Business Risks (Updated on June 16, 2026)

Approach to risk management

The Group defines “risks” as uncertainties that could negatively affect the realization of the corporate vision set out in Vision 2030 and the medium-term business plan Value UpX, as well as the businesses in which the Group is engaged, and conducts risk management. Through proactive risk management initiatives, the Group aims not only to generate stable earnings as a company, but also to further enhance and develop its corporate value by fulfilling its social responsibilities.

Material risks of the Group

The Risk Management Committee, which is established by the Board of Directors, comprehensively manages risks across the Group. The Risk Management Committee selects material risks through the following process.

• (i) Based on the risk matrix diagram, the Committee reviews risks across the Group from a broad and comprehensive perspective and identifies material risk items.
• (ii) Based on discussions by the Board of Directors and the Risk Management Committee, the Committee narrows these down to highly material items.
• (iii) The Committee ensures objectivity by referring to a survey, mainly of listed companies, conducted by a risk consulting firm.

Risk matrix diagram

To comprehensively identify and classify risks, the Group has rolled out a risk matrix diagram across the entire Group based on two axes—the four types of risks (vertical axis) and the value chain (horizontal axis)—and each department and Group company conducts a broad review of risks.

Material risks of the Group for FY2026

The Risk Management Committee has selected 13 items from the risk matrix diagram. Details of the material risks and corresponding responses are as follows. The risk of “Heightening tensions in the Middle East” is presented separately from the 13 items because the Group considers it to have the potential to affect the Group across business functions and will continue to monitor it as a separately identified risk.

Risk matrix diagram

Some of the specific initiatives and results described below under “Addressing such risks” relate to the period through the end of FY2025.

Description of material risks

Indirect impacts through crude oil, logistics, and foreign exchange could spread across the Group’s overall management and entire supply chain.

Addressing such risks

Relevant departments and Group companies, as well as bodies such as the Board of Corporate Officers and the Risk Management Committee, will each take the lead in continuously monitoring impacts and risks.

Description of material risks

Heightened public concern over food quality and safety has created the need for even stricter quality control systems. If quality issues arise, the Group’s credibility, business performance, and financial position could be affected.

Addressing such risks

The Quality Management Committee established by the Board of Corporate Officers deliberates on and checks the implementation of policies and measures for quality assurance across the Group. The Group’s major plants in Japan have obtained ISO 9001 and FSSC 22000 certification, the latter being an international standard for food safety management, and the Group has established a rigorous quality assurance system, including GMP certification for certain manufacturing processes.

Description of material risks

If human rights issues arise at the Group or its suppliers, or if the Group engages in procurement practices that raise human rights concerns, the Group’s credibility, business performance, and financial position could be affected.

Addressing such risks

In FY2025, we conducted SAQ surveys and in-person surveys of suppliers in the Company’s logistics and materials areas. We also provided human rights training at the Company and Group companies and worked to promote the rollout and introduction of human rights due diligence frameworks at Group companies.

In FY2026, we will conduct SAQ surveys of the Company’s contract manufacturers, raw material suppliers, and other business partners, work to promote respect for human rights across the Group in coordination with overseas Group companies, and advance ongoing human rights due diligence through the PDCA cycle.

Description of material risks

The Group operates not only in Japan but also in countries and regions including Southeast Asia and Europe. The following events pose risks, particularly in the development of overseas businesses.

• i. Unexpected enactment, revision, or abolition of laws and regulations
• ii. Unexpected political or economic developments
• iii. Social turmoil and other geopolitical risks caused by terrorism, conflict, or similar events

If these events occur, they could affect the Group’s business performance and financial position.

Addressing such risks

To minimize these risks, the Group will endeavor to collect information and respond accurately and promptly under its crisis management framework by coordinating with Group companies in each country or region.

Description of material risks

The Group recognizes that, in addition to earthquakes and tsunamis, risks from storm and flood damage caused by extreme weather have been increasing year by year. If these risks affect employee safety or damage manufacturing facilities at production sites, logistics facilities, infrastructure, or other assets, disruptions at key points in the supply chain could hinder stable product supply and affect the Group’s business performance and financial position.

Addressing such risks

As measures to be taken in the event of an earthquake, tsunami, or other disaster, the Group has established a safety confirmation system to confirm the safety of employees and others, as well as a business continuity plan (BCP), and reviews them as necessary to enhance their effectiveness. At the same time, the Group is reinforcing facilities against earthquakes to ensure the safety of employees and others and strengthen the foundation of its production system, while also strengthening earthquake countermeasures for embankments and power procurement.

