ORIX Corporation American Depositary Shares

Thank you for joining Oryx Corporation for annual results for the Council of the Fiscal Year ended March 31st, 2025, despite your very busy schedule. I'll be the master of ceremony. My name is Anna Kane from IR and Sustainability Department. Thank you for this opportunity. The attendee at today's conference is Member of the Board, Representative Executive Officer, President and CEO I owe Hidetake Takahashi and also Kazuki Yamamoto, operating officer responsible for investor relations. Now, Takahashi Yamamoto will give presentation followed by a Q&A session. The briefing session is scheduled to last approximately one hour. I would like to hand over to Mr. Yamamoto. Thank you.

I am Yamamoto from Oryx. So I would like to now report on the consolidated net income for Oryx for 25 March end. So please refer to page three to begin with. So consolidated net income for the fiscal year ending March 2025 was 351.6 billion yen, which was announced at 3.30. Although it fell short by 9.8% compared to the forecast of 390 billion yen, but the NAIF income was up 2% from the previous year's result of 346.1 billion yen. OREX once again achieved record high profit. The full-year ROE was 8.8%. At the end of FY25 March end, The market had changed significantly with increased uncertainty due to disruptions in the global supply chain and fluctuations in resource prices. As a result, we reviewed future prospects for our businesses, and after considering these uncertainties, we recorded total impairments of 53.1 billion yen on a pre-tax basis for some assets and investments. On the other hand, many... Segments, including PEN concession, aircraft and ships, and corporate financial services improved their performance, leading to another record high profit for the full year. On the next page, we will explain pre-tax profit and segment profit based on the three categories. Slide 4. If you could refer to the bottom row of the table below, compared to the net income of 351.6 billion yen mentioned earlier, pre-tax profit was 480.5 billion yen, which is 10.5 billion yen more than the same period last year. The profit from the stand segments, excluding headquarters costs, came at 544.7 billion yen. Now I will explain the breakdown using the three categories. First profit from the finance category was 176.3 billion yen. Last year, we booked a gain from the sales of Oryx Credit. So excluding that impact, profits were higher. The main factors behind the profit increased were strong investment income from Oryx Life Insurance and the U.S. private credit businesses. The profit from the operation category was 200.2 billion yen. Profit declined year over year, mainly due to our conservative revision of plans, more than the conservative plan of FY22 March 1 for the biomass coal-fired power plants, that resulted in an impairment of approximately 20 billion yen. On the other hand, contributions from Kansai Street Airports, Robeco and Santoku Shipping resulted in higher profits excluding impairments. Regarding the investments category, segment profits were on 168.2 billion yen, a significant increase of 56.2 billion yen compared to the same period last year. Two exits were realized in the domestic PE business thanks to contributions from significant improvements in profits at investees and investment gains in the U.S. and real estate sectors. Segment and increase profits from equity method investees like Avalon. Next, we will explain segment profit in terms of base profit and investment gains. So please proceed to the next page. Out of total segment profits of 544.7 billion, the so-called base profit was 457.1 billion yen, a 5% increase from the previous year. Investment gains net of impairments were 87.6 billion yen. Base profits exceeded 100 billion yen in all four quarters for the first time in FY25 March end. The overall operations and investment portfolio contributed solidly to profits supported by the recovery from the pandemic in band demand and the steady recovery of domestic economic activities. Through value creation in our strong domestic PE investment ships, aircraft leasing, and European asset management businesses, and in businesses expected to grow further, we will continue to drive sustainable base profit growth for the Oryx Group. Additionally, investment gains through capital recycling are one of the pillars for realizing profits in a diversified operating and investment portfolio. In the fourth quarter, investment gains bore a net loss of about 2 billion yen due to impairments exceeding 50 billion yen. However, we were able to record... Gross investment gains exceeding 50 billion yen through PE investment exits in Japan and the U.S., making full-year gross investment gains larger than the same period last year, and second only to the first fiscal year, FY22 margin, when we booked the investment gains on the Yayoi sales. Finally, we will discuss the progress of capital recycling. In the fiscal year ending March 2025, we recorded capital gains of 140.7 billion yen for the full year. The cash inflow from the sales for the full year was about 645 billion yen, while new executions amounted to about 600 billion yen in total. So, So therefore, there was a difference as been indicated. The assets sold were primarily those with strong performance, such as the two domestic PE investees listed here, where optimal buyers were selected for the firms from... both domestic and international bidders. In corporate financial services, the selection of business succession targets progressed in the micro-business succession M&A project faster than the past several years, resulting in three exits. Additionally, there was a significant cash inflow from the sales of a large mouth-type purpose facility in Tokyo, which had been a long-term holding while its value was being enhanced. These cash inflows were used for new investments focused on the domestic real estate, domestic PE, and aircraft following the usual IRR focus selection