Ajinomoto Co Inc

Good evening, everyone. Despite your busy schedule, thank you very much for your participation to the FY25 Final Result Briefing of Ajinomoto. I'm Goto of IR Office, playing as a moderator. First of all, I would like to introduce today's participants. New executive structure from April, of which eight members are here with us today. Representative Executive Officer, President, CEO, Nakamura. Representative Executive Officer, Executive Vice President, Kaho. Representative Executive Officer and Senior Vice President, General Manager, Food Products Division, Sakakura. Executive Officer and Vice President, General Manager, Biofarm Chemicals Division, Arashida. Executive Officer and Vice President in Charge of Finance, Mizutani. Executive Officer and Vice President, CTO in Charge of Quality Assurance, Sumurita. Executive Officer, Supervision of Frozen Foods Business, Komura. Executive Officer in Charge of IR, Kaji. Today, CEO Nakamura will make presentation on FY26 Forecast and Initiative for Enhancing Corporate Value, followed by Q&A. The overall briefing is complete. scheduled an hour and 30 minutes. Today's material could be found on IR page of Ajinomoto's website. Please refer to the material. We will be recording today's contents, including the Q&A session, and at a later date will be uploaded on the IR website. I would like to have your understanding, so we would like to start. Nakamura-san, please.

Hello, my name is Shigeo Nakamura. Thank you very much for attending today. And I would like to make a presentation. Today, I would like to discuss four major points. In fiscal 2025, as in the previous fiscal year, we set new records for both sales and business profit. Business profit continued double-digit growth. In healthcare and others, the functional materials and biopharma services and ingredients businesses saw significant increase in profit. The food products business overall, combining seasoning and food and frozen foods, also saw increased profit. In our fiscal 2026 forecast, we expect to again post new records in both sales and business profit. We are planning for growth in the seasoning and food, frozen food, and bio-infinite chemicals businesses. Although the situation in the Middle East from the end of February 2026 could affect cost and procurement, we as a company will respond flexibly and minimize any impact on our performance. Under a new executive structure instituted in April, we will further raise the human resources and organization capabilities of the group as a whole. evolve ASDB initiatives while enhancing the execution capabilities of our management and continue endeavors to achieve the 2030 roadmap ahead of the schedule. This slide presents a digest of financial results for the fiscal year ended March 31. For the full year, Both sales and business profit increased enough to set new records. Sales were 1 trillion 583.7 billion yen, 103% the level of the previous fiscal year, or 102% with the effect of currency translation excluded. Revenue increased in seasoning food in Japan and overseas. In healthcare and others, revenue for functional materials increased significantly. Amino acids for pharmaceuticals and foods and CDMO services, excluding the effect of sales for Altea, also increased. Business profit was 181.1 billion yen, 113% of the level of the previous fiscal year, or 111% with the effect of currency transition excluded. Profit increased in season food in Japan and overseas. In health care and others, profit increased significantly in functional materials. Profit also increased in amino acids for pharmaceuticals and foods and CDMO services. Profit attributable to the owners of the parent company was 134.6 billion yen, A 40.6 million gain on the transfer of the head office land and building was recorded in other operating income. This slide shows an analysis of the difference in business profit between fiscal 24 and 25. Higher revenue in coffee in Japan, functional materials, and in sauce and seasoning in Japan and overseas contributed to an increase in gross profit due to increased sales, which was a factor behind the 19.1 billion yen increase in profit. Improved gross profit margin in sauce and seasoning overseas in coffee in Japan and biopharma services, CDMO services, contributed to an increase in gross profit due to increased gross profit margin, which was a factor behind the $27.3 billion increase in profit. As for SDN expenses, we are increasing investments in intangible assets in other areas, aiming for sustainable growth in line with our 2030 roadmap. This slide presents the analysis of differences in business profit between fiscal 25 and 24 by segment. As a reference, the bottom half of the slide shows an analysis of the difference between the revised 25 forecast announced on February 5 and our previous year's performance. Looking at seasoning and food, although revenue decreased in solutions and ingredients, we secured increased revenue overall by growing revenue in sauce and seasoning business in Japan and overseas and in the coffee business in Japan. As a result, business profit increased by 8.9 billion yen, exceeding our revised forecast for the full year. In frozen food, although overall sales were on par with the previous year, business profit Business profit decreased. In North America, a number of temporary factors arose from the first quarter through the third quarter, such as the impact of tariffs and the