Ajinomoto Co Inc

Thank you for joining the IR briefing for the third quarter of FI 2025 ending March 31st, 2026 of Ajinomoto. I'm Goto of IR office. We have Mr. Kashi, the general manager of IR office, participating as the speaker. This session will be a 60-minute session. Mr. Kachi will present on the disclosure material followed by Q&A. Please refer to the materials through the homepage of Ajinomoto IR site. Mr. Kachi's presentation will follow the presentation material. Please also refer to the financial summary and also a forecast. session will be recorded and to be posted on our IR site. We would like to start Mr. Kaji, please. Hello, everyone. First, please turn to page two. This is the summary. For the first three quarters of FY2025, sales, business profit, and profit attributable to owners of the parent company all reached new record highs. In the seasonings and foods business, despite negative factors in solutions and ingredients, higher sales and profits were achieved overall, driven mainly by Japan and overseas seasonings as well as the Japan coffee business. In the bio and fine chemicals business, Functional materials recorded significant increases in both sales and profits. Biopharma services and ingredients achieved higher sales and substantially higher profit, excluding the impact of the divestment of Ajinomoto Altea Inc. For the full year FI25 forecast, both business profit and profit attributable to owners of the parent company have been revised upward. Looking ahead to FY26, in addition to achieving sustainable growth of seasonings and foods, we aim to realize significant growth in the bio and fine chemicals business and challenge ourselves to achieve the 2030 roadmap ahead of schedule. Before going into the detailed explanation of the cumulative results through the third quarter, I would like to start by highlighting the key points of the third quarter.

Please turn to page 15. Page 15.

This page shows the results for the three months from October to December. In the three months of the previous fiscal year, we achieved record highs in sales, business profit, and profit attributable to owners of the parent company. In this fiscal year, during the October to December period, all businesses, including seasonings and frozen foods and healthcare posted sales and profit growth, enabling us to further accelerate our growth momentum. As a result, we significantly exceeded the hurdle set in the previous year and achieved new record highs. Business profit increased significantly to 115% year-on-year. Please return to page three. As a result, while both sales and profits were flat year-on-year through the first half, the acceleration in growth during the third quarter led to higher sales and profits on a cumulative basis through the third quarter, reaching new record levels. The sales amounted to 1,164.1 billion yen, representing 101% of FY2024 and 101% excluding currency translation. Business profit was 145.9 billion yen, 105% of FY24 and 105% excluding currency transition. Please turn to page four. This slide shows the gap analysis in business profit between FY24 third quarter cumulative results and the FY25 third quarter cumulative results. The left-hand side, the $4.8 billion increase in profit due to change in gross profit due to change in sales was driven by higher sales in overseas seasonings, the domestic coffee business, functional materials, and others. Regarding the $18.6 billion increase in profit next to that due to change in gross profit margin, improvements in gross profit margins in overseas seasonings domestic coffee business as well as the functional materials pharmaceutical and food use amino acids and biopharma services cdmo contributed as for sga expenses we are expanding investments in intangible assets in other areas to support sustainable growth in line with the 2030 roadmap please turn to page five This slide shows an analysis of business profit by segment for the FY25 third quarter cumulative results compared with the same period of the previous year. For reference, the lower part of the slide presents an analysis of the differences between the initial full year FY25 forecast and the actual results of FY24. In the seasonings and food segment, sales increased overall driven mainly by Japan and overseas seasonings and Japan coffee business, more than offsetting the decline in solutions and ingredients. Business profit, which had declined through the first half, rose significantly in the third quarter, resulting in higher profit on a cumulative basis. In frozen foods, while sales were roughly flat year on year, excluding foreign exchange impact, business profit declined, unfortunately. However, in the frozen foods business, for the three months from October to December, effective measures taken in Japan proved successful, resulting in a return to sales and profit growth. As planned, the frozen foods business shifted into a profit recovery phase in the third quarter and performance is steadily improving. In healthcare and others, Sales were flat overall. However, excluding the impact of the divestment of Ajinomoto Altair, underlying sales increased steadily. Business profit rose significantly overall, supported by a substantial increase in profits from functional materials, as well as steady profit growth in pharmaceutical and food use amino acids and CDMO operations. Please turn to page 6. I would like to provide some additional details regarding seasonings and processed foods. First, please see the left-hand side on Japan. In coffee products, the effects of aggressive price increases have become evident, resulting in a significant increase in sales. In addition, within seasonings and foods, the core menu-specific seasonings achieved close to double digit percentage sales growth making a major contribution to overall sales growth, and the growth has accelerated across Japan as a whole. For the cumulative results through the third quarter, sales were 110% year-on-year with volume at 95% and unit prices at 115%. Excluding coffee products, sales were 104% year-on-year, with both volume and prices at 102%. For the three months from October to December, this is for domestic Japan, sales reached 113% year-on-year with volumes 97% and prices at 116%. Similarly, excluding coffee products, sales were 108% year-on-year with volume at 106% and prices at 102%. Excluding coffee, for example, in October to December period, Each sub-segment product performance continue to be strong. Moving on to the overseas business to the right, the third quarter cumulative results are shown here, 104% on year and 102% for volume and unit price. Especially in three months from October to December, The growth is accelerating overseas, 106% growth in sales, out of which 104% for volume and 102% for unit price.