We regularly conduct comprehensive disaster readiness drills and training, while recognizing the mitigation of risks from storm and flood damage caused by extreme weather events in recent years as a critical challenge and promoting disaster reduction initiatives.

The Group also continuously assesses events with impacts that could exceed these measures and strives to minimize damage as much as possible, maintain insurance coverage, and reduce the impact on its business performance and financial position.

Description of material risks

If a large-scale accident such as a fire or explosion occurs, it could disrupt the stable supply of products and affect the Group’s credibility, business performance, and financial position.

Addressing such risks

The Group has appointed an officer in charge of safety management and disaster prevention who is responsible for overseeing company-wide safety and disaster-prevention management, and has established a company-wide disaster prevention system centered on the Safety Management and Disaster Prevention Committee, as well as workplace disaster prevention systems.

Furthermore, the Group specifies emergency response systems and regularly conducts comprehensive disaster prevention drills and training, thereby striving to prevent accidents, while also preparing for any unforeseen occurrences.

Through these initiatives and by maintaining insurance coverage, the Group strives to reduce the impact on its business performance and financial position.

Description of material risks

Personnel with diverse values and expertise are essential to achieving the vision set out in The Nisshin OilliO Group Vision 2030, and a shortage of such personnel would result in diminished competitiveness.

The Group also recognizes that a shortage of personnel responsible for activities at manufacturing and logistics sites, in particular, would pose a major business continuity risk in terms of consistently providing safe and reliable products.

In addition, each employee’s health is the most important factor for enabling employees to lead fulfilling personal and professional lives and continue to demonstrate their abilities enthusiastically within the Group. Employee health risks could affect productivity and other aspects of operations.

Addressing such risks

The Group is working to secure and strengthen the human resources it needs by focusing on creating a vibrant organization that generates innovation, including by respecting employee diversity, expanding investment in human resource development programs that enable each individual to grow, appointing external talent as necessary, empowering female employees, and promoting health management.

To consistently provide safe and reliable products, the Group is working to secure and retain human resources through ongoing recruitment and training, active use of remote work, and optimized working conditions, while also streamlining operations and saving labor through the use of IoT, AI, and other technologies.

The Group has established a framework for promoting health management under which top management has ultimate responsibility, and promotes various health management initiatives aimed at improving employees’ physical and mental health, job satisfaction, and productivity.

Description of material risks

Based on The Nisshin OilliO Group Code of Conduct, the Group has established an internal control system and strives to ensure compliance with laws, regulations, and other compliance requirements throughout the Group. Nevertheless, if the Group’s officers or employees violate laws, regulations, or other compliance requirements, the Group’s credibility, business performance, and financial position could be affected.

Addressing such risks

The Group strives to promote understanding and awareness of The Nisshin OilliO Group Code of Conduct and works to raise awareness of compliance with laws, regulations, and other compliance requirements throughout the Group through measures such as training.

In particular, in FY2025 the Group comprehensively reviewed the operation of its annual compliance monitoring program, strengthened its issue-identification function, and reflects the issues identified through this process in its measures to ensure compliance with laws, regulations, and other compliance requirements.

Description of material risks

The Group has established information systems to ensure the smooth and efficient execution of business operations, including production, logistics, and sales management, as well as finance and accounting. The Group also retains important business information, confidential information obtained in the course of business, and personal information. If major disasters, power outages, computer viruses, cyberattacks, or other events cause system outages, operational delays, information leaks, or similar incidents, the Group could lose the trust of customers and the market, which could affect its business performance and financial position.

Addressing such risks

To ensure the stable operation and reliability of its information systems and prevent information leaks, the Group has introduced security tools, conducts employee education and training, and works to prevent risks from materializing.

The Group has also put in place response manuals and a communication framework in preparation for security incidents.

The Information Security Committee receives regular reports on information security measures and conducts evaluations and reviews.

Description of material risks

Among the raw materials required for the Group’s products, the Oil, Fat & Meal and Processed Food & Materials business in particular procures major raw materials such as soybeans, rapeseed, and cacao, as well as raw oils and fats including olive oil and palm oil. If the procurement environment for these materials deteriorates and the Group is unable to procure sufficient quantities or secure raw materials that meet its quality and safety requirements, stable product supply could be exposed to significant risks, which could affect the Group’s credibility, business performance, and financial position.

Uncertainty over food supply and demand continues to increase each year due to factors such as global population growth and frequent extreme weather events around the world. In addition, policy trends in raw material producing countries and rising geopolitical risks could make supplies unstable, and the Group must pay close attention to these risks.

