LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a reality for everyone, everywhere.
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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 2023.
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 purpose, 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. In addition to advice and supervision by the Board of Directors, the outside directors who are members of the Audit Committee conduct hearings and request reports in the Committee to exercise supervision and control over the execution of business operations, as well as by participating to the meetings of the Board of Directors, the Board of Executive Officers, and other committees, as observers. The possibility of occurrence and the degree of impact are residual; after taking into account the countermeasures.
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 Fiscal 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) | Geopolitical risks | High | Middle | New | |||
| (3) | Risks related to the development of new products | Middle | Middle | Same level | |||
| (4) | Risks related to the procurement of raw materials | Middle | Middle | Same level | |||
| (5) | Risks related to environment (Climate change, water, and resources) | Middle | Middle | Same level | |||
| (6) | Risks related to business restructuring | Low | Middle | Same level | |||
| (7) | Risks related to tie-ups with other companies and corporate acquisitions | Low | Low | Same level | |||
| (8) | Risks related to the acquisition and development of human resources and the promotion of diversity | Middle | Middle | Same level | |||
| Business-Specific Risk | LWT*2 | (9) | Risks related to sales channels | Middle | Middle | Same level | |
| (10) | Brand risks | 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 and cyber security | High | Middle | Same level | |||
| (14) | Risks related to intellectual property | Middle (Low) | Middle | Increase | |||
| (15) | Recoverability risk of deferred tax assets | Low | Middle | Same level | |||
| (16) | Risks related to regulatory environment and requirements | Low | Low | New | |||
*1 For risks that the assessments have been changed from the previous consolidated fiscal year,
the previous year's risk assessments are included in ( ).
*2 LWT: Water Technology Business, LHT: Housing Technology Business
For details of the LIXIL group's strategic, operational, and emerging risks and countermeasures, please refer to the PDF.
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