The status of the five major countries, the separate document that outlines the

performance results. On page three, in the middle of this page, we have shown the three-month local currency-based performance. Let me add some more comments. In Thailand, the overall 2% growth was recorded, although exports of instant noodles to Cambodia were weak. Sales of seasonings achieved mid-single-digit growth in local currency terms. Vietnam remained flat year-on-year for the three-month period. While a new year-related demand was recorded in the third quarter in the previous fiscal year, It will be recorded in the fourth quarter this fiscal year due to the timing difference. And we therefore expect an increase in demand in the fourth quarter. In the Philippines, during October to December, temporary factors such as typhoons and earthquakes affected. Despite these negative factors in some countries, Overseas operations as a whole achieved 106% sales growth during this period.

Please turn to page 7.

Based on the performance up to the third quarter, we have thoroughly reviewed our full year outlook and revised our fiscal year 25 forecast. Please also refer to the revised full year forecast by segment for the fiscal year ending March 2026, also provided to you beforehand. While sales have been revised slightly downward on an overall basis, we expect business profit for the food business as a whole, including seasonings and foods, as well as frozen foods, to steadily meet our initial plan, which we made public at the beginning of this year. The healthcare and other businesses have been revised upward, mainly driven by the strong performance of functional materials. Profit attributable to owners of the parent company has been revised upward, and as the gain of the partial sale of fixed assets disclosed separately today is expected to exceed the initially assumed amount, That is the reason why we decided to do an upward revision.

Please turn to page eight.

The upper section shows an analysis of the differences between the revised fiscal year 25 full year 4 plus 5 segment and the prior year results. So you do have the revised figures in brackets. And at the bottom, you can see the differences between the initial fiscal year 2025 forecast and the prior year results. Please turn to page 9. From here on, I would like to provide additional details on the healthcare and other businesses, starting with the functional materials. Sales of ABF for high-performance pools used in AI servers and networks have been performing strongly, leading us to revise our initial growth plan upward and expect a 28% increase in sales for the full year.

Next page then.

As a first step to respond to growing demand toward 2030, we have constructed a new varnish production facility at the Gunma plant of Ajinomoto Fine Techno. The new facility began full tail operations in October 2025 and has started producing ABF furnish for cutting-edge applications. We will continue to build a supply structure that reliably meets robust demand while maintaining our high market share and solidifying our position as the industry's de facto standard. Next, page 11. I would like to provide additional information on a biopharma business or CDMO business. cumulative sales through the third quarter of fiscal year 25 has been in line with the company-wide plan. As for business profit, this is something that we have disclosed in the first half, but excluding costs incurred at Forge for commercialization support that were not included in the initial plan, performance has been progressing as planned. In Europe, Small molecule products are performing steadily, and we expect continued solid growth in the fourth quarter. In Japan, although profit declined through the third quarter, a large-scale shipment of agiface is planned for the fourth quarter, and we expect full air sales and profit to be in line with that plan.

Forge in North America has been performing well.

achieving both higher sales and higher profits. Its customer base continues to expand steadily, and the number of approvals for customers to initiate new drug clinical trials is increasing, driving strong revenue growth. Business profit was impacted by temporary costs associated with the accelerated commercialization efforts that were not initially anticipated. These are recognized in the first half. Including these costs, we initially aimed to achieve profitability on an EBITDA basis into fiscal year 25. However, management has chosen to prioritize accelerating medium to long-term growth over short-term targets, resulting in a slight downward revision to the full-year plan. This explains this slight downward revision for CDMO business. By leveraging our proprietary technological advances and responding steadily to customer needs, we will continue to build a track record and accelerate the growth of our CDMO business.

