Ajinomoto Co Inc

Now we'd like to move on to the second session, second part, in which we'll be explaining the results for the first three quarters of the fiscal year ending March 2025. This will be explained by the head of IR office, who is a corporate fellow and general manager for IR office, Mr. Kaji. And then we will take the Q&A, time for Q&A. We expect to finish the second session at 19.00. Mr. Kaji, the floor is yours. Good afternoon. Good evening, everyone. This is Kaji from the IR office of Ajinomoto. I would like to explain the results for the first three quarters of the fiscal year 2024. First of all, today's overall summary. This is today's main message. We achieved revenue and profit growth in the first three quarters of fiscal 2024. Sales, business profit, and profit attributable to the owners of the parent company or reached new records for the first three quarters of the year. Excluding the impact of Forza acquisition, business profit increased 16% year-on-year, so we are making steadfast progress towards the achievement of the 2030 roadmap. For each business unit, food and product business for Japan, Overall, we've been able to respond to the increased cost in Japan. However, overseas sauce and seasonings and quick nourishment are growing both in terms of sales and business profit and making good contribution to the stable business expansion. As for biofine chemicals business, in addition to the steadfast performance of functional materials, biopharma service and ingredients is also growing in line with the 2030 roadmap. We will aim to sustainably grow the food product business and at the same time achieve dramatic growth for bio and fine chemicals business so that we can achieve the fiscal 2024 four-year forecast and take on the challenge of achieving the ASV indicators and the 2030 roadmap. This shows the... Digest of the first three quarters of fiscal 2024, the April to December performance. Sales, as you can see here, has reached $1,151,107 percent of the 2023 level. Excluding the foreign exchange impact, the sales was 105 percent. So we were able to achieve growth in all business segments. For a business profit, 138.2 billion yen, 111% of the fiscal 2023 level, excluding the impact of currency transition, 107%, so we were able to achieve steadfast expansion. For the overseas sauce and seasoning, achieved a sustainable growth, and functional materials achieved a significant growth, driving the entire business growth. Profit attributable to the owners of the parent. 106% of the 2023 level, and EPS was about a 10% increase, achieved a 10% increase almost. This page shows the changes in business profit, the factors behind the changes in P&L. Overseas consumer business achieved a unique growth and also the quantity increase. And health care business achieved a sales growth. And also the price hikes of domestic food business. These had a GDP growth impact. And also the health care business achieved a growth margin improvement, which achieved an increase in gross profits. And also these... absorbed SGA increases from the foreign exchange and forged consolidations. So, therefore, we were able to achieve a $13.7 billion improvement in business profit. This is the gap between the year-on-year gap of the business profit by segment. You can see the changes from the full year forecast and also the changes from the same period last fiscal year. As you can see, the seasoning of food and health care achieved a significant steadfast progress vis-a-vis the forecast, but frozen food achieved a slight reduction in profit. Next, I would like to talk about the sales performance of each segment for the first three quarters of the fiscal year. Among food and seasoning and food, seasoning and quick nourishment combined, if I give you a breakdown of the sales of these two segments combined, for domestic business, food and quick nourishment combined, quantity decreased by one percentage point and unit price increased by 5%. For overseas, for both seasoning and quick nourishment combined, quantity increased by 2% and unit price increased by 3%. If you look at the table here, For the frozen food in Japan, this carries a different color of arrow, so Japan remains flat for frozen food because people are defending livelihood, and therefore we have seen the sales coming to a standstill recently, but we will try to overcome this through implementation of many different measures. For overseas frozen food, the... Asian-related food achieved favorable performance, offsetting the decline caused by the structural reform overseas. For healthcare business, this business was affected by the adjustment in the market overall last fiscal year. Functional materials is continuing to achieve steadfast sales growth, and also in addition to that, amino acid for pharmaceuticals and food recovered its strong sales momentum, and also CDMO was also favorable, so we were able to achieve high growth in sales. Now I'd like to go to the business profit overview for each segment. As you can see here, domestic food-related business, has been heading down, as you can see from the arrow direction here, because of the impact of the raw material prices, including the weak yen impact and also the increase of personnel and logistic costs. We are trying to offset this through the price hikes. However, the If you combine the sauce and seasoning and quick nourishment, i.e., the consumer food business, the profits of this business on a continuous basis has remained flat for the first nine months of this fiscal year. On the other hand, the seasoning and food and food business and healthcare business overseas remains very favorable, so we were able to drive profit growth overall in a steadfast fashion.