process. Among these, we proactively invested in aircraft based on the assumption that the supply and demand for aircraft will remain tight in the future. For this fiscal year, we will continue to execute new investment while striking the right balance between recouping investment through capital recycling. We will remain flexible in making a decision if we think the deal will contribute to OREX's future growth. So you can see the pipeline on the following page. Now, vertical axis representing investment amount and the horizontal axis representing the time required from investment execution to earnings contribution so at rx from the time of investment we would try to swiftly try to generate the profit from like ships and aircraft and also in addition to private equity investment On a long-term perspective, we will try to make an investment that would allow us to enjoy a capital gain for many years to come. So we will try to identify investment that benefits from inflationary environment and also proceed with execution if we can enjoy better terms and conditions. terms and conditions for the deal. Now, so we have roughly about, as you can see, more than 2 trillion yen of investment, and that will remain to be unchanged. And this concludes my presentation, and I would like to hand over to President Takahashi, who will present on our forecast for the new year.

So good afternoon.

So I have been appointed to be the president, the CEO from January of this year. My name is Takahashi and allow me to present from starting from site number eight. So we regret that we were unable to achieve the sales of Greenco announced in January and thus We were unable to meet the full-year forecast net income of 390 billion yen for the fiscal year ending March 2025. However, we achieved a record net income of 351.6 billion yen and steady increased base profits despite recording significant impairment due to our conservative forecast. So we would like to continue to grow the base profit in a steady manner going forward. And I think we do perceive this to be our great achievement this year, the last year. Over a successful year, dividend will be 120.01 yen per share, following our dividend policy of a payout ratio of 39% of the previous year's dividend, whichever is higher. next for fi 26 margin we forecast a third consecutive year of record net income of 380 billion yen so we will maintain our current dividend policy and assuming net income 380 billion yen fi 26 march and dps will be 132 yen We will also increase the scale of share buybacks to 100 billion yen, double the usual amount of 50 billion yen. This is aimed at helping to steadily improve ROE, our most important management indicator, and this has been resolved at the time of BOD today. So as a result, total shareholder return ratio, including dividend and share buyback, will be 65%. Please see the next page. Next, I will discuss our view of the impact of recent macroeconomic developments on our businesses. We believe the direct impact of so-called Trump tariff is limited, but we need to keep in mind the indirect effects such as possible recession and exchange rate fluctuations. Regarding the possibility of a recession, for example, some existing investments and loan targets in the U.S. and Japan are expected to face rising procurement costs, posing a risk of deteriorating performance. However, such clients account for a limited portion of our portfolio. Additionally, due to deterioration in the investment climate, there is a risk that new investments and exits may be delayed as compared to our plans, and the realization of investment gains overseas may be postponed to the next fiscal year or later. But on the other hand, domestic real estate and the PE are maintaining solid momentum at the present, and we expect to achieve a good amount of investment gains from these areas in the fiscal year ending March 2026. Given the many uncertainties, including geopolitical risks, we believe a cautious approach is necessary for the time being. Meanwhile, during these uncertain times, it is important to conduct the business activities with a focus on enhancing mid- to long-term corporate value and to have disciplined portfolio management. Now, this means replacing assets with low capital efficiency to improve ROEs. At any rate, ROE would have to be improved, and we would exert much of the effort in that regard. Now, despite this business climate, which remains to be uncertain, we believe our FI26 March and net income target, which represents a new record high, is still achievable. Now, please move on to the next slide. Regarding this fiscal year's forecast, we will briefly explain it by breaking it down into three categories. We expect double-digit growth in profits in the operation and investments category and continued stable growth in finance as well. As to the finance, we are focusing on high premium first sector products, targeting corporations and affluent individuals. for the insurance businesses. This should allow us to grow premium income at a pace significantly exceeding that of Japanese competitions. This customer segment is an area where synergies with the corporate financial services can be expected, and we anticipate profit growth through expanded premium income from FY26 March. And also, we should benefit from a diversification of our investment management as well. In operations, tourism-related areas such as airport concessions and aircraft leasing are likely to be the drivers of profit growth. The airport concessions business has completed a major renovation of Terminal 1 at Kansai International Airport in March, expanding international passenger intake capacity by 1.7 times. and preparing for increased passenger traffic due to the Osaka Expo. In investments, we anticipate profit growth through continuous capital recycling in real estate and PE segments by leveraging RX's extensive network and being capable of real estate development from sourcing properties and projects to exits.

