This page gives a list of factors that may have a material impact on the decisions of investors, among the matters described in the annual securities report regarding the state of the business and financial information.

This page contains forward-looking statements, which are based on the Group's assessment made as of the end of the 99th consolidated fiscal year.

  1. Reliance on the iron and steel business in our consolidated financial results
    The Group's iron and steel business accounted for 64.2% of sales in the 99th consolidated fiscal year. Many of its clients are in the parts industry for commercial vehicles and related automobiles, and so trends in this field have an impact that cannot be overstated.

Changes in segment sales

(Note) The Group has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the 99th consolidated fiscal year. Accordingly, the figures for sales for the 99th consolidated fiscal year are those after the application of the said accounting standards, etc. and the rate of change compared to the previous fiscal year is not stated.

  1. Impact from changes in commodity markets on products and raw materials
    The prices of the core products and raw materials used in the Group's iron and steel, non-ferrous metals, and electronic materials businesses fluctuate according to the commodity markets in Japan and overseas. We generally handle these fluctuations through a system for hedging risks based on discussions with users and manufacturers, as well as through other measures such as cost reductions. However, the impact of price fluctuations cannot be overstated. We also ensure that risk can be reasonably addressed with regard to procurement issues, overstocking, and other potential areas of risk in the distribution process, by promptly analyzing the quantities used by users and produced by manufacturers, along with other types of information.
  2. Risk of foreign exchange rate fluctuations
    The Group's businesses involve import and export transactions based on foreign currencies, and we expect to engage in a larger proportion of these transactions as we continue to expand our business overseas. Foreign-currency-based transactions pose a risk with the fluctuation of exchange rates, whereby the resulting value in yen after conversion may have an impact on the Group's operating results and financial condition. In response to these circumstances, the Group mitigates this risk by buying forward contracts for individual transactions so as to ensure that the profits are determined.
  3. Risk of stock price fluctuations
    The Group holds a stock portfolio mainly consisting of shares in our suppliers and clients, and these are subject to stock price fluctuations. We take measures to mitigate this risk by regularly adjusting stock holdings in consideration of the advantage that holding said stock brings to business transactions, as well as our dividend yield and other matters. Nevertheless, stock price fluctuations may affect the Group's operating results and financial condition.
  4. Risk of interest rate fluctuations
    The Group mitigates the risk of fluctuations in loan interest rates by using interest rate swap contracts. However, rapid fluctuations in interest rates may affect the Group's operating results and financial condition.
  5. Credit risk
    Transactions conducted by the Group pose a credit risk with respect to accounts receivable from suppliers and clients in Japan and overseas. We carefully carry out credit management based on our Credit Limit Management Rules, and for transactions of large amounts, based on our Credit and Investment Committee Rules and after discussion within the Credit and Investment Committee. However, if the credit status of our suppliers and clients deteriorates and they cannot fulfil their obligations to the Group, this may affect the Group's operating results and financial condition.
  6. Business investment risk
    The Group works to develop new businesses and to expand and strengthen existing businesses by establishing new companies and by investing in existing companies in Japan and overseas, among other efforts. We are extremely cautious about these investments and we review them based on our internal rules and after discussion within the Credit and Investment Committee. However, if companies that we invest in suffer a drop in value, this may affect the Group's operating results and financial condition.
  7. Risk of natural disasters
    Natural disasters, accidents, the spread of infectious diseases, and other similar factors can result in disorder within society or other forms of turbulence that could interrupt the business activities of the Group and its main suppliers and clients. Such circumstances may affect the Group's operating results and financial condition.
  8. Risks related to climate change
    An introduction of a carbon tax or further tightening of other environment related laws and regulations due to the impact of climate change in the Group’s business environment, in which initiatives to reduce greenhouse gases, which are considered a factor in global climate change, have been taken, could incur even more costs. Such circumstances may affect the Group's operating results and financial condition.