LINTEC Corporation

Business performance may be affected by global economic fluctuations, geopolitical risks, changes in domestic demographic trends such as the declining birthrate and aging population, changes in consumption patterns, and natural disasters. In particular, fluctuations in demand related to semiconductors and electronic components, soaring raw material prices, and rising logistics costs are cited as concerns. As countermeasures, the Group is working to expand its share in existing businesses, create new markets, strengthen global competitiveness, and promote sustainability management.

Intensifying competition in domestic and overseas markets and fluctuations in raw material prices may make it difficult to maintain unit selling prices and market share, raising concerns about a decline in profitability over the medium term. In addition to developing high-value-added products, optimizing price pass-through, and strengthening relationships with customers, the Group is working to secure stable earnings through differentiation strategies and cost reduction.

The Group uses many raw materials, such as paper and petrochemical products, that are susceptible to market fluctuations, and price fluctuations due to international market conditions, exchange rates, and environmental regulations may affect business performance. In addition to building a stable procurement system, the Group is strengthening risk management through measures such as optimizing order timing, diversifying suppliers, and adjusting inventory.

With a high ratio of overseas sales, there is a risk that business activities and earnings may be affected by changes in the political, economic, and social conditions of each country, stricter regulations, the spread of infectious diseases, and sudden changes in exchange rates. The Group strives to minimize such impacts through diversified investment, strengthened BCP, gathering of local information, and the use of forward exchange contracts.

In research and development aimed at creating high-value-added products, there is a risk that prolonged development periods or discontinuation of projects may make it difficult to recover investments, affecting business performance. The Group strives to make effective use of management resources by improving the precision of selecting development themes that meet user needs and by thoroughly managing progress.

While the Group is advancing intellectual property protection both domestically and overseas, differences in legal systems among countries and the risk of imitation may lead to rights infringement or litigation over the medium term, which could adversely affect business performance through litigation costs and business restrictions. The Group strives to reduce intellectual property risk through reviewing the scope of rights, establishing infringement response systems, and strengthening investigations of third-party rights.

In the course of business activities both domestically and overseas, litigation and claims related to product liability, the environment, intellectual property, and labor matters may arise over the medium to long term, which could adversely affect business performance through damages, response costs, and damage to corporate image. The Group strives to minimize such impacts through thorough legal compliance and strengthened internal control and risk management systems.

While the Group complies with a variety of laws and regulations in each country, future legal amendments and stricter regulations related to the environment, safety, trade, and other areas may over the medium term impose constraints on production and sales activities, adversely affecting business performance. The Group is developing systems to monitor regulatory trends in each country and internal response frameworks, striving to respond appropriately and in a timely manner.

In preparation for the impact on business from natural disasters such as climate change and earthquakes, as well as major accidents, the Group continues to improve and operate its BCP and BCMS. It strives to enhance resilience by reviewing disaster risk assessments, diversifying sites, and establishing alternative supply systems, and verifies effectiveness through drills and internal audits.

Increasingly sophisticated cyberattacks pose a risk of information leaks and system failures, which, if realized, could adversely affect business performance through loss of trust and business disruption. The Group strengthens security measures through strict management of confidential information, development of information infrastructure, and education and audits, and strives to continuously reinforce these measures.