Please turn to the next page. Finally, with regard to shareholder returns, previous full-year dividend of 120.1 yen per share was a record high and CAGR of 21% in dividends per share since the fiscal year ending March 2011. And we will continue the dividend policy of having a payout ratio of 39% or the previous year's dividend, which is higher. And based on the forecast net income of 380 billion yen, the dividend forecast for this fiscal year will be 132 yen per share. We intend to continue implementing the shared buybacks. I already mentioned 100 billion yen, but we will do this flexibly to achieve sustainable EPS growth and optimize capital at the same time. Moving on to long term vision and the three year plan. Please skip to page 13. In formulating the new three-year plan, we started with a premise of the Oryx Group's purpose, which was established last year. And based on this, we drew up our goal and targets. And 10 years from now, Oryx's vision for 2035 is to make impact through alternative investments, operations, and business solutions. We will work to achieve an ROE of 15% and a net profit of 1 trillion yen in the fiscal year ending March 2035, 10 years from now. And we also recognize that ROE improvement is OREC's top management priority for a new three-year plan, which starts this fiscal year. We aim to achieve an ROE of 11% in fiscal year ending March 2028, final year of a three-year plan. Please turn to the next page. To realize this long-term vision, we have three focus areas I would like to explain about the growth strategy. So we have pathways, growth and impact. These are the three focus investment areas. And we want to evolve our strength in our two business models, alternative investments and operations and business solutions to achieve a sustainable growth cycle. Business solutions are there in order to solve or address our customers' problems. to pathways the focus is on technological evolution aiming to achieve new areas of impact in the future economy growth focuses on global population growth and the demographic changes supporting sustainable growth in a changing world Impact addresses global warming and limited resources. We're aiming to make a positive impact on these issues. While we already have businesses in these key areas, we intend to further strengthen cross-segment collaboration, combining the strength of each segment expanded over the past decades to develop business at scale in each area. While these two business models are the ones that we have traditionally possessed, the asset value creation model will evolve into an asset management business incorporating third-party capital in each business, transforming into an asset-light business structure. This is our plan. In a model for solving clients' issues, we provide solutions to global clients' challenges, such as a Monday brokerage focused on business succession opportunities within the Japanese market, which has actually grown to a considerable scale. We aim to strengthen our revenue base with asset-light fee-based models. Please turn to the next page. Now I would like to explain about specific measures to achieve our long-term vision. We will implement the three key measures. The first is disciplined portfolio management. Second, sophisticated risk management. And third, new business creation. These are the essence of management for Oryx Group in my own opinion as well. So we want to execute all three without fail and the details can be found on the bottom of the slide. We also believe that disciplined portfolio management is particularly important for improving ROE. As before, we will realize business value through capital recycling moving forward, but we will also visualize the growth potential, capital efficiency, impact on credit ratings of each business and asset at a much finer granularity. This will enable us to optimize and reconfigure the portfolio and improve ROE, which is the most important theme for the management of the group. In addition to enhancing our existing businesses, as you saw in the previous page, we aim for sustainable growth of the bottom line through new businesses centered on the strategic focus areas which was outlined. In the previous page, we will invest management resources to maximize growth in the numerator part of the ROE formula. Please turn to the next page. I would like to explain the ROE targets and initiatives for ROE improvement in our new three-year plan in the three categories of finance, operation, and investments. In finance, we aim for double-digit ROE growth through accumulation of alternative investments and syndication, including addition of third-party funds, selection and concentration within Asia, and the expansion of non-financial revenue through the model of solving clients' issues. In operations, we aim to improve RRE through horizontal rollout of asset management business in real estate, renewable energy, aircrafts and ships, and enhancing services in inbound businesses. We want to improve it to 15%. In the investment category, our aim may fluctuate depending on exits, but we aim to improve our rate to 11% on a multi-year average basis by accelerating capital recycling and forming PE funds. Recently, we announced the sale of Oryx Asset Management and Loan Services Corporation, and we intend to continue