Here on this page. is the progress of the ASV KPIs by segment. For organic growth, it is trending in line with the business forecast, reaching close to 5%. For business profit, there are differences depending on the segment, but overall, we are seeing good progress against the business forecast. On the very right, for the EBITDA margin, Each segment is performing steadily against plan, and we will continue to engage in efforts so as to achieve the fiscal 25 ASV KPIs. From this page, I'd like to share some topics from Q3 of this segment. First, for seasonings and food, I'd like to introduce some high added value type new products. The Marketing Design Center has been central in Japan as part of our efforts to attempt to make new value proposals. In addition to Cook-Do Premium Mala Mapo Tofu that went on sale in August 2023 and proved to be a hit, we're launching the second series of products. We will launch from February Kiwami Premium for twice-cut pork and Kiwami Premium for spicy Mapo eggplant. The twice-cut pork is a seasoning for a meat dish that you can enjoy for its intense spiciness and richness. By using onions instead of cabbage intentionally, you'll be able to enjoy the tastiness of the meat and sauce directly. Also, the Kiwami for spicy Mapo eggplant is a melt-in-your-mouth Mapo eggplant with rich aromas and spiciness. Together with Kiwami Premium Mala Mapo Tofu, we aim to acquire new users going beyond the conventional cook-do users. Also, as you can see on the right-hand side, for Thailand's roti menu, the premium varieties of Palo and Lap have gone on sale since November 24, but the premium varieties are helping to develop new users, and are contributing to the expansion of menu-specific seasonings for Thai dishes, in addition to the sales of regular varieties. Not only will we strive to raise unit prices through price increases, but we will also work to expand high-value added products so as to increase sales volume and realize higher sales prices. The next page is about frozen foods. Although Japan currently is a little challenging, by implementing measures steadily, such as further price revisions, we will strive for a recovery. In the overseas markets, we are expanding our business mainly in Europe and the United States, but there are still many areas that are unaddressed. We are striving to expand area coverage at once, for example, utilizing the foundations of our seasonings and food product businesses. In the ASEAN region, following Thailand and Singapore, we have expanded into Indonesia and the Philippines. In fiscal 24, we launched Gyoza in Malaysia and Vietnam as well. In South America, in fiscal 24, we started selling Gyoza in Brazil too. Sales in ASEAN and South America have risen rapidly, and in the current fiscal year, Sales in the first nine months exceeded a billion yen. In the ASEAN region, we are collaborating with One Piece as part of our efforts to promote our value of our Gyoza and stimulate demand, and we will continue to strive to further expand our business. Next is about functional materials. The functional materials business, which has continued to perform well, achieved record high sales and operating profit in the first three quarters of fiscal 24, exceeding the sales for the same period in fiscal 23. The increase in business profit margin was mainly due to the improvement in the ABF product mix. In the PC market, there has been progress in the development of high-performance models, such as the release of models with Edge AI. And in the server network market, AI servers are driving growth so that environment remains favorable. The expansion of HPC, including AI, is positive not only for ABF volume, but also for the fact of improving the mix. We believe that the current favorable business environment will continue, and we will continue to take on the challenge of growth in the next fiscal year. Finally, biopharma services, or CDMO. In the third quarter year to date, Existing businesses, excluding Forge, achieved significant revenue and profit growth, even on a local currency basis. Forge also continued to achieve high sales growth. Omnicam in Europe achieved a significant increase in profit despite a decrease in revenue by improving the product mix. In Japan, double-digit growth in sales and operating profit continued, centered on nucleic acid-based drugs. Althea returned to profit in the third quarter due to the effects of the structural reforms implemented in the second quarter. Forge is also actively expanding its business, and at the end of the third quarter, the number of customers reached 52 companies. We'll continue to develop our unique asset-light CDOMO business based on our proprietary technology. So that was a quick overview, but that was our third quarter results. Thank you for your kind attention.