restrained food purchasing due to the SNAP program for low-income groups under the federal government spending freeze. Also in the fourth quarter, in North America, cold waves weighed down the sales, and some products were subjected to recalls. In healthcare and others, business profit had a significant increase year-on-year of $20.5 billion. In addition to a significant increase in profits in the functional materials business, profit also rose in the amino acids for pharmaceuticals and food business and CDMO services. This slide presents combined sales for salt and seasoning and quick nourishment broken down by volume and by unit price in Japan and overseas. Data on Japan is shown on the left-hand side. Sales for the fiscal year were 111% the level of the previous fiscal year, breaking down to volume 96% and unit price 115% of the previous fiscal year, excluding coffee. Sales growth to 105% of the previous fiscal year level. Volume 104% and unit price 101%. In coffee business in Japan, volume declined under repeated price increases in response to the rising prices of the coffee beans. However, unit price growth made up for the decline and sales increased significantly to about 120% the level of the previous fiscal year. Revenue also increased in menu-specific seasonings and soups. In addition to strengthening sales promotion at stores, we rolled out a special menu campaign for CookDo, which offers cooking ideas not bound by standard recipes. We are promoting demand growth through the creation of variety in home cooking and the expansion of new usage scenarios, even in an environment where consumers aim to cut costs. Furthermore, there was a contribution from the robust sales of new products and market share growth in mayonnaise, so sales were growing overall in a very strong manner. Overseas data is shown on the right-hand side. Sales for the fiscal year were 104% the level of the previous fiscal year. Volume, 102%, and unit price, 102% of the previous fiscal year. Umami seasoning, flavor seasoning, menu-specific seasonings, and other products are showing steady growth, primarily in the main countries where we operate, also in the neighboring countries of the five key countries. They also made contribution to overall sales growth, such as higher sales of flavor seasoning in Peru and Cambodia. This slide shows the progress of ASV indicators vis-à-vis the 2030 roadmap. ROE was 17.7%, and ROIC was 11.8% for fiscal 2025, significant increases from the previous fiscal year. Excluding extraordinary factors such as the Forge Biologics acquisition and the sale of the head office land, ROE was 17.7%, and RORIC was 11.2%. EBITDA margin improved from 16.1% in the previous fiscal year to 17.1% for fiscal 2025. This slide shows the ASV indicators by segment. Overall, we are making steady progress towards our 2030 roadmap. This slide presents our forecast for 2026. We are planning to achieve new records for both sales and business profits, reaching 108% the level of the previous fiscal year. We expect increased revenue and profit in all segments of seasoning and food, frozen foods, and healthcare and others. We expect profit attributable to the owners of the parent company to be 120 billion yen, and in fiscal 2024, profit was boosted by recording the 40.6 billion yen from the transfer of the head office land With that factor excluded, profit ended up with a double-digit increase. Note that the impact of the present situation in the Middle East is not incorporated into this forecast. There's a possibility of impact in the areas of procurement costs. By responding to these flexibly, we plan to minimize the impact on our 2026 forecast presented here. Details of the specific actions are presented in the next slide, so let me explain using the next slide. Changes in the situation that has existed in the Middle East from the end of February 2026 onward could result in a certain amount of impact on the procurement cost in the forecast for 2026. Assuming that the crude oil prices remain at about $110 per barrel, and the exchange rate remains at about 150 yen to the dollar, Levels seen at the beginning of the fiscal year, we currently envision that the potential impact to be on the scale of about 30 billion yen or so. First, about the risk in the area of procurement. There could be restrictions on the procurement of packaging materials and other inputs due to tightness of supply, primarily in the food product business. To address this, we will diversify the sources of supply and work to secure stable supplies. There's also a risk in the area of costs. In addition to increases in prices of main raw materials, sub-raw materials, and food ingredients, increases are expected for the price of NAFTA and the energy prices, such as electricity and gas, and also logistics and transportation costs. To address such impacts, we were engaged in ongoing, wide-ranging, solid cost reduction and worked to minimize impacts through flexible pricing geared to the market environment. We will provide quarterly updates with respect to these impacts on the materialization of these risks and explain the progress of our actions to address them. This slide is a waterfall chart of the business profit in our forecast. The effect of increased revenue and increase in GP margin will steadily bring about an increase in gross profit, and by solidly investing for growth, we will work to sustainably grow our business profits.

