Risk Information

The principal risks that may materially affect the financial condition, operating results, or cash flows of the Konica Minolta Group (the “Group”) are described below. These risks are not necessarily exhaustive, and the Group may in the future be affected by other risks that we do not anticipate or consider material.
All forward-looking statements are based on information available to and judgments made by the Group as of March 31, 2026.

1. Risks Related to Economic Conditions

1) Economic Trends and Market Environment

The Group provides MFPs, digital printing systems, healthcare equipment, measuring instruments, optical materials, display materials, and related services to customers in countries and regions around the world.
These business activities are affected by global economic conditions as well as economic and geopolitical conditions in specific countries and regions.
If prolonged inflation, economic recession caused by monetary tightening in major markets, or the escalation of geopolitical situations such as those in Ukraine or the Middle East were to restrict or halt economic activity in those regions, customer investment may decline and personal consumption may weaken, which could adversely affect the Group’s operating results and financial position.
Furthermore, if unforeseen changes in government policies, legal systems, or regulations occur in countries or regions where the Group operates, business activities may be disrupted and the Group’s operating results may be adversely affected.

2) Exchange Rate Fluctuation

As indicated by the high percentage of overseas revenue, the Group conducts its business activities globally and is significantly affected by exchange rate fluctuations. There are also risks arising from fluctuations in the yen value of the Group’s assets and liabilities denominated in foreign currencies, as well as translation differences relating to foreign operations. With regard to the euro, if the exchange rate fluctuates by ¥1 against the yen in the direction of yen depreciation, increased earnings in Europe would have a positive impact on operating profit of approximately ¥0.5 billion. Similarly, if the renminbi depreciates by ¥1 against the yen, increased earnings in China would have a positive impact on operating profit of approximately ¥1.0 billion. On the other hand, with respect to the U.S. dollar, if the yen depreciates by ¥1, operating profit would be negatively affected by approximately ¥0.1 billion due to increased procurement and manufacturing costs.

2. Risks Related to Business Activities

1) Risks Related to Environmental Changes of Printing in Digital Workplace Business

The shift from paper-based information sharing to digital devices such as tablets and smartphones continues to progress in both developed and emerging markets, and information sharing based on digital devices is becoming increasingly widespread.
Furthermore, remote work and hybrid work, which became widespread in response to the COVID-19 pandemic, together with the growing adoption of generative AI and cloud-based services, have established work processes that do not rely on paper. In addition, the rapid expansion of AI agents is expected to further accelerate fully digital workflows, resulting in a structural decline in office printing demand over the medium term.
According to International Data Corporation (IDC), total global electrophotographic print volume in 2029 is expected to decline by nearly 30% compared with 2024. While color print volumes, which are a focus area for the Group, are expected to remain at 83.3% of 2024 levels, monochrome print volumes are forecast to decline to 68.9% of 2024 levels. Although there are someindications that the pace of decline in print volumes is moderating and may eventually stabilize, the Group continues to regard a greater-than-expected decrease in print demand over the medium term as a significant risk. Under such circumstances, failure to respond promptly to changes in customer behavior could adversely affect the Group’s operating results.

2) Regulations in Each Country and Region

Many of the Group's business activities are conducted outside Japan, including in North America, Europe, and Asian countries, and are therefore subject to legislation, regulations, and approval procedures specific to each country and region.
We continue to pay close attention to the imposition of tariffs by the United States and the responses of other countries, particularly trends in economic measures such as export controls on technologies between the United States and China. However, if new regulations or changes to existing regulations are introduced by governments or international frameworks, including taxation, import/export controls, currency regulations, personal information protection regulations, digital tariffs, and other rules, costs may be incurred to ensure compliance and business activities may be adversely affected. In particular, prolonged U.S.-China tensions, the strengthening of economic security policies, and export controls on strategic resources such as rare earth materials may constrain the procurement of materials and production activities.
In addition, regulations relating to personal information protection and generative AI are being strengthened in many countries through legislation and enforcement measures, including bills regulating targeted advertising by major technology companies, the European GDPR, and the European AI Act. These developments may significantly affect businesses promoted by the Group.
Furthermore, if an unexpected state of war or similar event occurs in a major country and sanctions are imposed, the Group may face unexpected changes in legislation, regulations, and approval procedures. In particular, the Group's Healthcare Unit is affected by healthcare systems and licensing procedures in the countries where it operates. If healthcare reforms or other developments lead to large-scale and unforeseen changes in healthcare policies, and if the Group is unable to respond promptly, its operating results may be adversely affected.