Please turn to page 12. Next, I will explain the progress of ASB indicators for each segment.

For this fiscal year, ROE at the top is expected to be approximately 18% on a substantive basis, excluding the impact of the 4G acquisition and the sale of the head office. Organic growth is expected to be approximately 5%. The EBITDA margin is expected to reach 17% in line with the roadmap. Page 13, the progress of ASV indicators by segment is summarized in this table. That concludes my brief explanation of our third quarter results and earnings forecast. Thank you very much for your kind attention.

We would like to move on to Q&A session. I would like to explain how you can ask a question. Please press the asterisk and number one on your telephone. I will call the name of the person to ask a question, so please state your question. If you would like to cancel, please press asterisk and two. If we have many people who would like to ask a question, we may not be able to take all the questions. Thank you for your kind understanding. From overseas, from English line, you can also ask your question in English. We have simultaneous interpretation. We will now start the Q&A session. First, Mr. Sachi from Mizuho Security. Hello, can you hear? Thank you very much. This question I must ask functional materials third quarter 42% sales increase 8.6 billion and 5.3 billion increase and 57% any background or special or reason or element. My interest is whether this is sustainable or not. May I reply one by one? This question was on functional materials. The third quarter sales and profit accelerated its growth, but are there one time factors? That was the nature of the question. As of the end of in Taiwan, there was a large-scale hurricane, and it was around the end of the month, so the shipment was partially postponed to October. However, there's certain impact from that, but overall, this business in the third quarter was extremely strong.

How about the sustainability?

After this, towards next fiscal year, Mr. Nakamura referred to this point when we conducted briefing for the first half, the high-end demand is extremely strong.

And currently, any individual

Negative factors, whether we hear them right now, well, actually no. So that is the present status. Two percentage point improvement, 57% of business profit margin. That is thanks to the growth of the high-end area. Yes, the product mix shifted favorably. So that is the major factor. Will this be sustainable? Yes. On quarterly basis, fourth quarter usually has some seasonality. So, quarter by quarter, there may be some variances, but overall, we are seeing strong growth in the demand at the high end area, and we are able to supply to that demand. that generates positive impact and we intend to continue to work on this area and briefly just one comment uh the umami seasoning uh 2.8 billion yen uh decline of the profit it seems that the decline is expanding from 1.8 billion What are the updates available and how should we understand this number 2.8 billion? We are implementing various measures, for example, to improve the efficiency using new fermentation bacteria. In addition to first half measures, in the future as well, in various sites, we are going to implement various measures. That remains the same. Currently, the market price of the raw materials have settled down. Considering the current situation, the market shift of direction is rather difficult to foresee. Based on such assumption of the market trend, And as the overall food market, in order to achieve sustainable growth, we are to implement various measures. 11% for full year. For total solutions and ingredients, you have made a downward revision, but the revised number is achievable. Yes. As the business, the market trend will recover and the raw material cost decline, one cycle will be completed and after that the market will settle down and we will react to that and take measures. On the other hand, the effect of the low raw material cost is seen in the B2C business It includes the umami seasoning for processing as well, and we are able to increase the profit margin steadily. Thank you very much.

Thank you, Saji-san, for your question.

Next question, from SMBC Nikko Securities, Furuta-san. Thank you. This is Furuta from SMBC Neko Securities. Good afternoon. I have one question regarding CDMO. As you mentioned, there is a large shipment expected in Japan in the fourth quarter, so we are expected to grow sales there in the fourth quarter. However, when it comes to The progress that has been made, are we having a clear picture of the actual progress that is being made? Are we sure about this? So this is something that is being scheduled with our customer. So the fourth quarter is just one month, two months down the road. So we are, yes, expecting this large shipment, especially agiface in Japan, will lead to higher revenue and higher profit, and this is for sure. Thank you. So as you mentioned, that is expected, but maybe there is going to be some kind of postponement and there is going to be an unmet target for the full year. Are there any such risks? Well, in the third quarter, this time around, each business performance has been scrutinized, and we came up with this revised plan. Therefore, we believe that we are having an accurate outlook on the situation, and the revised numbers reflect our perspective on that matter. Thank you. Thank you very much, Furuta-san.