This is analysis of the difference by segment for business profit forecast against the previous year's results. In seasonings and foods, we expect increased revenue from overseas. Sauce and seasonings and coffee in Japan, which will offset proactive strategic expenses such as marketing costs aimed at future growth, resulting in a planned increase in profit. In umami seasonings for processed food manufacturers, we anticipate soft market conditions to remain significant. and plan for profits to be largely unchanged from the previous year. In frozen foods, we anticipate increased revenue driven by higher sales volumes, primarily of Asian category products in North America, and plan for a significant overall increase in profit. In Henske and others, in addition to increased profit due to the continued strong performance of a functional materials business, we expect significant increase in profit in the biopharma services and ingredients. This slide breaks down the projected sales growth for the combined sauce and seasonings and quick nourishment into volume and unit price components for both Japan and overseas markets and identifies the factors contributing to changes in business profit. In Japan, sales are projected to reach 106% of previous fiscal year with a breakdown of 103% for volume and 103% for unit price. Overseas, sales are projected to be 107% of the previous period, with a breakdown of 105% for volume and 102% for unit price. To achieve medium to long-term growth, we plan to invest in strategic expenses, including marketing, while steadily increasing volume to drive sales growth. Yet, should the situation in the Middle East have an impact, in addition to cost-cutting efforts, we will implement flexible measures such as price increases and other actions as required. This slide shows the trends in sales, business profit, and business profit margin for the entire seasonings and food business, which includes source seasonings, quick nourishments, and solution and ingredients SNI. This business consists of source and seasonings and quick nourishment, B2C operations in Japan and overseas, as well as the B2B SNI business, and aims to achieve sustainable growth over the medium to long term. In FY 2025, the B2C business secured growth in both sales and profits, driving the growth of the entire business. Meanwhile, regarding the assumption for the FY 2026 forecast, we anticipate that the sluggish market condition for SNI umami seedlings for processed foods manufacturers will continue for some time. We will also closely monitor the risk of rising raw materials and fuel costs against the backdrop of falling prices for fermentation, raw materials, and fuel. In light of the situation in the Middle East, approximately 80% of the umami seedlings for processed foods manufacturers produced by our group are used as raw material for intra-group B2C products, and the soft market conditions are having a positive effect on the B2C segment in terms of raw material costs. We will manage B2C and B2B business as an integrated whole, enhance our competitiveness through productivity improvement achieved by introducing new technologies and realize sustainable growth for the entire business over the medium to long term. In FY26, based on this business structure, we will continue to pursue growth while the group as a whole would absorb the growth in the B2C segment and changes in market condition into the B2C B2B segment. Next, I will explain the growth trends of our B2C business, the overseas soils and seasonings, and quick nourishment businesses. We present data for five key countries where we operate, Thailand, Indonesia, Vietnam, and the Philippines and Brazil, using bar charts to show sales and business profits and line charts to show business profit margins. The breakdowns of sales in the bar chart on the left shows the bottom section representing combined sales of umami seasonings and flavor seasonings, while the top section represents sales of menu-specific seasonings, cooking sauces, cook nourishments, and others. As you can see from this chart, Umami seasonings and flavor seasonings have shown steady growth. In addition, you can see that sales of other products have been expanding, particularly in recent years, contributing not only to revenue growth but also to improvements in business profit and margin. In this way, by combining the stable growth of our basic seasonings with the growth of other values, we are achieving sustainable growth in our overall overseas B2C business, in these five major countries where we operate. In this way, while expanding sales of products other than umami and flavor seasonings, we are also developing products that cater to the diversifying needs of the consumers in the flavor seasonings and other products. Here is an example of our product in Thailand. In Thailand, our flavor seasonings lineup has traditionally focused on pork-based products aligned with local food culture. However, in recent years, we have expanded our product range to accommodate consumers' diverse values, including halal-certified chicken-based products and vegetarian-friendly options. Furthermore, in menu-specific seasonings, we are advancing the launch of premium varieties tailored to local dishes, such as Palo and Lab Thai Salmon's Meat Salad. In recent years, we have been actively promoting amino-vital products, to target people engaged in sports. Next, let's look at the neighboring countries of the major five key countries. This chart shows the trends in sales and business profit margins for the neighboring countries, excluding the five major markets where we operate. As you can see, sales are growing strongly even in countries outside those five countries. In FY 2025, sales in neighboring countries accounted for more than 20% of our total overseas sauce and seasoning sales. In neighboring countries, such as Peru and Malaysia, have already grown to a scale rivaling that of major markets, and as these countries increase their presence and emerges growth drivers following the major markets, their growth is accelerating. To date, our group has expanded our overseas business by building local trees and establishing sales networks led by local staff to offer products rooted in local food cultures and preferences. Currently, in countries and regions with food cultures similar to Thailand, such as Laos, we are expanding our business into those new markets by exporting products manufactured in Thailand, utilizing an asset-like business model. Furthermore, we are strengthening our local staff structure in line with business growth and enhancing sales capability through efficient marketing initiatives, including the use of social media and other