SENKO Group Holdings Co., Ltd.

Fluctuations in the yen-translated value of foreign-currency-denominated assets and liabilities, changes in the foreign-currency-denominated purchase cost of overseas products, and the yen translation of the operating results of overseas group companies may be affected. Since fluctuations in the yen and foreign exchange rates spread across a wide range of financial indicators, this may impact the operating results and financial position of the group as a whole. There is no explicit description of individual hedging instruments in the securities report.

The company raises funds through borrowings from financial institutions and the issuance of corporate bonds. If there is a sudden fluctuation in market interest rates, disruption in financial markets, or a significant downgrade of credit ratings, funding costs may increase, potentially having a significant impact on operating results and financial position. As countermeasures, the company is working to maintain an appropriate credit rating, diversify funding methods and maturities, and reduce risk by fixing interest rates.

M&A and capital alliances aimed at expanding existing businesses or entering new businesses are conducted as part of the business strategy. However, significant changes in the market environment after acquisition, legal regulations, unexpected cost increases, and other factors may prevent the initially expected effects from being achieved. In addition, if contingent liabilities or unconfirmed liabilities that could not be identified through prior due diligence come to light, this may impact operating results and financial position.

The company has numerous logistics facilities both domestically and internationally, and long-term considerations of investment effectiveness and expected cash flow recovery are made for capital expenditures and long-term lease agreements. However, changes in economic trends or customer companies' circumstances may result in earlier-than-planned disposal or return of facilities, which could result in temporary losses or impairment losses.

The group has a high proportion of labor-intensive businesses, and tightening labor supply and demand due to the declining birthrate, aging population, and shrinking labor force may result in group companies and partner companies being unable to secure necessary personnel, or in significantly increased costs due to intensified competition for talent, which could impact operating results. As countermeasures, the group is working to develop group-wide HR strategies, strengthen recruitment, enhance talent development and training systems, and promote DE&I to realize diverse working styles.

IT is utilized for cargo information management in the Logistics Business and system management for various services. Natural disasters, system malfunctions, computer viruses, hacking, and other causes of system outages may impact operating results and financial position. In addition, if cyberattacks or unauthorized access result in the external leakage of customer information or data loss, there is a risk of reduced social credibility and claims for damages.

The Logistics Business, Trading Business, Life Support Business, Business Support Business, and Product Business each require compliance with a wide range of laws and regulations, including various business-specific laws. Future tightening of regulations or the application of new regulations may result in additional costs or force changes to business operation methods. Compliance is recognized as a top priority issue, and the company is working to raise awareness through dissemination of the "Senko Group Corporate Code of Conduct" and training programs for group company executives and by hierarchical level.

In the event of disasters such as heavy rain, heavy snow, typhoons, earthquakes, or power outages, transportation route disruptions, business suspensions, facility restoration costs, and reduced transaction volumes due to customer damage may occur over the medium to long term. In addition, cost increases due to sudden rises in fuel prices or transition risks such as carbon taxes may also impact operating results and financial position. The company implements risk management based on the TCFD framework and conducts BCP inspections and reviews through the Natural Disaster Risk Subcommittee.

A rise in diesel fuel prices due to a surge in crude oil prices directly leads to increased transportation costs in the Logistics Business, which is centered on the Truck Freight Transportation Services, potentially impacting operating results. In addition, surges in prices of various raw materials and supplies caused by crude oil prices, even outside the Logistics Business, may impact the operating results and financial position of the group as a whole.

The company is pursuing overseas business expansion as part of its growth strategy. However, a wide range of risks, including changes in economic conditions in the regions of expansion, differences in business customs, fluctuations in exchange rates, changes in political or legal regulations, conflicts, natural disasters, outbreaks of epidemics, and disruptions to supply chains, may impact operating results and financial position.