Panasonic Holdings Corporation

There is a risk of leakage of trade secrets and personal information due to cyber attacks, suspension of information systems and production equipment, and large-scale recalls stemming from vulnerabilities in products and services. Incidents occurring within the supply chain could impede raw material procurement, potentially leading to suspension or delay of product supply. As countermeasures, the Group is strengthening a globally unified security monitoring framework, enhancing redundancy and backup of critical systems, and has established a "Cybersecurity Strategy Office" that integrates information, product, and factory security.

If effective utilization and development of AI does not proceed as expected, there is a risk that business opportunities and the competitiveness of products and services will be lost. In addition, compliance issues such as privacy infringement and copyright infringement arising from AI utilization could damage the brand image. As countermeasures, the Group is promoting the establishment of "AI Ethics Principles," the establishment of an AI Ethics Committee, compliance with the EU AI Act, and the establishment of a Group CAIO.

There is a risk that demand for and prices of products and services may decline due to competitors possessing greater financial strength, technological capabilities, and marketing resources, as well as a risk of losing competitiveness due to failure to predict future market needs and new technologies. As countermeasures, the Group is promoting strategic investment in businesses with strengths, cost reduction and operational improvement through the use of digital technology, and maintaining sales prices in the BtoC field through the introduction of a "designated price system."

In acquisition deals including Blue Yonder (made a wholly owned subsidiary in September 2021), there is a risk that impairment losses on recognized goodwill and intangible assets may occur if the expected effects are not achieved or due to changes in the business environment or competitive conditions. In addition, since control is not exercised over equity-method affiliates, there is a possibility that events beyond the Group's control could adversely affect business performance and financial condition. For important strategic alliances, the Group has established a framework for phased deliberation of consistency with business strategy, price validity, and integration plans.

If serious compliance violations such as violations of antitrust law, competition law, or bribery occur, there is a risk of becoming subject to administrative dispositions such as fines, criminal penalties, and damages litigation, adversely affecting social reputation. In addition, if legal regulations in various countries become stricter or interpretations change, it may become difficult to respond to such regulations or continue business operations from a technical and economic standpoint. As countermeasures, the Group thoroughly disseminates the "Panasonic Group Code of Conduct" to all employees, has established a global hotline, and conducts risk-based compliance training.

If quality problems arise due to product defects (unsafe incidents, large-scale recalls, etc.), there is a risk of liability and significant countermeasure costs that cannot be fully covered by product liability insurance, leading to a decline in brand image and customer attrition. At the subsidiary PID, multiple instances of misconduct related to UL certification were discovered in FY2023, and an external investigation committee has conducted an investigation and implemented and disclosed recurrence prevention measures. Group-wide, a thorough voluntary investigation into quality compliance was completed from January 2024 to August 2025, and recurrence prevention measures are being promoted.

There is a risk that the business environment could change abruptly due to strengthened trade regulations, economic sanctions, and tariff barriers resulting from US-China tensions, trade friction, additional tariff measures, and changes of government or policy shifts in various countries. In particular, a slowdown in EV adoption rates due to the elimination of EV mandates and reduction of subsidies could adversely affect the automotive battery-related business. As countermeasures, the Group monitors international conditions, has established a BCP prioritizing human life and safety, is diversifying the supply chain, and has strengthened customer and transaction screening related to export controls.

There are risks of increased energy procurement costs due to the introduction of carbon pricing, decreased demand for automotive batteries and loss of tax incentives due to the repeal or reduction of the US IRA (Inflation Reduction Act), and increased R&D and capital expenditure due to advance investment in low-carbon technologies. On the other hand, there are also opportunities for new technology and business development in response to environmental policy. Based on the Group's long-term environmental vision "Panasonic GREEN IMPACT," the Group is promoting initiatives aiming to create a CO₂ reduction impact of over 300 million tons by 2050.

There are risks of decreased price competitiveness of products and services and increased import costs due to sharp fluctuations in foreign exchange rates, increased interest expenses and interest-bearing debt due to rising interest rates, and constraints on and increased costs of fundraising due to instability in financial markets. For FY2026 (ending March 2026), the yen is expected to appreciate against the US dollar and the euro, and a certain degree of adverse impact on business performance is anticipated. As countermeasures, the Group implements foreign exchange netting, forward exchange contracts, and local production for local consumption, and secured sufficient liquidity by concluding a commitment line agreement totaling ¥600 billion in June 2024.

For non-financial assets such as property, plant and equipment, goodwill, and intangible assets, there is a possibility of recognizing impairment losses if the recoverable amount falls below the book value due to changes in business plan figures, discount rates, share prices, etc. In particular, the amount of goodwill and intangible assets recognized has increased due to multiple additional acquisitions related to Blue Yonder, and changes in the business environment or competitive conditions increase impairment risk. In addition, there is a risk that corporate income tax expense could increase if the recoverability of deferred tax assets declines.