Addressing such risks

In order to address changes in the procurement environment for raw materials brought about by factors such as the impact of extreme weather (e.g., droughts), policy trends in production countries, and rising geopolitical risks, the Group strives to ensure stable procurement by diversifying the production countries and suppliers of raw materials.

Particularly when trends in the procurement environment are difficult to predict, the Group strives to procure materials and secure inventories based on demand through future procurement periods.

Moreover, with the aim of procuring safe raw materials, we conduct safety assessments involving analysis and on-site visits when purchasing raw materials from new production regions and suppliers. In addition, with respect to raw materials purchased through existing channels, we regularly conduct safety assessments and collect information on their origins, thereby securing safe and reliable raw materials.

Description of material risks

Consumer needs have been changing extremely rapidly in recent years and have become increasingly diverse, and they may change before the Group identifies them. Even if the Group identifies those needs, it may be unable to respond to them, which could affect the Group’s business performance and financial position.

Addressing such risks

The Group has established a system to identify changes in consumer needs at an early stage through measures such as consumer questionnaires, regular analysis of market conditions, and internal sharing of the results. In FY2025, we developed products while capturing changes in consumer sentiment, including heightened cost-consciousness due to rising prices and changes in the amount of edible oil used in cooking (e.g., Nisshin Canola Oil Half-Use 800 g).

We also worked to develop dedicated products that support rice cooking and seasoning, with the aim of improving the quality of prepared foods offered in the ready-made meal and food service sectors and enhancing the eating experience of final products.

Description of material risks

Measures to address global warming and marine plastic waste have become pressing issues, and an inability to address these challenges could adversely affect the Group’s credibility, business performance, and financial position.

Addressing such risks

Because the Group’s business is based on plant resources, the Group views the protection of the global environment and resources as essential to the sustainability of its business, and has undertaken the following initiatives toward the realization of a decarbonized, recycling-oriented society.

Addressing climate change

• • Switched all electricity used at the Sakai Plant to renewable electricity.
• • Started operation of a high-efficiency gas turbine cogeneration system compatible with hydrogen co-firing at the Yokohama Isogo Complex.

Reducing the use of plastic containers and packaging

• • Began using recycled materials produced through horizontal recycling (bottle-to-bottle) from used oil-containing PET bottles in certain products for the first time in Japan. Recycled materials made from oil-containing PET bottles generated at factories are used in certain 800 g PET bottle products, with sales launched sequentially from March 2026.

Description of material risks

In the Oil, Fat & Meal and Processed Food & Materials business, the Group imports all of its raw materials from overseas, including soybeans, rapeseed, and cacao. It has also extended its overseas operations in Malaysia, elsewhere in Southeast Asia, and Europe. As a result, the Group is exposed to exchange rate fluctuation risks associated with raw material costs, sales denominated in foreign currencies, and borrowings denominated in foreign currencies, and exchange rate fluctuations could affect its business performance and financial position.

Regarding raw materials, in addition to market volatility risk related to international raw material prices, the Group is exposed to volatility in transportation and other costs that could result from surging crude oil prices. Raw material prices could potentially affect the Group’s business performance and financial position given that they constitute a key component of its cost structure.

Addressing such risks

The Group addresses these risks by flexibly arranging forward exchange contracts and hedging transactions using futures markets, in accordance with the Management Rules for Derivatives, Commodity Futures Transactions, etc. and other internal rules. With regard to hedging transactions, the Board of Corporate Officers shares information and monitors their status once a quarter.

Furthermore, the Group works to curb the impact of price fluctuations by optimizing selling prices in line with raw material prices and reducing manufacturing costs and other expenses.

Description of material risks

Sales of the Oil, Fat & Meal business are especially prone to changes in product market conditions in Japan and overseas. Domestic selling prices of oils, fats, and meal products are generally linked to international market conditions.

In addition, trends with respect to product imports from overseas could potentially affect sales prices in Japan. If fluctuations in product market conditions in Japan and overseas materialize, the Group’s business performance and financial position could be affected.

Addressing such risks

The Group strives to sell its products at appropriate prices that reflect costs and other factors in response to fluctuations in product market conditions in Japan and overseas.

The Group is also working to expand sales of high-value-added products and gradually increase their sales mix. Although time lags may arise between changes in the cost of goods sold and changes in selling prices, the Group strives to reduce the impact of this risk on its business performance.

The Board of Corporate Officers monitors the progress of the business plan monthly and links the results to the implementation of necessary measures.