Moving on to the next question, Morgan Stanley, MUFG Securities. Hello. I'm Atsuyama of Morgan Stanley. I have two questions. First is on food business, the umami seasonings for processing. you have reduced the plan. But in other areas, you have made upward revisions by about 8.6 billion. What are the gap with the assumptions? Can you explain more detail? And also, the umami seasonings, the competition is becoming fiercer. Is it going to impact your B2C business? or you don't have to be concerned about that. What is your view on that? Thank you. In the fruit business, this time, looking at the third quarter results, in each country, in various countries, there are impacts of fruits from the initiatives, and we are able to grow volume and necessary price increase were implemented and mixed improvement impacts are generated, we expect this to be sustainable. That is the major factor. In addition to that, we covered this topic in the first half. The umami seasonings for processing, the global B2C market is staying soft. On the other hand, for our seasonings and food segment, there are cost benefit, including those factors as the overall food business strong full year forecast upward provision was possible. For umami seasoning for processing, any impact ought to be to see, as you have seen from our results, There is no particular impact that we expect to see. I see. In Thailand, the situation is the same. There were floods, but the third quarter started to improve. So we don't have to be concerned about that. Am I right? Regarding Thailand, it wasn't actually a flood. It was the instant noodle risk increase. exported to Cambodia, that risk remains. And that is the factor pushing down the overall volume. When we just look at the seasonings, it is the growth of mid-single digit. So the trend right now does not require a lot of concerns. The second question, biopharma, CDMO, In the fourth quarter, the profit is higher than 4 billion yen. The level will be rather high. Agi phase, is that the major impact? Is it one time factor or is it due to the capability? any context of this level for CDMO. Firstly, on slide, please turn to page 11. Low molecule, this area, the trend is very positive. And fourth, top line is very strongly growing. and the improvement of the revenue is steadily progressing. And for Agifei, on quarterly basis, due to the timing of the shipment, there were ups and downs, creating concerns to investors.

But on full-year basis, it is in a trend with very high

top line and bottom line growth that we expected, and that is sustainable. Please understand that there will be concentration in the fourth quarter, 1.5 billion downward revision. This time is the upfront cost mostly. Yes, consulting fee is the major factor. Understood. Thank you very much.

Thank you very much for your question. Next. This is from the English channel. from Bernstein, please.

Hi. Thanks very much for your time. So obviously the ABS results were very, very strong in the third quarter, but each quarter you seem to be getting less margin uplift relative to the revenue growth than you were in prior years. Is this a factor of the increased depreciation from the Gunma expansion, or have there been some other changes to the cost structure in the ABF business?

Thanks very much.

Yes, thank you very much for your question, .

Yes, new facility has been built. Therefore, depreciation has gone up. However, the cost structure or revenue structure remains unchanged. This business, as I mentioned in the first half, ABF and also other related areas with the new product development, these are ongoing. So R&D goes up and down quarter by quarter. So that is one of the factors that is leading to the margin trend that you referred to. However, in conclusion, there is no change in the revenue structure.

Okay, that's very helpful. And maybe turning to the America's seasonings and foods business, it's good to see the revenues back in growth. but there's still a lot of margin contraction in that business. Can you help us understand what's impacting the margin contraction in the Americas seasonings and foods, please?

Thank you very much.

So in the Americas, seasonings and foods, So if you refer to the document, page three, regarding the performance by region, you have a matrix. And please look at seasonings and foods. And a big portion would be Latin American business. And within it, We have umami seasoning for food processing. We have a large facility in Brazil for production, and there was a negative impact that significantly affected the final number.

So you talked about the Brazilian factory having some problems in the second quarter, but then I thought that had been all resolved. So is this something different to the downtime of the Brazilian factory?

No, it's not that the downtime continued, but in the third quarter, we are still seeing a challenge because the market has not improved yet. So the market condition has not improved. That is the reason.

Okay. Thanks very much.

Thank you for your question. Thank you for your question, Makui-san. Moving on to the next question, B of A securities, Sonobe-san. I'm Sonobe of B of A securities.

