Political and Economic Changes Associated with Overseas Business Expansion and Delayed Recovery of Upfront Expenditures

「Some regions were affected by sluggish demand resulting from U.S. tariff policy.」

「Some regions were affected by sluggish demand resulting from U.S. tariff policy.」

「Political, economic and national security turmoil has emerged, including tensions between the United States and China, the trade policies of various countries, and the situations in Ukraine and the Middle East. In addition, the growing regional fragmentation of global supply chains has increased uncertainty in Japan and overseas business expansion.」

「Meanwhile, in Europe and the United States, market conditions remained weak under the continuing effects of geopolitical risks and other factors. A cautious stance toward capital investment was evident, and conditions remained sluggish.」

「During the current fiscal year, political, economic and national security turmoil continued, including the prolonged U.S.-China confrontation and the situations in Ukraine and Palestine. In addition, unstable factors affecting overseas business expansion have increased due to post-pandemic changes in market structures and the growing regional fragmentation of global supply chains.」

「During the nine-month period ended this quarter, China, where economic activity had stagnated, continued to show little sign of recovery. Concerns about recession in Europe and the United States also remained unresolved, and global capital investment demand was generally sluggish.」

「Meanwhile, weak demand for capital investment resulted in a slight year-on-year decline in Japan and lower revenue year on year in overseas regions.」

「In China, which was heavily affected by the pandemic in the previous fiscal year, the subsequent economic recovery was significantly delayed, and weak demand continued.」

「During the current fiscal year, political, economic and national security turmoil continued, including the prolonged U.S.-China confrontation and the situation in Ukraine. In addition, unstable factors affecting overseas business expansion have increased due to post-pandemic changes in market structures and the growing regional fragmentation of global supply chains.」

「During the nine-month period ended, the global economy was increasingly entering a recessionary phase as the effects of COVID-19 continued, and manufacturers became more cautious about capital investment related to automation. In China, weak demand continued due to lockdowns at the beginning of the period and the subsequent rapid spread of infections. Outside China, demand gradually slowed under the effects of economic deceleration, inflation and other factors.」

「In China, demand slowed due to lockdowns and power restrictions in some regions. In Japan, conditions also remained weak, particularly in the automotive sector, as a result of the impact of the lockdowns in China.」

「In China, lockdowns were implemented in multiple cities, and capital investment related to automation and factory operating rates remained depressed, resulting in extremely difficult conditions.」

「During the current fiscal year, unstable factors affecting overseas business expansion have increased due to the prolonged U.S.-China trade friction and political and economic turmoil in various regions stemming from the situation in Ukraine, among other factors.」

「We leveraged the robust IT, logistics and manufacturing infrastructure and global network of sites that we have built to date to continue supplying customers worldwide on a stable basis while responding to changes in the operating environment, including the impact of COVID-19 and geopolitical risks.」

「By leveraging the strong business foundations in IT, logistics and manufacturing and its global network of locations built to date, and by responding to environmental changes such as the effects of COVID-19 and geopolitical risks,」

「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.」

「In addition, during the current fiscal year, unstable factors affecting overseas business expansion, including the prolonged U.S.-China trade friction, have increased, and deterioration in the performance of customers in affected regions and revisions to capital investment could adversely affect the Group's business results and financial position.」

「During the nine-month period ended, the global economy remained affected by the spread of COVID-19 and U.S.-China trade friction. In the October-December 2020 quarter, China's economic recovery continued, while economic conditions in the Americas, Europe and Asia also began to recover, and capital investment and operating rates in the manufacturing sector entered a moderate recovery trend. In Japan, some industries, including semiconductors, recovered, but demand for full-scale capital investment had not yet recovered. The global manufacturing sector is expected to remain in an uncertain environment going forward due to the effects of COVID-19.」

「Although China showed signs of recovery, the outlook for other regions remained uncertain despite a moderate recovery trend. In the automotive sector in major countries, production was beginning to resume in some regions, but a full recovery in demand had not been achieved.」

