Maezawa Industries, Inc.

Net sales show seasonal variation, with a large proportion of construction projects being completed or progressing further in the second half of the fiscal year, resulting in a significant divergence between the first and second halves. In the fiscal year under review (June 2024 to May 2025), net sales in the first half were ¥13,982 million (37.3% of the total) versus ¥23,516 million (62.7%) in the second half, and operating income was ¥499 million in the first half versus ¥4,154 million in the second half, confirming a substantial skew. This structure carries the risk of affecting the accuracy of cash flow management and performance forecasts in the first half.

Public works projects account for a high proportion of the Group's business, and unexpected policy shifts by national and local governments, deterioration in their fiscal condition, or fluctuations in budget execution status could directly affect performance through reductions or cost cuts in public works budgets. The high dependence on public works constitutes a structural risk that undermines the stability of earnings. No specific countermeasures are described.

If prices of steel and other materials and equipment rise sharply, and it proves difficult to pass on such increases to selling prices, performance could deteriorate due to a rise in the cost ratio. Since contract prices are fixed for orders already received, there is a high risk that cost increases will directly squeeze profits. No specific countermeasures are described.

Changes in the fair value of pension assets, changes in investment yields, and revisions to assumptions such as the discount rate may cause retirement benefit expenses and obligations to increase or decrease, affecting performance. In particular, actuarial differences are expensed in full in the fiscal year in which they occur, making them a factor in year-to-year performance fluctuations. As a countermeasure, the company has established the "Maezawa Group Corporate Pension Management Committee," which monitors and evaluates the investment performance of asset managers on a quarterly basis.

There is a risk that the Group's business activities could be disrupted or halted due to natural disasters such as earthquakes, tsunamis, or typhoons, accidents such as fires, information system outages, or the outbreak of infectious diseases. If construction sites or manufacturing facilities are damaged, this could have a material impact on performance through construction delays, order losses, and recovery costs. No specific countermeasures are described.

If an outage occurs in information systems, including communication networks, operations such as order management, construction progress management, and financial processing could be disrupted, potentially affecting overall business activities. System downtime caused by cyberattacks or failures could also lead to delivery delays to customers and loss of trust. No specific countermeasures are described.