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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