3) Next-generation technological change

The Group's business environment may be significantly affected by global mid- to long-term trends, including the rapid evolution and adoption of AI technologies such as generative AI and physical AI, as well as the strengthening of environmental regulations.
Responding effectively to these external environmental changes and continuing technological innovation ahead of competitors is an important source of competitive advantage for the Group. However, competitors may develop and commercialize similar or alternative technologies ahead of us. Accordingly, if we fail to identify innovative technologies capable of creating a competitive advantage from a global and broad perspective and are unable to bring such technologies to market quickly and flexibly, the Group's operating results may be adversely affected, including the possible loss of its market position over an extended period.

4) Transition to New Products

In the business fields in which the Group operates, customers may choose products and services other than those offered by the Group from two perspectives: comparison with upgraded products and services offered by competitors, and comparison with new products and services that may fundamentally transform existing markets and business models. As a result, the risk associated with transitions to new products and services always exists.
The former risk may arise not only from the addition of individual services and functions, but also from the introduction of products and services that fundamentally transform the customer experience and raise customer expectations and evaluation criteria.
The latter may arise from disruptive technologies and changes in business models driven by evolving social trends.

5) Collaboration with Other Companies, and Acquisitions, etc.

The Group promotes collaboration with other companies, capital alliances, acquisitions, and divestitures from the perspective of strengthening competitiveness and improving operational efficiency.
As a result of acquisitions and similar transactions, the Group records goodwill and intangible assets and conducts periodic impairment testing. If future cash flows associated with acquired businesses are expected to decline due to changes in the business environment, impairment losses may be recognized, which could adversely affect the Group's operating results and financial position.

6) Procurement, and Production, etc.

In the Group's core businesses, including the Digital Workplace Business, Professional Print Business, and Industry Business, we continue manufacturing activities both in Japan and overseas in order to strengthen cost competitiveness and ensure timely product supply to the market. As our production activities are conducted globally, the possibility of unpredictable events affecting our operations continues to increase. These include changes in laws and regulations, labor policies, trade policies, import and export regulations, tax systems, cybersecurity incidents, environmental regulations, and human rights and environmental due diligence requirements, as well as geopolitical risks arising from armed conflicts and heightened international tensions. In particular, in the United States, changes to tariff policies introduced since 2025 continue to be reviewed with respect to covered products and applicable conditions. These changes may affect procurement costs, supply chain design, price competitiveness, and profitability.
In addition, instability in major maritime transportation routes resulting from the situations in Ukraine and the Middle East, tighter export controls associated with U.S.-China tensions, and supply constraints affecting critical minerals, electronic components, crude oil, and other resources may lead to higher crude oil prices, difficulties in procuring parts and materials, extended transportation lead times, and increased logistics costs. Furthermore, prices of metal materials, petrochemical products, electronic components, rare earth materials, and other key resources are highly volatile, and rising energy and electricity costs could further increase overall production expenses. As a result of these factors, the stability of product supply, production efficiency, inventory management, and the Group's operating results may be adversely affected.
The Group procures specific products, parts, materials, and energy resources from global suppliers. However, if supply is interrupted or delayed because of quality issues, production shutdowns, natural disasters, labor disputes, power shortages, policy changes, or stricter export licensing requirements, the Group's production and supply capabilities could be significantly affected. In addition, inadequate responses to demands for environmental and human-rights-related transparency and traceability throughout the supply chain may adversely affect customer relationships, responses to regulatory authorities, business opportunities, and brand value.