「During the first quarter, the global economy was in extremely difficult conditions as the spread of COVID-19 continued to reduce operating rates and depress capital investment in the manufacturing sector. Although manufacturing showed signs of recovery in China, economic conditions in other regions deteriorated sharply from the previous quarter overall, and weak automotive-related demand in major countries also continued.」

「In addition, during the current fiscal year, unstable factors affecting overseas business expansion, including the prolonged U.S.-China trade friction, have increased, and deterioration in the performance of customers in affected regions and revisions to capital investment could adversely affect the Group's business results and financial position.」

「In China and elsewhere, restrictions on manufacturers' capital investment continued amid the prolonged U.S.-China trade friction, while weak automotive-related demand in major countries also persisted.」

「In addition to the continued decline in manufacturers' willingness to invest in capital equipment in China and elsewhere due to the prolonged U.S.-China trade friction, the economy slowed further as demand for automotive-related products declined in major countries.」

「In addition to the continued weakness in smartphone and automobile sales since the previous fiscal year, concerns about escalating U.S.-China trade friction further reduced manufacturers' willingness to invest in capital equipment in all regions except Southeast Asia. In Japan, economic conditions slowed further in response to weaker overseas demand and capital investment, affecting production machinery and automotive-related sectors.」

「In addition, since the start of the fiscal year, unstable factors affecting overseas business expansion, including U.S.-China trade friction, have increased, and deterioration in the performance of customers in affected regions and revisions to capital investment could adversely affect the Group's business results and financial position.」

「During the nine-month period ended, the global and Japanese economies showed signs of slowing as growing concerns about continued trade friction led manufacturers to become even more cautious about capital investment. In China, Asia and the United States, export- and import-related activity deteriorated under the impact of trade friction and other factors, while manufacturing conditions slowed across Europe due in part to weakness in the automotive sector.」

「During the six-month period ended, the global and Japanese economies showed signs of slowing in all regions except the United States, as concerns about trade friction led manufacturers to take a cautious approach to capital investment. In China, export- and import-related activity began to slow under the impact of trade friction, while manufacturing conditions in Asia and Europe were also slowing amid concerns about a deteriorating export environment.」

「During the first quarter, the global and Japanese economies continued to recover moderately overall, despite uncertainty, including the effects of trade issues. In the United States, the economic recovery continued, with employment and capital investment increasing moderately, while moderate recoveries also continued in Asian countries and Europe. In Japan, capital investment remained firm, and corporate earnings and employment conditions improved. In China, where strong capital investment had continued, infrastructure investment began to slow, and concerns arose about the future impact of trade issues.」

「The execution of business plans in each region is significantly affected by political and economic volatility in various locations. If the conditions for the business do not progress as planned, delays in recovering upfront expenditures, such as expenses and capital investments, could adversely affect the Group's business results and financial position.」

「During the cumulative third quarter, there were no material changes in the financial position, operating results or cash flows, including any unusual fluctuations, or in the risks related to the business described in the annual securities report for the previous fiscal year.」

「During the cumulative second quarter, there were no material changes in the financial position, operating results or cash flows, including any unusual fluctuations, or in the risks related to the business described in the annual securities report for the previous fiscal year.」

「During the cumulative first quarter, there were no material changes in the financial position, operating results or cash flows, including any unusual fluctuations, or in the risks related to the business described in the annual securities report for the previous fiscal year.」

「At the same time, the situation requires attention to the effects of uncertainty surrounding overseas economies, including the outlook for future U.S. policy and economic prospects in China and emerging Asian economies, as well as volatility in financial and capital markets.」

「The increasing uncertainty surrounding overseas economies is a concern that could weigh on Japan's economy, and the situation requires attention to the effects of volatility in financial and capital markets, among other factors.」

「During the cumulative first quarter, there were no material changes in the financial position, operating results or cash flows, including any unusual fluctuations, or in the risks related to the business described in the annual securities report for the previous fiscal year.」

「The execution of business plans in each region may be materially affected by political and economic fluctuations and other factors. If various business conditions do not progress as planned, delays in recovering upfront expenditures such as expenses and capital investment may adversely affect the performance and financial condition of our group.」