optimizing the business portfolio across the three categories without setting aside any area as a secret cow. Our strength is being able to approach sectors and visions from three different angles, finance operations and investments, and our ability to undertake hands-on investment and operations utilizing our expertise in finance, which is our founding business. Over the mid to long term, our portfolio will shift more towards operation and investments. But it is important to maintain abilities in all three, not just categories, but methodologies. Please turn to the next page. Finally, I would like to explain the policy regarding capital allocation and shareholder returns in our new three-year plan. While continuing to maintain an A-credit rating, we will persist with the policy of distributing 39% of net profit as dividends. And for March 26th fiscal year, we have a 100 billion yen share buyback. Looking at the capital recycling, we will be flexibly conducting share buyback to optimize capital and also at the same time grow EPS sustainably. We believe that credit's mission for me is to enhance long-term enterprise value and the stock value. Since EPS growth and RE improvement have high correlation with rising stock prices, I want to reiterate that we will thoroughly focus on capital allocation and portfolio management that emphasizes the growth potential and capital efficiency and impact on credit ratings of each business while optimizing capital to achieve sustainable EPS growth and ROE improvement. This concludes the brief overview of our long-term vision and new three-year plan. Please turn to page 18, and I would like to recap the key objectives once again. We aim for an ROE of 15% and a net profit of 1 trillion yen for the fiscal year ending March 2035 as a management KPI. And there's an interim milestone of ROE of 11% for the fiscal year ending March 2028. This is the most important goal for that new three-year plan. And regarding the 100 trillion yen AUM target in asset management, we aim to achieve this within these three years, and we plan to further expand AUM. That was a quick view on our long-term vision and our new three-year plan. Thank you very much for your kind attention.

Now we are ready for the Q&A session. So please raise your hand. And this is possible online as well. But please do understand that we would prioritize those people who are attending the meeting in person. So should you wish to ask a question online, please press the raise hand button at the bottom of the Zoom screen. And when your name is called out, please unmute yourself and ask questions. We would also like to ask you to state your name and name before asking question. And please refrain from asking more than one question. So please, if you have any questions at all. So to the person at the farthest right on the first row in the venue. I am Watanabe from Daiwa Securities. Thank you very much for your presentation. I would like to ask a question with regard to capital policy. So the buyback is now being doubled to 100 billion yen on page 17 in the orange box. So maybe 150 billion yen or more is expected to be repurchased. So you could be so kind to just to share the idea to the shareholders return as well as that shares repurchase program. So, you know, we have been targeting at achieving double digit ROE. But now we have positioned ROE to be the first and foremost important management target, which means that we need to address both the denominator as well as the numerator in order to improve our ROE. And as for the denominator, we would have to continue to carry out. the shares repurchase program in order to achieve capital efficiency. And also capital recycling, the timing of the investment, we have to strike the right balance in addressing the numerator. So therefore, we would have to carry that out in a very flexible manner. in a short time period, if there was to be, of course, a better opportunity, attractive opportunity for us to gain on the investment that had to be made. But the investment and divestment, there could be some discrepancies. We will not be able to perhaps achieve a good enough balance. So divestment amount may perhaps be in excess of the possible investment. Then we will be able to allocate such amount to shares repurchase. So in any case, we'd like to continue to focus on ROE so far as the management indicator is concerned. And also, you have mentioned about focusing on EPS, which means that you are incorporating the double-digit growth. Is there any kind of changes in the idea behind that? No, no changes? But basically, I said that we would turn more proactive in terms of shares repurchase program, because 70% of the profit is base profit, and the others are consisted of capital gain, basically, that is. But the capital gain, in a linear manner, to grow this in a linear manner, I think will be... So this is why, from the perspective of cash in and cash out, as we have said. So there could be a possibility of more cash in than the cash out. Then, in such circumstances, by carrying out the shares repurchase program, we'll be able to enhance EPS. I'm sorry, my voice is becoming a little croaky. But at any rate, at EPS, we would like to continue to grow EPS steadily in a linear manner, and that is our idea. Thank you. Thank you very much.