Thank you very much, Mr. Kaji. Now we'd like to move on to the Q&A session. The Q&A session, just like the first session, We would like to take questions. If you have any questions, please press the raise hand button on the screen. If you are nominated, please unmute yourself and begin your question. Those of you who are participating overseas, you can raise questions in English, and we will answer through simultaneous translation service. In the interest of time, we would like to limit the number of questions to two questions per one question at one time. We thank you very much for your cooperation. Please advise that we may not be able to accommodate all the questions because of the time constraints. Now we'd like to move on to the Q&A session. Please indicate by pressing the raise hand button if you have any questions. Now, the first question comes from JP Morgan Securities, Fujiwara-san. Thank you very much. This is Fujiwara from Nomura Securities. Okay, so previously, in relation to CDMO, you talked about the cumulative numbers for each region. So for the third quarter, if you just single out the three-month period of the third quarter, Europe, North America, and Japan, can you give us a breakdown for the performance of these regions? Yes, thank you very much, Mr. Fujiwara. As you may know, Fujiwara-san, for example, in Europe, Nucleic acid production has started, and the modality in regions are not really aligned with each other. So it's very difficult to give you the numbers by region. So if I try to mingle it together with the modality, for the third quarter, the three months, for Europe, if you look at the three-month period, we achieved growth in both revenue and profit. And also the profit margin is improving significantly as well as far as Europe is concerned. So that's partly due to the CDMO contribution and nuclear asset contribution. For Japan, if you just single out the three-month period, compared to the same period last fiscal year, we declined both revenues and the profit. As we've been explaining from before, the third quarter shipment was brought forward and that was included in second quarter, so this is due mainly to the shipment timing. For North America, Artea, in the three-month period, sales was flat, almost flat, and profit, as I mentioned earlier, increased year on year. For Forge, Sales increased significantly, but profit contribution was negative, still negative. The CDMO business, of course, the forge plan has not changed. But vis-a-vis your full-year target, the fourth quarter, can we expect an increase in profit? I think you have to achieve a significant growth in profit. So what is your confidence of achieving that? Well, right now, We have presented a four-year plan, and each segment is fully committed to deliver on those forecasts. Some businesses are facing a lot of difficulties, such as frozen foods, for example, in Japan and Asia. But we are still committed to delivering on the presented forecast, not only for CDMO, but each business is now working hard to deliver on the promises that they have made. My second question, just briefly, the coffee business that you just alluded to, in the third quarter, if my calculation is not wrong, it seems that you have turned into positive growth already. Is that correct? In the fourth quarter, a significant price increase that I think is expected. So in the price hikes that you have already announced, do you think you'll be able to achieve a recovery in the coffee business with all the price hikes that have already been announced? Thank you very much, Mr. Fujiwara, for your question. Regarding AGF and coffee business in Japan, as you rightly pointed out, for the third quarter, relatively speaking, we have been able to achieve a solid profit growth in the recent months because of the price hike implemented in the autumn period is now taking effect, and they are delivering good performance. And also, as part of our structural reform, the stick-type coffee has been emphasized, and stick-type not only coffee but also other products. uh cream or drink for example those are actually uh delivering a good solid sales number so so we are encouraging all these efforts but unfortunately again the raw material prices are increasing again. So we are still in this game of chasing each other. So this is still continuing. So if you could understand that, that would be appreciated. So from the third quarter, we thought that we are – it's too early for us to declare that we have already returned to a growth track. It's too early to declare that. So then – The price hike, a significant increase, was already announced to be implemented in March. But still, do you think you still need a catch-up to do? Well, when you look at the market trends recently, the price hike – for March, the assumptions thereof, even compared to that, the raw material prices have again increased. So you need to conduct another adjustment in the future. Yes, maybe if this situation continues, we may have to do additional round, maybe. Thank you. Thank you very much for your explanation.