My first question, I would also like to ask about seasoning and food. When we look at regional breakdown, if the calculation is correct, In Japan, 3.9 billion increase of profit is achieved. The pricing and the volume you have explained and 3.9 billion increase in profit in the third quarter, can you break them down into factors? Thank you for the question. In Japan. Although I cannot talk about the details, roughly speaking, domestically, coffee business, AGF, profit grew significantly, and so-called Japan domestic seasonings business. I briefly touched upon this. Cook-Do and Kiwami series, these are very popular. and that generated a significant profit increase, and also soups. We introduced new products. Sakusakubekopan is the product name that is very popular, and those are the factors contributing to increase of the profit. The major core categories are contributing to profit growth, So that led to major profit increase overall. Thank you very much. In the second quarter, the profit of the seasonings and foods in Japan slightly declined. And towards the third quarter, what changed mostly? What are the main factors? The changes from the second quarter, what are the points? When you look at the prices and volume, the third quarter is slightly stronger, but given the magnitude of the profit increase, I am not really digesting the reason. First of all, coffee products. The improvement is continuing, and this is further improvement in trend from the second quarter. The very good initiatives are underway, and those are bearing fruits. On the other hand, seasonings-related area, on quarterly basis, there are ups and downs, but from one or two years ago, we have been uh making challenges and changing the corporate culture so that we will make more challenges and that is continuing new products and services are being proposed to the retailers and various transactions are activated and these are generating good impact to existing products as well And the many specific seasonings, the general prices are rising, and consumers are trying to be creative in managing their finances with reasonable costs. of food raw materials and they are able to cook a balanced meals and we are making very proactive proposals and the fruits of such efforts have materialized in a concentrated way in the third quarter next question the profit contribution you disclose a half year basis for japan and overseas The gross profit increased through volume increase or SG&A or cost increase in terms of the broke breakdown. This time, what was the seasonings and food segment? On page four, the business profit analysis is shown. It's hard to carve out just Japan business. because we look at this seasoning business on global basis but generally speaking two items in the left they are growing in good balance so there were price increases and new products were launched through making challenges and that is leading to better product mix and from second to third quarter major profit increase was achieved. Good impact is felt among the existing products as well. So overall, we are able to proceed with good initiatives. Thank you very much. And my second question. In the fourth quarter, the plan has been revised and calculating backwards, This seasonings and food, the increase of profit will further accelerate third quarter 3.3 and fourth quarter nearly 6 billion yen. So seasonings and food further accelerate and solutions and ingredients will turn to profitability in the fourth quarter. These numbers are already visible. As I have said before, There's only a few days remaining for the current fiscal year, so our forecast is quite accurate in our forecast. As you correctly pointed out, in the fourth quarter, the seasonings, the strong profit growth will continue. Partially, last year, fourth quarter, overall,

There were some excess capacity.

So we have introduced various measures proactively. In other words, expenses rose in the fourth quarter last year, but this year it has evened out. So that is another factor in expecting strong performance. and solutions and ingredients in the third quarter. Our plan assumes that some upside as was commented previously. We have introduced new fermentation bacteria in some of the plants, and that is generating the fruits. We are seeing some end of the cycle. So, in fourth quarter alone, we have expectations of a flat or slight positive. Thank you very much.

Thank you very much for the question. Moving on to the next one. From city group securities. Watanabe-san, please. This is Watanabe from Citi Group. Good afternoon. So in the third quarter, profit increased in Japan. I have one question related to that, and the second one is related to the building and the land sales of your headquarters. So for the first point, you mentioned that coffee increase in sales has contributed greatly That said, however, the raw material cost has increased, and that is having a strong impact on the situation. So in the overview on page one at the bottom, it talks about negative $3 billion relating to material cost increase, and mostly coffee, I believe. However, you are being able to achieve increased profit, so I'm not sure what is a contributing factor in the cost the business, but if the coffee bean price will stabilize, then probably we could see more profit increase in the next year or maybe not. So what kind of measures are you putting in place for the coffee business overall? That is my first question. Yes, thank you very much. As you rightfully pointed out, year on year, Japan's coffee business is still seeing an increase in material cost. However, this is a trend that happened in the first half and is accelerating. However, customers are very understanding of the matter, so we are able to make price adjustments. That has led to the performance that you are seeing. That is one. In addition, and I have explained this several times, but one of our strengths is stick-type coffee. So the current situation is seeing an increase in our market share. So in the domestic market in Japan, we have the number one share in stick-type coffee. So the product mix has improved, and that has had an effect on the increase in profit. In the first half, Masai, the general manager of Food BU, mentioned that EGF and our group as a whole are very determined to talk with our customers, have a point of contact, and make meaningful proposals. This has been an ongoing effort, and our customers have stuck with us. because of such activities despite the challenges that we are currently seeing. So talking about next year, maybe this is not the right timing to talk about what would be expected, but these good activities that we have been conducting will continue on into the next year so that we can have a sustainable growth going forward based on a solid foundation. Okay, understood. second point so 45.1 billion was the selling price for your land and building of your headquarters and that you are going to deliver it on 27th of February so I do acknowledge that this will be the case but the cash generated which would be coming in of course you had a target of meeting $90 billion cash level by the end of 2026, but maybe you'll have even more. So what are your plans for the cash that will be generated? Thank you for your question. Our way of thinking remains unchanged. Thankfully, as you can see in our third quarter results, our business is going on very well. Therefore, regarding the one-off cash-in generated by the sales overhead office, yes, we will have abundant cash. And in the first half, we mentioned share repurchasing in addition to what we had already announced. So, all these are ongoing. there are only limited measures that we can take within this fiscal year. So we initially targeted for $90 billion, but the cash position may slightly go up beyond the initial target at the end of this fiscal year. That is as much as I can say on this matter. But our way of thinking remains unchanged. We will not keep the excess cash. We will make sure we utilize them. Okay, thank you. You have our expectation here, so please keep that in mind. Thank you for your question.

