Risk of Business Performance Volatility Due to Major Customers and Product Strategies

「Because sales of some of the Company's business units and products depend on specific customers, the investment and sales plans and materials procurement policies of those customers could affect the Group's performance and financial condition.」

「In the automotive market, sales volumes and product mix for our major customers, the automakers of Japan, North America, and Europe, remain uncertain as their sales strategies are being revised in response to changes in market conditions.」

「In the Tier 1 business, automakers in Japan, North America and Europe, the Company's major customers, were affected by production cuts due to intensified competition in the Chinese market in the previous fiscal year. In the current fiscal year, the business has shown a trend toward remaining flat to recovering slightly year on year.」

「Meanwhile, Tier 1 business with automakers in Japan, North America and Europe, the Company's major customers, has continued to stagnate.」

「Operating profit was below the same period of the previous year due to lower sales and changes in the model mix of products for smartphones.」

「Operating profit was below the same period of the previous year due to lower sales and changes in the mix of products for smartphones.」

「Operating profit was below the same period of the previous year due to the competitive environment surrounding products for smartphones and changes in the composition of products sold.」

「The Group is working to earn customer satisfaction through the introduction of new products, the supply of high-quality products, the development and expansion of its global network, and the promotion of M&A and business alliances, while also pursuing cost-structure reforms. However, competition in the market with competitors in Japan and overseas is expected to intensify further.」

「Although we focused on efforts to achieve appropriate pricing with business partners for higher material and logistics costs and on cost reductions, the recovery in operating profit was gradual because material costs remained high and the contribution to performance from the yen’s depreciation was limited for some products.」

「Sales increased partly due to the contribution of the yen's depreciation to performance, but operating profit was below the same period of the previous year due to higher costs for materials, logistics and other items.」

「Higher material costs and increased logistics costs due to supply chain disruption had a significant impact. Although the Company worked to contain fixed costs, including by reviewing resource allocation, and minimized the deterioration in performance, both sales and operating profit declined from the same period of the previous year.」

「During the nine-month period ended December 31 of the current fiscal year, sales of navigation and display products for European luxury automakers remained strong, but profits declined due to changes in the product mix.」

「On the profit side, the Company has been promoting productivity improvements through the stable operation and greater efficiency of new sites, but profits declined due to the impact of costs associated with launching new sites and persistently high airfreight rates.」

「On the profit side, the Company has been working to improve productivity, but profits declined due to higher costs, including the costs of launching new sites and persistently high airfreight rates.」

「These factors include changes in the overall economy and business environment, the success or failure of launching set products in the market, changes in product strategies and other policies by major customers, cancellations of large orders, bankruptcies of major customers, major changes resulting from the disappearance of major customers through M&A, fluctuations in the prices of raw materials and purchased components, fluctuations in transportation and other costs, power supply conditions, and the management of personal and confidential information,」

「These factors include changes in the overall economy and business environment, the success or failure of launching set products in the market, changes in product strategies and other policies by major customers, cancellations of large orders, bankruptcies of major customers, and major changes resulting from the disappearance of major customers through M&A. Unfavorable changes in these or other factors could affect the Group's performance and financial condition.」