regulations in each country, uncertainty in transfer pricing negotiations, changes in licensing and subsidy policies, sharp exchange rate fluctuations, and political instability. Should these risks materialize, stable product sales in overseas markets may become difficult, potentially impeding business growth.

Since the local-currency-denominated operating revenues, expenses, and assets of overseas consolidated subsidiaries are translated into yen when preparing the consolidated financial statements, fluctuations in exchange rates may affect the group's overall business performance and financial position. In particular, because the company operates across multiple regions including North America, Asia, and Europe, it faces foreign exchange risk spanning multiple currencies.

Demand for the replacement and introduction of supplies and machinery rises ahead of the year-end/New Year and Ehomaki (lucky direction sushi roll) seasons in Japan, causing sales and profit to be concentrated in the third quarter. This seasonal fluctuation may result in relatively weak performance in other quarters, potentially affecting the accuracy of full-year performance forecasts and cash flow management.

The company has carried out M&A and capital alliances aimed at strengthening its business foundation and expanding into new businesses, including cases such as the acquisition of a 35% equity stake in Bluefin Trading LLC and the 100% acquisition of Nihon System Project Co., Ltd. (scheduled to be absorbed by merger in September 2025). If post-acquisition business plans do not progress as initially planned, this could result in the need for substantial additional capital injections or the recognition of impairment losses due to difficulty in recovering the invested amount, potentially affecting business performance and financial position.

In certain countries, patent rights may not be fully protected, and in cases where the company is unable to prevent third parties from manufacturing and selling similar or imitation products, its competitive advantage may be undermined through the loss of users and target markets. In addition, if the company's products are found to infringe upon the intellectual property rights of others, litigation costs such as damages claims and injunctions may arise, potentially affecting business performance and financial position.

The company procures many raw materials and parts from external suppliers, and if prolonged price increases occur due to supply-demand tightness or market fluctuations, this could reduce profits. If procurement itself is disrupted, manufacturing and sales of products could become difficult, potentially leading to a deterioration in business performance.

Although the company has established its own ISO-compliant quality control system, if a serious defect or flaw occurs in the products or services provided, the company could be held liable for substantial damages, potentially having a material impact on business performance and financial position. In addition, a decline in the company's social reputation and brand value could lead to reduced product demand, raising concerns about secondary adverse effects on business performance.

Since production activities are conducted at only two sites within Japan, natural disasters such as earthquakes, typhoons, and floods, as well as war, terrorism, fire, and similar events, could cause severe damage to manufacturing, logistics, and sales activities. In addition, if demand for dining out declines due to the spread of infectious diseases, this could lead to a decrease in the number of customers in the restaurant and prepared-food industries, which are the company's principal users, as well as the cancellation or revision of capital expenditure plans; combined with disruptions in domestic and overseas logistics networks, this could have a significant impact on business performance.