Mr. Kutubara, thank you for your question. So the next question is from Ikarashi-san from Daiwa Securities. Thank you for appointing me. This is Ikarashi from Daiwa Securities. I have two questions. For the profit outlook for seasonings and foods by region, I'm sure there is differences, but for the December quarter, was revenue was up, but profits were flattish. But for next fiscal year onwards, are you able to grow profits in the seasonings and foods business? And can you also talk about the probability of doing so? Thank you for your question. For the seasonings and food business, you may already have seen the data by region, but for Japan, For non-consumer, raw material costs, production cost has been rising, and that has been a substantial negative. But for the other regions, especially for the overseas markets, profit growth is underway even now. For next fiscal year, we would like you to wait until we announce the full year results for the overseas food business continues to be firm and we do we hope to continue on this trend because we are seeing positive trends so with this we would like to ensure that next fiscal year is good as well and in part one Mr. Nakamura spoke about this a little but there are many more things that we can still do so we would like to accelerate our efforts so that we could go back on the growth trajectory. That's our basic way of thinking. Thank you. For the consumer business and top-line growth, are you able to grow it more than expected? Right now, for consumer, for unit price impact, we have been engaging hard in price increases and the results are materializing, but for volume. For seasonings, we have been able to grow it well, but for coffee, the coffee business, we have been seeing good progress on price revisions. We have been able to do that for sticks, but for instant coffee and regular coffee, we are still facing some challenges. So on a combined basis, volume looks relatively weak. But like mentioned earlier for seasonings, various initiatives are being implemented at the Marketing Design Center. There was a mentioning of Swing the Bat, but it is creating a good feeling internally. And through new products, we are striving to grow volume in sales, and we are starting to see contribution So I think things will progress steadily going forward. My second question is about the frozen foods business. Can you also talk about your profit outlook? The decline in profits in the December quarter, I think, contracted. So it was about minus 8%. So when do you expect this to start to turn positive? growth-wise. For frozen foods and the overseas part of the business, as we've been communicating from before, last year in Q4, we have concentrated a lot of marketing cost. So profits in Q4 were quite depressed. But for this fiscal year, we are trying to level out our efforts so that we make the efforts equally every quarter. So for the overseas business, up until the third quarter, year over year, it looks like it's cost-heavy year over year. But then it's going to be reversed in the fourth quarter. As for the domestic or Japan business, the decline in profits have moderated, is what you've said, but Like mentioned earlier, the profit plan we have disclosed is the plan we would like to ensure that we achieve. And we have been implementing measures in order to do so. So we are making efforts to reduce costs, and that was accounted for in the third quarter. However, for frozen foods in Japan, we need to ensure that we also grow top line go through sustainable growth so that profit growth happens in a steady manner as well. That is what we would like to achieve. So when it comes to timing, at this point in time, it's hard to talk about details regarding the next fiscal year, but we would like to ensure that we offer value, have the consumers recognize this value, and we'll pay a price in return that will lead to better profits That is the kind of cycle we would like to create. Thank you very much. One additional brief question I have for you is for the assortment of products for the Japanese frozen foods business. For example, Cook-Do Premium is a high added value, high unit price product you have for the foods business. For frozen foods, do you have any intention? For example, in overseas, you gave the example about employing One Piece. I think this question is for Japan, but up until now, we have been implementing a lot of technologies for the food business. And we have been launching a product lineup called The Series, whether it be shumai products or fried rice. And it's actually really delicious, and I've We position them as premium products. Compared to the regular products, the unit prices are higher. So we treat them as premium products. Thank you very much. I understood that very well. That's all for me.

Thank you very much. Moving on to the next question. SMBC Nico, Takagi-san, the floor is yours. Good evening, this is Takagi. Can you hear me? Yes, I hear you very well. Now, I have a question regarding CDMO business. In your full year plan, vis-à-vis your full year plan, the biofilmer service and ingredients, in your existing business, I think you have achieved 6 billion yen. You are aiming for a 6 billion yen increase. And you have already achieved 4 point something billion yen up until the third quarter. So what do you think about the progress? Is it better than expected or in line with your expectations vis-a-vis your full year guidance? So what is your thoughts about this? Well, thank you very much for the question. Compared to the guidance, we are steadily making progress in the implementation of initiatives, and that's delivering good results. I think the progress, the growth of profits is increasing quarter by quarter. And for the third quarter, of course, there are some negative impact from the elimination of unrealized profits, but still we have been able to achieve growth, so the momentum is becoming much more favorable. So overall, including CDMO, I think we've been able to achieve good results so far. you can at least say that you are well positioned to achieve the guidance. Yes, as we have said, all segments are aiming for the delivery of the committed guidance. When you closed the second quarter, you talked about more qualitative things regarding a low molecule, small molecule things that you might be able to do better, and ASICAP license fee could also grow. including those qualitative aspects. Can you share with us if there's any changes in the story towards the next