Nozaki Insatsu Shigyo Co., Ltd.

The Group is in competition with many companies, and order prices have continued to decline. While the Group strives to secure profits through the development of high-value-added products and cost reductions, further intensification of competition may adversely affect its business results.

Paper stock, a key raw material, is at risk of price increases due to conditions in the pulp and paper market and rising crude oil prices. Because competition in sales prices within the industry is intense, making cost pass-through difficult, increases in raw material costs may directly lead to lower profitability and affect business results.

The information equipment manufactured and sold by the Group is subject to rapid obsolescence due to technological innovation, while the production system requires manufacturing in certain lot sizes. If misjudgment of market trends results in excess inventory, the recording of valuation losses may affect business results.

Capital expenditure funds are procured through internal funds and borrowings from financial institutions, resulting in interest-bearing debt. Should interest rate levels rise in the future, an increase in interest expenses may adversely affect the Group's financial position and business results. Although the Group strives to strengthen its equity capital, interest rate risk remains.

Each business handles personal information, and the Group has obtained Privacy Mark certification and implemented measures to prevent leaks. Should personal information be leaked, the loss of social trust and potential litigation may have a material impact on business results.

Should an infectious disease outbreak or large-scale disaster occur, contraction of the printed media market or the disruption of business sites and logistics facilities may affect business results. Although the Group has implemented measures such as promoting work-from-home arrangements and diversifying production sites, there is a risk that responses may be difficult in the event of a situation exceeding what is anticipated.

Because some of the Group's products fall under the category of containers and packaging as defined by the Containers and Packaging Recycling Law, the Group outsources recycling operations to the Japan Containers and Packaging Recycling Association. Should there be revisions to laws and regulations or changes in outsourcing costs, the resulting increase in cost burden may affect business results.