7) Global Supply Chain

Many of the Group's production and sales activities are conducted outside Japan, and our supply chain is deployed globally.
Accordingly, logistical issues in individual countries and regions may spread across the Group's entire supply chain, causing supply delays and adversely affecting operating results.
The Group maintains significant manufacturing operations in China and ASEAN countries and supplies products globally from these locations. If activity restrictions are imposed in these countries or regions due to a new pandemic or similar event, congestion at ports and airports and delays in cargo handling operations may disrupt logistics and hinder stable product supply to sales bases, thereby adversely affecting the Group's operating results.
In major export destinations in Europe and North America, strikes resulting from prolonged labor negotiations at ports, extended lead times caused by navigational restrictions in the Suez Canal and rerouting via the Cape of Good Hope, geopolitical instability in the Middle East, deteriorating conditions in maritime transportation markets, and persistently high container freight rates may all negatively affect logistics operations.
Furthermore, U.S. tariff policies and port-entry fee measures targeting Chinese-built vessels may worsen the balance between shipping capacity and transportation demand, resulting in higher freight costs. If these factors lead to increased logistics expenses, inventory shortages at sales bases, or delayed deliveries to customers, the Group may lose sales opportunities and experience adverse effects on operating results.
In Japan, the worsening shortage of truck drivers following the implementation of work-style reform legislation and rising fuel prices associated with geopolitical instability in the Middle East could result in longer supply lead times and higher logistics costs, which may adversely affect the Group's operating results.

8) Responsibilities for Products and Quality

The Group has established rigorous quality assurance systems at its domestic and overseas Group companies and manufacturing partners in order to provide customers with products and services offering high performance and reliability.
In the unlikely event that defects occur in the Group's products or services, the Group may incur liability for damages arising from such defects, as well as substantial costs associated with corrective actions.
Furthermore, such issues could damage the corporate brand and product brands and adversely affect the Group's operating results.

3. Other Risks

1) Human Rights

The Group conducts business globally and procures parts and materials from suppliers around the world. Within such global supply chains, regions such as East Asia and Southeast Asia are considered to be relatively more susceptible to human rights issues, including forced labor and child labor, due to structural factors such as the concentration of labor-intensive industries, the presence of migrant workers, and differences in the operation and enforcement of labor-related laws and regulations. Certain portions of the Group’s supply chain are also located in these regions.
If such human rights issues become apparent in the supply chain, the Group may face social criticism, which could lead to a decline in its stock price due to a loss of investor confidence, as well as the loss of sales opportunities due to an inability to meet customer requirements. As a result, the Group’s operating results may be adversely affected.
In addition, based on the adoption of the “Guiding Principles on Business and Human Rights” by the United Nations Human Rights Council, countries around the world are advancing the development of legislation to respect human rights. For example, in addition to the Uyghur Forced Labor Prevention Act in the United States and Germany’s Act on Corporate Due Diligence Obligations in Supply Chains, the EU has decided to enforce the Corporate Sustainability Due Diligence Directive (CSDDD) and the Forced Labor Product Prohibition Regulation, and regulatory strengthening in various countries is accelerating.
If the Group is unable to appropriately comply with these laws and regulations, it may be subject to import bans and substantial fines.

2) Severe Earthquakes, Natural Disasters, Infectious Diseases, etc.