fiscal year that will push up your business performance? Can you give us some updates there? Well, when we announced the first half results, And also we have talked about this from the first quarter of this fiscal year, little by little. We've been approaching customers with a unified approach. After that, these are delivering good results. And most recently, small molecule included, and including Forge business. Overall, the order received is showing favorable performance. So towards the next fiscal year, We believe we are having a good sense and solid performance can expect it. So we would like to develop the concrete business plan from here onwards. Regarding Forge, the sales has been more upbeat compared to your plan. Does the same apply for your profits as well? As for Forge, on our local currency business, local currency business, it's in line with the plan. However, when it's translated through currency translation, because the yen has been weaker compared to assumptions, so... It's negative compared to the plan when it is translated into Japanese currency compared to an Asia plan, but that is not the realistic situation. But so therefore, forged business is progressing in line with the plan on a local currency basis. ABF, the profit margin, is very high for the third quarter as well. So it's quite high. So 55% in the third quarter already. as the quarter progresses, the margin is improving quarter after quarter. Can you explain the background to this? And when looking to the next fiscal year, can we expect extension of the current level of OP margin, the profit margin, business profit margin? Well, as we mentioned earlier, The CDMO profit margin improvement is contributed by the improvement of the mix. The improvement of mix has made a great, great contribution. So the high-end products proportion is increasing. And when that happens, the overall profit margin improves and enhances. That is the current situation. And within the PC business, The AGI-related PCs, for example, those are becoming available. So those higher-end solutions are also making contribution, and those demands are rising. So if that happens, the profit also is boosted. This fiscal year, I think the situation has been very favorable, and we have been able to translate that into business, and therefore we shall be able to capture this in our business growth next fiscal year onwards. Thank you.

Ms. Takagi, thank you for your question. Next question is from Mr. Miyazaki from Goldman Sachs. This is Miyazaki from Goldman Sachs. Thank you for taking my question. I'd like to have you share some numbers. For Forge, what was sales and profits on a standalone basis for Q3, especially for sales? Q2, there were favorable conditions that coincided. So compared to Q2, how was revenue in Q3 How is the trend, and is that positive over the longer term, or is it positive over the short term? That's my first question. Thank you for your question. For Forge, unfortunately, we don't disclose the specific sales, but for Q3, we were able to see steady growth, high growth compared to the previous year. So compared to Q2, how was it? Can you give me some direction or how high sales was? We don't give out the quarterlies. But when you look at how profits were, I think you can guess. So profit trends are close to sales trends. Well, basically by quarter, there isn't a skew in costs, especially for Forge. So the trends in sales and profits are pretty parallel to one another. So when you exclude Forge, sales growth was 7%. And when you do the reverse math, it looks like Forge's sales was weak. My math might be wrong, but that's how I felt, and that's the reason why I'm asking this question. I guess I shouldn't be worried about that. Or was there a lot of concentration in the second quarter? Actually, if you go back to page three, the numbers are rounded off. When you round off the numbers, the numbers look like they're not that different. But actually, we have been seeing steady growth in the third quarter. The momentum for this business has not decelerated at all. Understood. Thank you. One more question I have is about the appendix where you show all the numbers for overseas on a local currency basis sales you show local currency sales for the overseas and for the December quarter Indonesia was good but Thailand Vietnam numbers Or actually, Vietnam may have been seeing a pickup, but single digit, low single digit. So I was wondering whether overseas business can grow more. You talked about some new products in Thailand earlier in the presentation. So are those contributions expected from the fourth quarter onwards? Or how do you view the growth you've been seeing in the overseas markets? Thank you for the question. For Thailand first, we have rounded it down. So it looks like 2% growth. But for seasonings, each category has been growing steadily. And for beverages, meaning canned coffee, birdie, Q3 was relatively weak. For coffee in Thailand, raw material costs have been rising, so we're not stretching ourselves to grow the business right now. So sales in Thailand looks a little low due to these circumstances. For Vietnam, on the other hand, We talked about this when we were announcing the first half result as well, but the umami seasonings from China has started to penetrate the market. So we have experienced this in the past, but we have been implementing countermeasures in light of these trends. So for December, we have started to see some results come through. That was reflected in our results. I just wanted to confirm one thing. You were saying that you were determined to achieve your plan, but for seasonings and foods, the plan is minus 2.6% for business profit. And if you're trying to achieve that, you still have been able to grow profits by 4% for Q3. So you are exceeding this plan already. And so we would like you to exceed the plan instead of achieving the plan as it is. So is that the right way to interpret this? Or are you trying to still achieve the minus 2.6% growth that you have in your plan? Thank you for the question. Like you rightly said, when you look at the details by segment, There are some businesses that are doing well. So for those businesses, we're not going to step on the brakes, but we will continue to ensure that we are able to generate profits. But depending on category, growth may have been tough leading up to the third quarter. So for those categories, we would like to work hard so as to achieve plan. That's all for me. Thank you very much.