Second row in the front. SMBC, Niko Securities, my name is Muraki. I have a question about your capital allocation. Page 48 on the right-hand side, I can see a diagram, and the ROE improvement, in order to improve ROE, investments must be shifted from light red to the darker red in the center and potentially pushed to the upper side of this slide. I think that's what you're trying to do. Now, with regard to investments, capital allocation, which part do you intend to shrink? That's my question. And also, in terms of share buyback for this fiscal year and the next fiscal year, page 17 shows about 300 billion yen. I think more than 300 billion yen. Is this the number for the upside at the time of upside? Or is this based on the standard scenario in terms of investment? What is the scenario for the share buyback on page 17? In order to improve ROE, there are several things that can be done. One is revisiting capital allocation and low capital efficiency will be released. That's one thing. And another thing is we want to maintain A rating and also conduct share buyback in a flexible manner, as I said before. And we need to set aside some amount two days ago there was an article about me in the newspaper 4.1 trillion yen equity and out of that ratio between the goodwill and intangibles this is about just over 1 trillion and in terms of rating excluding this will have to be excluded for the purpose of rating so in terms of asset or capital goodwill and intangibles. The ratio of these two pieces, if the ratio is higher, then we will be less likely to be able to do a share buyback. So my point is there are multiple factors involved, and there are pros and cons. And we want to look at them at a higher level of granularity, so asset investment or divestment. What is the impact on a financial statement? We want to look at this, monitor this at a higher level of granularity, and we want to visualize it at a higher level of granularity. And based on quantitative data, we want to execute capital recycling. So this is what I meant by ROE improvement. The most important management measure is rigorous portfolio management. This is why I said that earlier. And with regard to the numbers, I would like to refer this to Yamamoto-san. Yes, you have a question about page 48. I would like to explain about the numbers. 11% three years. Upside... For the investment category, this is not really reflected directly. But based on the current portfolio, the horizontal axis, in fact, is the percentage of capital allocated. And this is out of the consolidated capital, how much each category receives in terms of percentage breakdown. So investment will be repeated and repeated. accumulated so the visitor and the investment will be repeated over and over and this is how we enable this so roe will be pushed up through this process and this is already taken into account and we want to achieve 11 for the first year of this plan share buyback will be now changed from 50 to 100 billion yen because of this background And as we move forward with future capital recycling, as we said, there is no sacred cow. No stone will be left unturned. So we will continue to make these efforts in order to achieve 11%. This is what we are trying to show with the bubble chart on the right-hand side of page 48. So withdrawal from law profitability business and also share buyback. How do you incentivize these measures? because remuneration for the directors traditionally sees net income as a key KPI, and ROE was not really taken into account. There are two things. I assumed this position of the presidency in January, and head of segment and head of administrative departments, for all of them, I have repeatedly delivered the message that we have to be focused on ROE. So I'm trying to change people's mindset. And secondly, having said all that, reflecting this into the executive remuneration, of course, is important. But we didn't have enough time this time around. Starting from January with AGM, we could have introduced a new remuneration system, but there are different potential designs, so we would like to spend some more time discussing different possibilities. And by next year, ROE-linked incentive structure hopefully will be introduced. So 11% snapshot achievement in 2028 and going down to 10% or single digit in the following year, that is not really what we want. We want to see rolling, recurring, mid to long-term ROE improvement. And therefore, incentive system has to be in line with that idea. So we'll be carefully designing the system. So starting from next year, hopefully we can introduce a new incentive system.

