Risk that the medium-term management plan will not progress as planned

「The performance of each segment remained solid through the third year of the plan as the company worked to capture demand.」

「Actual results for fiscal 2024 substantially exceeded expectations.」

「During the interim consolidated accounting period, there were no new major risks or significant changes to the business risks described in the annual securities report that management recognized as potentially having a material effect on the financial position, operating results, or cash flows of the consolidated companies, among the matters concerning business conditions and financial matters described in this Semiannual Report.」

「During the third quarter of the current consolidated cumulative period, there were no material changes in the occurrence of major risks that management recognizes as potentially having a material impact on the consolidated companies’ financial position, results of operations or cash flows, or in the “Business and Other Risks” described in the annual securities report for the previous fiscal year, among the matters concerning the business and financial conditions described in this quarterly securities report.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the three-month period ended 30 June, there were no new risks that management recognizes as having the potential to materially affect the financial position, operating results or cash flows of the consolidated companies, and no material changes to the business risks described in the annual securities report for the previous fiscal year.」

「The numerical targets were not achieved, however」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「The impact of the spread of COVID-19 on operating revenue during the period was a factor contributing to an approximately ¥15.3 billion decline in revenue for the Group as a whole.」

「During the second quarter of the current consolidated cumulative period (hereinafter, the “second quarter”), the Japanese economy remained uncertain. Although COVID-19 vaccinations progressed, infections increased sharply due to highly transmissible variants, states of emergency and priority preventive measures remained in effect, and restrictions on economic activity continued.」

「The business environment surrounding the Group has changed substantially amid challenges including labor shortages resulting from the full-scale decline and aging of the population, as well as the stagnation of economic activity caused by COVID-19 and the entrenchment of the new lifestyle.」

「During the third quarter of the current consolidated cumulative period (hereinafter, the “third quarter”), the Japanese economy remained uncertain. Although economic activity partially picked up as the number of infected people temporarily declined amid a continuing economic downturn caused by the spread of COVID-19, the sharp increase in infections from December 2020 raised concerns about the issuance of another state of emergency.」

「During the second quarter of the current consolidated cumulative period (hereinafter, the “second quarter”), the Japanese economy remained uncertain. Although economic activity gradually resumed after the lifting of the state of emergency associated with COVID-19, concerns arose about requests to refrain from nonessential and nonurgent outings and the resulting economic stagnation following a renewed spread of the disease.」

「During the first quarter of the current consolidated cumulative period, the Japanese economy remained in an extremely difficult situation, with corporate earnings and personal consumption declining due to the stagnation of economic activity, restrictions on movement and requests to refrain from going out resulting from the impact of COVID-19.」

「The domestic and overseas economies have deteriorated due to the impact of COVID-19, and the business environment is expected to remain extremely difficult for the time being. The Group also experienced a substantial decline in consumer demand during the consolidated fiscal year, and the outlook remains uncertain, including the timing of containment, leaving the situation unpredictable.」

「Based on the medium-term management plan, the Group is promoting various initiatives and working to strengthen its financial position, with priority given to advancing a growth strategy through business expansion in重点 areas, improving profitability, reducing interest-bearing debt, providing safe, secure, stable and comfortable services, and strengthening the Group’s management foundation. However, if the plan does not progress as planned, business performance may be affected.」