Miyazaki-san, thank you very much for the question. Now, moving on to the next question, which is from Sumoge-san from Okasan Securities. Hello, this is Sumoge from Okasan Securities. Good afternoon to you. I have a question regarding the foods. And quick nourishment business in particular. You talked about coffee achieving growth in sales, but cost is increasing, so you're not really too optimistic, and this is going to be a catch-up game with the cost and your price hikes. So in the fourth quarter, 5 billion of sales decrease is expected for this business, I believe. So first and foremost, if this is really realistic, then you are expecting a significant increase in expenses starting from the fourth quarter. Is that correct? Or is it so that this fiscal year – You are on an upside trend, but you're not really optimistic starting from the next fiscal year onwards. So the timing of cost increases and the price hikes timing, what is the gap in between these two different timings? So that's my first question. You're talking about the domestic coffee business. The prices and the costs are different. raw material cost increases, right? I think that's how I interpreted the question. As far as coffee is concerned, the current market prices are reflected in a raw material cost after a certain time lag, generally speaking. So having said that, however, it's continuously increasing. So it's getting difficult for us to reserve, make reservations for a long time. So, relatively speaking, the current market price is... are reflected in input costs with a shorter timeframe compared to before. That is the assumption that I think you better take. Okay, got it. Thank you very much. So as far as this fiscal year is concerned, from procurement all the way to the utilization, there's a lead time. So therefore, the cost increase is going to happen significantly in the fourth quarter onwards. Is that correct? So if that is the case, that explains the significant decrease in revenues in the fourth quarter. Well, it's very difficult to declare that it's likely that that is going to happen. But the cost pressure continues to be very tough on us. So I think you should consider that as an assumption. And the next price hike is expected in March. and the cost will incur earlier than that. And that is a possibility that we have to anticipate. Okay. My second question is about cost again. So this is about the overall image. I would like to confirm, if possible, into the next fiscal year as well. Coffee cost overall is going to be very tough on you into the next fiscal year as well, according to my understanding. But when it comes to the – More material for the fermentation, for the seasoning, and also tapioca prices are also increasing, I believe. So in total cost, what is the outlook that you have for your cost overall, including coffee? If you can give us a general indication as to the level of costs. Well, for next fiscal year, you have to wait until May when we announce the results. But basically speaking, our cost fluctuation – vis-a-vis the market conditions. We carefully observe the market trends in a very meticulous manner, and we do not really apply an optimistic assumption when we develop the plans. That's the general approach that we take. Therefore, given the recent circumstances, as you rightly pointed out, the current prevailing circumstances is quite stabilized compared to before. So I think we can say that as a general trend, but things could change quite significantly in a short period of time. This is what we have seen in the recent days. So we will keep a close eye on how things unfold in the future. And if need be, we will implement the necessary measures. That remains unchanged. Thank you very much. Just for my information, other than coffee, are there any elements that we have to keep a close eye on in terms of cost elements? Well, of course, personal expenses and logistics and also other raw materials, if there's anything that we have to keep an eye on. Looking at the recent trends, I think things have been stabilizing quite a lot. For an exchange, it's very difficult to predict how Forex will unfold in the future, but including the fermentation raw materials and other raw materials, we do not see any particular element that is causing a major concern for us in the recent days. That's how we look at things. Thank you. Understood. Thank you very much. That's all good for me. Thank you.