We would like to take questions from two more people. Ihara-san from UBS Security. Thank you for the presentation. I'm Ihara of UBS Security. Hello, Ihara-san.

I have two questions.

First is the frozen food business in the U.S. In the first half, the sales promotion was not possible, but from the second half, you said that you're going to focus more on the sales promotion, but the sales of the frozen foods in the third quarter is not really growing, so please explain the present status of this business. Let me answer one by one. First, in the U.S., as you can see, the third quarter, both top and bottom lines are not actually growing, but in the fourth quarter, we expect strong increase in the profit. There was a major promotion in the previous period, That is scheduled in the fourth quarter, and we expect impact from that. On the other hand, the current period, October to December period, the business initiatives are being operated in a good way. However, unfortunately, in November, there was a government shutdown in the U.S. and low-income households food subsidy program was temporarily stopped and there was a confusion, so November was a difficult month. December performance was very good, but there was an impact of November in the third quarter results. I understood. Thank you very much. My second question is, in the medium to long term AFK management 2030 roadmap. The March 26 is the interim period was 2030 roadmap and what were successful or beyond expectation and what are the challenges And in the full year financial results of March 26th, do you plan to update the indicators for ASV 2030 roadmap? First, on the review of the roadmap, I'm not in the position to make a comment because this is a third quarter result briefing. And once again, in the full year result briefing, Hara-san, please raise your question again. When you look at the current financial results, the forged acquisition, which was not included in the roadmap, and also there were other special factors, and 18% ROE was the initial target as the interim year, and we are close to achieving this target. organic growth although there are ups and downs currently we are likely to achieve five percent growth so we are steadily implementing initiatives and on page 12 there are indicators listed and as the interim results fi25 We are in a good phase in terms of achieving numerical targets, the background and future outlook. Please ask this question to Nakamura-san later. How are we going to do with the roadmap? The first half briefing slide was rather difficult to understand, and I'm sorry for that, but we plan to apply on rolling basis. There's one slide that explains that. If you have time, please review. The timing is not being communicated accurately, but one year later or two years later, we will do the rolling. adjustments towards 2030. Are we target 20% at 2030 on this target? 18% to 20% gives the impression that the improvement is rather small, but are you going to achieve earlier than the schedule? Are you going to be aggressive? we have not been communicating on individual items but overall the vision towards 2030 we strive to achieve early earlier than 2030 and that is the determination of all of the employees to accelerate all of the initiatives There were personnel changes, and you have made bold changes this time towards 2030. Shall we expect new news will be announced? Please keep expectations high from various perspectives. That concludes my questions. Thank you. Thank you, Hara-san, for your question.