So the second person on the second row, Sato from JP Morgan. So for this year, the profit plan. So in what way did you apply your conservative estimate? So for the year that had ended, the gross capital gain and net capital gain, if we were to refer to those numbers, so impairment of 50 plus billion yen or so can be observed. But this time, the segment profit, the increase is roughly about 55 billion yen. if impairment is going to go away or you are just expecting the increase in profit by the same magnitude of the possible impairment. So what is your expectations and especially for the like base profit and also is there any kind of conservatism that is reflected if you could be so kind enough to respond? There are some conservatism, but also we are, on the other hand, aggressive or proactive. And at the end of the day, we think that this profit is achievable, and this is why we made the announcement. But, for example, unfortunately, but green coal sales... was not executed in the last year. So according to the SPA, it was a long stop date. But after April 2nd, Unfortunately, we were not able to reach to the full amount as a result of the procurement of the fund. So the market has been quite volatile every single day. So this is why. But our intent remains to be unchanged. Once the market kind of quietens down and if the fund is available, then we should be able to start this program and so from that perspective it is true that we have not incorporated such an amount into the plan and as to the forex 100 well mid 140 yen was expected but according to the forward it is um about 144 yen so the forward if that becomes the spot rate then there could be a possible uh downside uh slightly that is so be it upside downside you know putting that all together 380 billion yen of a net income whether this is enough or not i'm sure you may have different opinions about this but the we think that this is achievable and this is why we have made such announcement today Well, if possible, for this fiscal period, the base profit starting from last year. So I know if you could be so kind enough to explain whether you are expecting growth. Well, not a growth by 10% or 20%. You mean by pre-tax profit? Yes, we are expecting the growth to be enjoyed. So if I may give the breakdown. So in coming up with this plan and we have taken into account all that needs to and real estate related. because of inflation and for other reasons, the uncertainty is rising, we think, because last year's result had been pretty smooth. And from that perspective, you may perhaps like to regard this to be conservative, but the condominium sales and also hotels and inns, the inbound tourism related, we had made the fine tuning taking into account this robustness of the market. But the other, you know, investment, for example, we may have turned a little kind of conservative. And also ships, there may be an impact from Trump tariff, but the ownership of the ships, In fact, the distance of sale, in fact, the cruise, in fact, has been extending. So, therefore, it had remained to be pretty strong in the last year. So, there'll be no negative this year. And then, like a concession, for example, airport, and as for momentum, there seems to be a recovery being experienced. And so therefore, on a year-over-year basis, we have come up with such a plan that you see. Thank you.

Thank you. Thank you very much for waiting. Moving on to the next person. This is Sakamaki Mizo Securities. Profit for the last year of mid-term plan, I don't think you have disclosed that. I know that the ratings can be a restriction, and chair buyback is not unlimited, and you have to consider ROE. So in terms of plan A, what will be the profit level? I know for this fiscal year, there's a lot of uncertainty, but two, three years down the line, the situation will be different. So what level of profit do you think would be achievable or acceptable? We have not announced any numbers today, so I will refrain from talking about any specific numbers, but you can maybe back-calculate, reverse-engineer the number. ROE is important for us, as I said before. Gross profit contribution may be there, but if the capital efficiency is low, ROE can be low or weak. Turnaround or sustainable growth cannot be expected. If there is such an asset, then even if we end up losing the bottom profit for short term, we may want to prioritize ROE improvement. That is our intention. And in 2035, one trillion yen of net profit is now being targeted for. This is very challenging. This is not an objective that is easy to achieve. And it goes without saying, in order to improve ROE, we need to shrink the denominator but also grow the numerator at the same time. We want to be rigorous with our portfolio management and also create new businesses. And we want to allocate maximum management resources for these areas. This is the intention behind that. So rather than being fixated on a single year bottom line, we want to improve the profitability over the mid-term, long-term in a sustainable manner so that we can flexibly do the share buyback and achieve a linear growth in eps so bottom gross profit level is not something that we would like to share with you today i hope you understand thank you very much any other questions from the other floor

we would like to move on to entertaining questions online. From SBI Securities, Otsuka-san, would you mind a meeting and start asking questions? This is Otsuka from SBI Securities. I hope you can hear my voice okay. Yes, we can. Thank you. So page 16, referring to the slide, so for the new year, the ROE plan, So in these businesses, you have a ROE plan that has been shown, but for the first time you have taken such an approach, right? With regard to the achievement of ROE for each of these categories, the responsibility or commitment, who is going to be to hold accountable for this or responsible for this? So like the person, the group officer, I don't think there's anyone who is in charge of group officer for finance, for example. Or you mean the head of the segment may be finally responsible? Or if that is going to be the case, then the capital... would have to be allocated to each of these categories. How does it work? Well, if I may respond to your question, as of now, these three categories, the commitment to these numbers, the management who would account the responsible is Inoue CEO and myself, CEO Takahashi, two of us. But on the other hand... On other pages, as we have disclosed, the finance business, the investment, and the operation, dependent on the segment. you know, the businesses could be categorized differently. So I'm sorry to perhaps go away from your question, but in particular sector or any market, the two, three approaches of finance, operation, and investment. So I think, you know, this is the strength of Forex that we can approach from these three different perspectives or three aspects of the businesses. So rather than appointing the head of each of these categories, under each of the head of segments, we think that the best thing that could happen is to carry out these category activities. But we should not make it kind of ambiguous. So as we have said at the time of the portfolio management presentation, as of now, this finance business, So in the three categories, there is a capital allocation. And also in 10 segments, the capital allocation, you know, we do have managerial accounting perspective. So in other words, the distribution is made. But in a more granular manner, we like to kind of approach this in particular segment. So we may have three different categories. We may have different businesses or different risk return profile. So therefore, with finer granularity, asset and operations are separated so that the capital allocations are made accordingly. so that we'll be setting the ROE target for each of those businesses, and we're kind of balancing the portfolio. But we are still in the middle of the way, but we do not intend to take much time in completing this task of ours in the next three years. In the three-year mid-term plan, we would like to, of course, enhance the sophistication of the portfolio discipline, the management. But how far are we going to kind of disclose to you the numbers is yet to be decided, though. so i hope this answers your question well if i may just confirm then in that case operation wise to the head of segments so they would be there is a quasi kind of capital that has been allocated to them and that is already up and running and about incentivize you are going to be designing this incentive program yes exactly so by segment although it is up and running already, but that is on a segment-by-segment basis. So there will be different asset classes in each of the segments. So we may have to break it down with much more finer kind of granularity so that we'll be able to manage our portfolio in a much better way. So that will be our approach. Thank you.

