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Business Risks
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This website contains information about business conditions, the financial situation, and other factors that may influence investor decisions. Forward-looking statements are based on the judgments of the LIXIL group of companies’ management as of March 2022.
Statements concerning the future and assumptions are subject to uncertainty and risks, and actual results may vary significantly.
Principal Risks and Countermeasures
In order to achieve its business objectives, the LIXIL group regularly identify and assess risks that may have an impact on business activities based on group-wide criteria and prioritize risks to be addressed.
The LIXIL group classifies risks into strategic risks and operational risks, formulates and implements countermeasures for addressing each risk, monitors their progress, and makes ongoing improvements. In doing so, the LIXIL group realizes sustainable value creation for its stakeholders. Furthermore, to address high-priority risks, the Audit Committee monitors whether effective measures are being taken through participation in meetings of the Board of Directors, the Board of Executive Officers, and other committees.
Risks that could have a significant impact on the business in the long-term future (three to five years or later) are identified as emerging risks and countermeasures are being promoted.
| Business Risk | Possibility of occurrence*1 | Degree of impact | Changes in materiality from the previous year | ||||
|---|---|---|---|---|---|---|---|
| Strategic Risk | Cross-business Risk | (1) | Risks related to changes in the economic environment and fluctuations in exchange rates and interest rates | High | High | Same level | |
| (2) | Risks related to the development of new products | Middle (Low) | Middle | Increase | |||
| (3) | Risks related to the supply of raw materials | Middle (Low) | Middle | Increase | |||
| (4) | Risks related to Environment (Climate change, water, and resources) | Middle | Middle | Same level | |||
| (5) | Risks related to business restructuring | Low | Middle | Same level | |||
| (6) | Risks related to tie-ups with other companies and corporate acquisitions | Low | Low | Same level | |||
| (7) | Risks related to the acquisition and development of human resources and the promotion of diversity | Middle (Low) | Middle | Increase | |||
| (8) | Risks related to the capacity of facilities | Low | Low | Same level | |||
| Business-specific Risk | LWT*2 | (9) | Risks related to sales channels | Middle | Middle | Same level | |
| (10) | Brand risk | Low | High | Same level | |||
| LHT*2 | (11) | Risks related to competition with competitors and product prices | Middle | Middle | Same level | ||
| Operational Risk | (12) | Risks related to disasters, accidents and infectious diseases | Middle | High | Same level | ||
| (13) | Risks related to information security | High (Middle) | Middle | Increase | |||
| (14) | Risks related to litigation and other legal proceedings | Low | Middle | Same level | |||
| (15) | Risks related to product liability and claims | Low | Middle | Same level | |||
| (16) | Recoverability risk of deferred tax assets | Low | Middle | Same level | |||
*1 For risks that the assessment have been changed from the previous consolidated fiscal year,
the previous year's risk assessment is included in ( )
*2 LWT：LIXIL Water Technology, LHT：LIXIL Housing Technology
For details of the LIXIL group's strategic, operational, and emerging risks and countermeasures, please refer to the PDF.
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