SUZUKI CO.,LTD.

The electronic components industry to which the Group belongs is subject to significant fluctuations between booms and downturns, and if unforeseen events such as a semiconductor industry downturn or the COVID-19 pandemic occur, this may affect business results and business development. The Group pays close attention to industry trends while working to mitigate risk through business expansion into growth areas.

Sales to Sumitomo Wiring Systems, Ltd. accounted for 26.47% of total sales in FY2025 (ending June 2025), indicating a high degree of dependence on a specific customer. If component supply were to decrease significantly due to changes in the customer's component composition or purchasing policy, this could have a material impact on business results and financial condition. The Group's policy is to continue expanding transactions with existing customers and developing new customers.

The electronic components industry, to which the Molds Business and Components Business belong, faces a challenging business environment due to price competition with domestic and overseas competitors, expanding in-house production by customers, and the offshore shift of production and procurement. In markets such as automated equipment, the Group is also exposed to intense competition in terms of both technology and price, and declining product prices may affect business results and financial condition. The Group is working to maintain and strengthen cost competitiveness through the promotion of an efficient and rational manufacturing structure.

The price of rolled copper products, a key raw material for the Components Business, is linked to international copper market conditions, and rising raw material prices could reduce profit margins. In addition, depending on market conditions and supply-demand balance, shortages in the procurement of raw materials and purchased components may occur, which could affect business results and financial condition. The Group shares the latest market information with business partners and suppliers and strives to address issues at an early stage.

The Group conducts some transactions in foreign currencies at its production sites in Japan, China, and Indonesia, and significant fluctuations in exchange rates could affect business results and financial condition. Gains and losses arising from the fair value measurement of foreign-currency-denominated liabilities could have a similar impact.

As the Group's main production sites are concentrated in Suzaka City, Nagano Prefecture, a large-scale disaster occurring in this region could cause serious damage to production facilities, having a material impact on business results and business development. In addition, the outbreak of a serious infectious disease could also affect business results and financial condition. The Group has formulated a BCP (Business Continuity Plan) and continuously reviews and improves it.

Securing and developing talented personnel, including skilled engineers, is essential for business continuity and expansion, but if this does not proceed as planned, it may adversely affect business operations. Given the rapid pace of technological innovation in the electronic components industry, a shortage of personnel poses a risk directly linked to a decline in competitiveness.

Although the Group manufactures products in accordance with prescribed quality control standards, there is no guarantee that all products will be free of defects in the future or that costs associated with product liability claims will not arise. While the Group has product liability insurance, there is no guarantee that it will cover the full amount of any eventual compensation, and the occurrence of product defects could affect financial condition and business results, among other things.

The Group conducts joint venture operations in China and Indonesia, and unexpected changes in laws and regulations, changes in political and social conditions, or social unrest caused by terrorism or conflict could affect business results and financial condition. Since operations are conducted in a joint venture format, the relationship with partner companies and responses to local regulations are also important risk factors.

As the realization of a decarbonized society becomes a globally shared understanding, delays in responding to environmental risks could lead to raw material shortages, increased costs from regulatory compliance, supplier selection by customers, and a decline in corporate image, among other effects, potentially affecting business results and financial condition. The Group is promoting responses to SDG targets based on its Basic Environmental Policy and strengthening its efforts toward human capital management.