Thank you. BOA, Tsujino-san, please ask a question. You're participating online. Tsujino-san, please unmute and ask your question, if you're ready. Yes, this is Tsujino B.O.V. Can you hear me? Yes, we can hear you. Thank you. In fourth quarter, equity-based investment of about 10 billion yen in Asia and also in Europe, some amount. And I'm just imagining that Greenco... Sales may have been possible until the last minute, and you wanted to revisit this, and you were considering impairment. That is my read on the situation. Grinko didn't work out, but still you did this impairment process. but the size of the impairment is a quite large why were you able to do this at this time and why did you want to do this at this time around and not before that's my first question and actually the mixed firing impairment the environment business impairment is also related to this Considering the current environment, I think Ibukinada in Japan, well, this timing, I just want to know whether timing of this can be justified. That's my first question. And considering the size of the impairment, If we can exclude the impact of impairment, you could have done 380 billion, and you gained from exit to a great extent last year. I understand that. And this may not be present in the coming fiscal year. I understand that as well. Also, at the same time, this 380 billion yen reflects various types of risks. Now, in what kind of situation would you not be able to achieve 380 billion yen? What would be the conditions or parameters that will realize that kind of scenario? Thank you for your question. Impairment, because without saying, has to be implemented according to accounting rules. It's not something that we can control the timing of, so please understand that point to start with. I'm sure that you can imagine various scenarios, but there are specific reasons. And of course, no impairment is the best possible scenario, but in the prior fiscal year, we had to process necessary impairments. As we posted impairment, we had to relook at the assumptions and become more conservative. And if you believe that the assumptions are too conservative, maybe the impairment was too big from your perspective. Or if it's the other way around, maybe it's the other way around. But impairment and gain on sales matching both of them in order to control the profit well i wouldn't say that we never do it but in terms of the visitor Of course, CEO Inoue says that we have to buy low and sell high. And, of course, we should sell high at the maximum profit level if possible. So we do not arbitrarily control the timing of diversification. And if the outlook of the business is poor and we have to post impairment, that will affect our capital as well. And that will improve ROA as well. So rather than doing buyback, throwing the money out of the organization, if we do that instead and post impairment, we can optimize. The capital which will improve the arrow in the future and improve the quality of capital and kept body of asset. So that's another management approach. So as necessary at the right time, according to the accounting rules, we will be posting a payment. And we want to be flexible with our share buyback. So this is a policy that's been longstanding. It has not changed. Now, with regard to 380 billion yen, I believe you're talking about the forecast for this fiscal year. And which scenario we will not be able to achieve this? Well, every morning we wake up to a new set of news. For example, Trump, Harris are causing recession in the United States, and that may cause global economic downturn. If that becomes a reality, of course, base profit will be affected by that. And as I said before, if the sales or the visitor is faced or if the investment that is planned cannot be executed at that time, things will shift or change. So those are the big factors that I can think of. Yamamoto-san, do you have anything to add? With regard to how we formulate the plan, I would like to respond to your question, Sujino-san. 380 billion yen forecast. In the prior fiscal year, we applied some conservative measures. So I think the plan is more credible this time around. And in the fiscal year, 140 billion yen or more gain on sales was achieved. Well, that was a plan, and we could achieve that based on various assets. But, of course, when it comes to sales per visitor, we have to think about the buyer situation. We try to distribute that over the four quarters, and some of them are already underway. And in the end, we want to realize all of these in a satisfactory manner. But... Maybe 10 billion years so, fluctuation may occur because we don't necessarily want to push the cells. Now, 380 billion, green code is not included in this number. In other words, this base number is quite conservative. But still, 80% increase on net profit for this fiscal year. So overall, the plan itself is a little bit more aggressive rather than just conservative. And hopefully we can give you more information going forward. Thank you very much.