The Group has research and development, procurement, production, sales, and other bases in countries around the world, and conducts business activities globally. If massive earthquakes, fires, large-scale natural disasters associated with climate change such as typhoons, floods, and forest fires, major outbreaks of infectious diseases, or acts of war, terrorism, cyber-attacks, or similar events occur, the Group’s facilities and other assets may be damaged. This could result in temporary operational shutdowns and delays in production and shipments, which may adversely affect the Group’s operating results.
In particular, in the event of a massive earthquake occurring directly beneath the Tokyo metropolitan area or along the Nankai Trough, it is considered possible that damage could occur on a scale exceeding assumptions.
The Group continues to promote disaster prevention measures and business continuity management. However, if such events occur, the continuation of the Group’s business activities may be affected by functional stoppages at its sites, damage to facilities, suspension of electricity, water, gas, or other supplies, shutdowns of public transportation or communication methods, and damage to the supply chain, resulting in suspension of service provision to customers or product shipments.

3) Climate Change and Environmental Regulations

In the event of a global transition to a low-carbon society, environmental laws and regulations may become stricter, resulting in additional obligations and costs. Increased stakeholder demand for renewable energy procurement and net-zero greenhouse gas emissions may lead to increased procurement and manufacturing costs. A decrease in sales due to lower demand for paper output in offices, emissions regulations applicable to the Group’s sites, and increased manufacturing costs resulting from the use of alternatives to fossil fuels and fossil resources may also adversely affect the Group’s operating results.
On the other hand, if the physical impacts of climate change become apparent around the world, more frequent forest fires and large-scale droughts in areas with high water stress could destabilize the procurement of raw materials, leading to lower earnings due to reduced production capacity. If large-scale or localized storm or flood damage occurs, the supply of components may be restricted or temporarily suspended, which could cause temporary shutdowns at the Group’s sites and suppliers and delay production and shipments.
In addition, in the transition to a circular economy, the mandatory use of recycled materials may increase procurement, manufacturing, and product costs, while obligations relating to the recycling and remanufacturing of used products may increase product development costs.
Furthermore, the Group is subject to various environmental laws and regulations relating to air pollution, water pollution, removal of hazardous substances, waste disposal, chemical substances contained in products, product recycling, containers and packaging, and soil and groundwater contamination. The Group invests the necessary management resources to comply with these laws and regulations. However, it may incur costs or liabilities associated with environmental responsibilities relating to its current and past production, development, and sales activities.

4) Intellectual Property Rights

The Group accumulates a great deal of technologies and know-how through the development of products and services and strives to acquire intellectual property rights to protect them. However, in some countries and regions, systems for protecting intellectual property rights and their proper operation may be insufficient, and the Group may be unable to prevent third parties from using the Group’s intellectual property rights without authorization to manufacture and sell similar products.
In addition, the Group develops products and services with due care not to infringe on the intellectual property rights of other companies. However, due to differences in views or other factors, the Group may be alleged to have infringed the intellectual property rights of other companies, which could hinder the development or sale of its products and services or result in substantial liability for damages. Furthermore, the use of intellectual property rights currently licensed to the Group by third parties may be discontinued in the future or changed to unreasonable terms.

5) Retaining Human Resources

The Group recognizes that the continuous development and acquisition of core human resources is essential to realizing its future vision. On the other hand, as the Group has business foundations in regions where populations are aging, including Japan, the risk of losing technical expertise due to the aging of “human resources involved in core technologies” and “production technology and skilled human resources who support manufacturing,” which are indispensable to realizing the Group’s future vision, is increasing.

6) Information Security

Cyber-attacks targeting companies are becoming increasingly advanced and sophisticated. In particular, there have been many cases in Japan and overseas in which attackers steal user account credentials, infiltrate centrally managed internal networks, seize administrator privileges, and conduct unauthorized operations. In addition, attacks exploiting vulnerabilities in various IT devices and software are also increasing, and risks arising from cyber-attacks are expanding.
If administrator privileges were to be seized in the Group through a cyber-attack, confidential information relating to technology information, trade secrets, personnel information, and other matters could be leaked to third parties through unauthorized operations and used for unauthorized purposes or trading. If such a serious information security incident occurs, it may adversely affect the Group’s operating results and social credibility.