So from J.P. Morgan, Fujiwara-san. Please ask your question. Good afternoon. This is Fujibara, Fortune FP Morgan. Thank you for the opportunity. I have a question regarding healthcare, bio and chemical business. In the fourth quarter, Agiface is going to make a contribution and Forge is growing steadily. So that is expected, but when it comes to the gene therapy, this market is going to grow going forward, we believe. Of course, there's going to be some ups and downs, quarter by quarter, but if you level it throughout the year, maybe the contribution to profit growth would be higher going forward. Would you agree? So this is not something that we have already disclosed, so it is hard for us to make a comment at this point. The CDMO business will see a contribution from the forge going forward. This is based on a proprietary technology that we have pride in, so we believe that the profit will grow going forward. And when it comes to small molecule in Europe, We have, again, unique technology and production process. And therefore, we have unique technologies focusing on specific areas. We would want to be asset light in this business. So going forward, in terms of profit contribution, starting from next year, I think you would see a steady contribution. So in the fourth quarter, this is going to be factored in in the fourth quarter just because of the timing, and therefore you have a very strong fourth quarter. But if you see throughout the year, you are growing steadily. And in healthcare, ABF. So in the third quarter, margin improved. So it was a product mix improvement and a new generation product increased shipment, thereby improving the margin, I believe. But for your company, when it comes to price increase, has this happened before or are you planning to do so? I want to ask you about the price revision. As Fujiwara mentioned, you are talking about simple price increase, correct? So, yes. So this is same as the policy company-wide. When material cost increases rapidly and we cannot absorb this cost increase internally, then we will start negotiations with the customers regarding price increase. However, the current situation is not requiring us to do so. Therefore, a simple price increase is not something that we are currently considering. Okay, understood. And one more thing, just quickly. So, umami seasoning for food processing, sanai is the sub-segment. And in the fourth quarter, if we compare year on year, this might not contribute so significantly. But looking back in history, it was a loss-making business at some point, maybe a decade ago or so. So when comparing the situation now to then, do you have any concerns or risks regarding this business again going into the red? Well, I cannot say anything for sure, but looking at the trend of profit for over a five to ten year period, I think we have shown a steady track record in terms of margin. So this is a business that is profitable and we have a business structure that supports such profitability. So we don't have such concerns at this point in time. So, yeah, you have a bottomed out. And so fourth quarter will be the bottom maybe. And you don't know when the recovery would happen. And in the short term, maybe there's going to be volatility. But when it comes to the overall company performance contribution, it's not going to pull the performance down, right? Yes. If you just look at the third quarter, figures, you see that the profit has gone down. However, if you see the forecast, the seasoning and the processed food is going to rise. And therefore, the overall seasonings and foods business has a very solid business foundation. I hope you understand. Yes, if we look at the segment overall, that is true. But when it comes to External sales, I want you to decrease that ratio and make sure that you accelerate your improvements. Okay, understood. Fujiwara-san, thank you very much. So it's time for us to close, but there is one more question, so we will take that question.

Morita-san from Nomura Securities. I'm Morita from Nomura. I'm sorry to join belatedly. I have just one question, especially related to Asia business. Can you talk about the pricing strategy and cost? Yesterday or day before yesterday, I was looking at Texaco's financial results and they, I think that they need to reduce the prices of potato chips. Is it because of the reaction of consumers to price increases? Considering your business, have you started such discussion yet? Or have discussions been started? Morita-san, thank you for the question. Overseas, consumers, the seasonings for them, we have extremely strong trust from customers. So, we have such a strong platform in the past on sustainable basis regardless of the economic growth status. Well, I believe I showed the graph on Thailand. for more than decades. Regardless of the economic fluctuations in Thailand, our seasonings continue to grow both sales and profit wise. The characteristics of our product and the positioning of our products in the market and the assessment by customers looking at those factors comprehensively and the situation that you have just talked about is not being experienced by the company looking at the numbers up to the third quarter overseas seasonings business it has accelerated to first second and third quarter and the sales is growing the situation that morita san referred to is not being experienced by the company. Towards next fiscal year, you are able to further pursue margin improvement. On the next fiscal year, it is difficult to share concrete information, but basically, we present the roadmap, which is the basic thinking The value-add type of products are highly valued by the customers, and through mixed improvement, we aim at improvement of profitability and using rolling forecast and other elements, and we have internal meeting structure, and we are evolving and making various changes and creating strong platforms Thank you very much.

Thank you very much Morita-san. So we will hear from Kaji-san who will give a final word. So thank you very much for staying with us for a long period of time. The third quarter saw a lot of progress and going forward we would like to make sure we take steady steps in achieving the roadmap, and this is going to be a company-wide effort towards that goal, I ask for your full support. Thank you very much. With that, we would like to finish today's call. Thank you very much for your participation.