This is going to be the last question. So from online, Sasaki-san from Nomura Securities. Please unmute and start asking questions. I am Sasaki from Nomura Securities. I hope you can hear my voice okay. Would you mind speaking up a little more? I am Sasaki from Namura Securities. I hope you can hear my voice okay. So I'd like to ask a question about the slide number six. So this time, so non-efficient businesses may be divested in a much more kind of proactive manner than before. But in the new investment, 500 to 700 billion yen is the idea that you may have. And if you're going to be reviewing the asset portfolio and the size of the sales of asset, would that match against this 500 to 700 billion yen? Or do you have any other size in mind? And also, timeline-wise, whether it would happen in the first half of this year or the second half, do you have any idea as to the timing as well? And if at all possible... the risk is heightening in different parts of the world, you had explained. But on the other hand, as to your businesses, as we enter into recession, you do have the strength of being able to enjoy such situation. So in this time of uncertainty, is there any kind of new business opportunities that you foresee? Well, as the first part of the question, Yamamoto is going to respond later. So let me respond to the second part of your question to begin with. As you had rightly pointed out, you see we have diversified, really diverse area of businesses and counter-cyclical in the past as well, such as the timing of global financial crisis, IT bubble burst, and so on and so forth. So we did manage to post a positive result on our P&L. And I think that is the reason why you had asked the question. As for the future, it just so happens today in the morning, we have made a press release. So Hiroko Global, Hiroko Training, the acquisition, non-binding MOU has been exchanged and concluded successfully. So, what they do is they would carry out the appraisal of real estate asset, and also they carry through what is recognized to be liquidation process in United States, such as the inventory, for example, they'll be purchasing the remaining inventory and also to liquidate them as well. So therefore, they are truly counter-cyclical businesses that we are now just about to acquire. So from an organic perspective, at the time when the economic cycle is on the downturn, we would be able to make profit, although it sounds a little kind of weird, but still, we would very much like to make the most out of our strength. So if we can move on to the first part of the question. So this is going to be Yamamoto. Allow me to add to what has been said by Takahashi so far. So 500 to 700 billion yen. So recouping of the investment. So we have not taken into account that part. So in terms of the cash in, that would work out to be an upside. And in other words... from a P&L perspective, even if he was to be flat, capital release would be preceded. So therefore, as ROE management, I think we would have more options. And I hope this answers your question. If at all possible, do you have any signs in mind as far as the timing or how kind of firm the plan is? Well, in the three years, the execution is to be done during the three years period. So it is very different from the usual PE investment, like, you know, execution, exit in the first half and then exit in the second half, this is not going to be such a case. So we should not refer to it in a snapshot manner. But just as I had explained, whether there is any room for improvement of the businesses or improvement in the financials. So in the three years, we will be scrutinizing all the businesses in the pipeline. and so that hopefully there will be not much of a decline from the current level. But, of course, there will be some little fluctuations up or down. But even if we have 20 billion yen of a deal, we will not be able to reach to that extent. So please do understand that there would be kind of an imaginable kind of size. So I think it would be in the range of 500, 700 billion, just as you have asked the question for. thank you very much thank you so we have just gone over the time that was scheduled to conclude this session I'd like to hand over to Takahashi to give us the closing remarks thank you very much for joining us today I'm sure that there are still some questions left but

We have introduced the strategy and the measures today, and by implementing them on a quarterly basis, we would be looking forward to providing you with progress so that you can monitor the progress. And we appreciate your kind support, continued support. Thank you very much. That concludes the earnings call for the fiscal year ending March 2025. Thank you very much for staying until the end of this program. Thank you and goodbye.