Thank you very much for your question. The next person is Mr. Saji from Mizuho Securities. Thank you for taking my question. I have two questions. Two quick questions. Regarding FORGE and turning EBITDA positive in 2025, is that goal still in place? And What are going to be the improving factors and as well as their forecast for this fiscal year? Turning positive in fiscal 25, profitable for forage is still in place. The number of customers is increasing steadily every quarter. And by customer, it's not just one single project for many customers. So the number of projects are also rising. So this is contributing to higher sales. And if sales growth grows, profits will grow as well. So our efforts have been bearing fruit. Therefore, this is likely to contribute next fiscal year. $6.5 billion negative business profit was the result for Q3. How does that translate into EBITDA? Unfortunately, we don't disclose that number. So business losses can be about $9 billion for the year and maybe an improvement of $5 billion next fiscal year. Well, roughly somewhere around that neighborhood. For the other segment, profits were quite high. That was unprecedented in the last two to three years. Can you talk about the reasons why for Q3? Many factors are included inside the other segment. There's many. I can't pinpoint just one single thing. There are businesses that cannot be allocated to the other segments. And the way costs were incurred last fiscal year and this fiscal year are somewhat different, leading to these results. And one thing I can say is it's a very technical matter. Q3 last fiscal year, half of its acquisition cost was accounted for under others. Then in the fourth quarter, it was reallocated to the CDMO segment. Therefore, last fiscal year in Q3, there were some cost items that were included under others. So that's a technical thing. So it's a buildup of a variety of factors. Yes. Okay. Understood. Thank you.

Thank you very much, Mr. Saji, for your question. We are so sorry, but we are now approaching the closing time, so this will be the last question. This will be from Ihara-san of UBS Securities. Thank you very much for your explanation. This is Ihara from UBS Securities. Thank you very much for pointing me. So this is a question that may be off this results presentation, but you talked about the macro environment and that's translated. And Mr. Trump is now giving out his idea regarding the tariffs. So when the macro environment is so uncertain, what are the risks that you are perceiving right now? And how about the possibility of these risks becoming a reality? And it was already mentioned when Mr. Nakamura explained the leadership change. So if this is going to have any impact on the profits, if you can – Please let us know. So when the macro environment is changing like this, I think your business profit increase of 10% to 15% is already presented as your goal. So do you think this is feasible, even though the environment is so fluid right now? Well, thank you very much, Mr. Ihara, for the question. Regarding the risk of tariff, well, right now, We do not foresee – for those things that have become clear already at this point of time, we do not see anything that will have a significant impact on our business. We are not foreseeing any significant impact because of the tariff that has been declared so far. But we cannot tell what is going to happen from here onwards. So we have to be very keen and stay alert on what is going to happen and see and conduct simulations as to what – could potentially happen to our business so that we can capture the signs as early as possible and take actions as swiftly as possible. That is the question. So we would like to be thorough about this. And regarding the deeps, we talked about deep seek. There was a comment regarding deep seek earlier. So including all these points, as far as ABF is concerned, because we cannot foresee what is going to happen, but if these technologies become widespread in their adoption, utilization will increase globally. Therefore, if that happens, this will be rather, because this is about increasing modality, so this will never be a negative factor for the ABF business in our view. And given the circumstances, as we talked about in the end of the first half, that we will also aim for a double-digit growth in 2025 as well. That was the message that was given from the management, the leadership. And at this point of time, this target remains intact. Well, thank you very much for your comment. I understood very well. So tariff is not likely to have a significant impact on business, at least so far. But if there's any possibilities that you're foreseeing, if this scenario happens, if there's any risk to your business, depending on the scenario, can you think of such scenarios? Well, it's very difficult for us to give you any concrete example. So as we've been talking from before – No matter what happens, we are trying to implement necessary countermeasures and overcome them and achieve overall growth as the entire business. That is the management style that we've been trying to evolve ourselves into, and we would like to continue to brush up this attitude and approach, and we look forward to your continued support to this end. Okay, thank you very much. Thank you.

Mr. Hira, thank you for your question. This concludes the Q&A session. So Mr. Kaji will extend a concluding remark. Ladies and gentlemen, thank you for joining today. Apologies for suddenly changing the agenda, but thank you for joining us from the leadership transition briefing as well as the results briefing. Under the new management, he mentioned that he is determined to accelerate our efforts to achieve our targets at an earlier stage, and we would like to work hard on a company-wide basis, and we look forward to your further support as well as your feedback as well. Thank you very much. That concludes today's briefing. Thank you for joining.