channels. In this way, we are advancing our expansion into neighboring countries by evolving the Ajinomoto Group's existing model for overseas business development, which centers on establishing products rooted in local food cultures and preferences, and locally-led sales networks, and we will use this model to drive medium to long-term growth. Next slide shows the frozen food business. In fiscal year 2025, combining Japan and overseas markets, overall sales increased slightly, while profits declined. This was due to the several temporary factors in North America. Impact of tariffs in North America during the first half of the year reduced grocery spending, resulting from the suspension of the supplementary Nutrition Assistance Program SNAP for low-income households, which was affected by the federal government shutdown, as well as the impact of cold waves in Q4, and recalls of certain products in North America. I would now like to explain the recall situation. In February of this year, we received inquiries regarding class fragments found in specific products sold at chain stores in North America. We immediately reported the situation to the U.S. Department of Agriculture. USDA, and conducted an investigation into the cause. The investigation revealed that minute glass fragments, too small to be detected by inspection equipment, had been mixed into some of the raw materials used in affected products, which were subsequently shipped. In response, we promptly recalled the affected products and provided a detailed explanation of the cause and our response to all relevant customers. who have expressed their understandings. Furthermore, in light of this incident, we have reviewed our inspection processes and strengthened our quality control systems to mitigate the risk of foreign object contamination. We're also moving forward with introduction of inspection methods capable of detecting foreign objects that are difficult to identify through conventional inspection methods. In addition, we have conducted a comprehensive review of our entire quality control process and are working to prevent recurrence by enhancing the precision of management at every process from manufacturing to shipping. During fiscal year 2025, there were periods when products were not available on store shelves while we provided explanations. However, we have now resumed shipment of all products. Expenses incurred in fiscal 2025 in connection with this matter were recorded under other operating expenses and we anticipate that the impact of this recall on sales and profit in FY2026 will be minimal. Over the past 25 years, our group has steadily expanded the sales scale of this business, both in Japan and overseas. In 2014, we acquired the current Ajinomoto Foods North America, Inc., and have been actively expanding our North American operations. Since then, we have strengthened our business foundation through the promotion of an asset-like strategy, For FY2026, we anticipate increased revenue and profits in Japan and overseas. In North America, the Asian food category is expected to grow at a rate exceeding that of the overall North American frozen food market. We will aim to return to growth and expand our business by launching new products, primarily Gyoza, and further strengthen the Ajinomoto brand. We view the frozen food business as a key pillar of our group, both in terms of enhancing our corporate brand value and contributing to our customers' well-being. In Japan, frozen foods, including gyoza, serve as a key touchpoint between consumers and Ajinomoto brand. In addition to our standard products, we offer microwavable gyoza as well as Aete, a line of nutritionally balanced frozen meals featuring approximately 60 varieties, striving to balance convenience with health benefits. In Europe and the U.S., we are also promoting Japanese-style Hane-style gyoza as a new offering, contributing to well-being through a wide range of food choices. Ajinomoto brand awareness in Europe and the United States has reached approximately 10%, expanding to a level where we can reliably reach specific target demographics. Most recently, the largest premium retailer in the U.S., which operates approximately 600 stores, decided to adopt our group's frozen foods. This outcome is the result of our continuous product proposal, which have led to the recognition of the value of our Japanese food offerings, and we believe it will serve as a footfall to further enhance our expansion. We view this development as evident that opportunities for higher value-added expansions are growing in U.S. market, and we recognize this as a positive step leading to the future initiatives. Given this brand value and expansion of our business foundation, this slide outlines our mid- to long-term plan for enhancing corporate value in the frozen food business. Looking ahead to FY30, we aim to achieve an ROIC that exceeds the current level by approximately 3%. At the same time, over the medium to long term, we will work to transform our business structure so that we can stably maintain an ROIC that sufficiently exceeds our cost of capital. To date, we have steadily strengthened the business foundation of our frozen food business through continuous sales growth, the expansion of our North American operation, and the promotion of an asset-like model. We recognize that this frozen food business makes a significant contribution to enhancing the brand value of the entire group. Given that our products have been selected by premium retailers in North America, we believe we can continue to achieve growth through business expansion primarily in overseas markets. Based on this current situation, our future business strategy will focus on three main directions. First is innovation in deliciousness, driven by technological lead. We will apply the deliciousness technology cultivated in our seasonings and fruits business to frozen food business as well, Further refining deliciousness and enhancing our competitive advantage by differentiating ourselves from competitors. Second is improving productivity through the thorough pursuit of a pressure excellent. We will apply the production management methods such as process control and know-how for improving efficiency, develop the Ajinomoto frozen foods, our primary domestic frozen food business entity to achieve a balance between profitability and capital efficiency across the entire group. Third, we will further strengthen productivity our business foundation, we will enhance our ability to adapt to growth markets while advancing the sophistication of our business management to establish a framework that supports sustainable growth. Through these initiatives, we will raise ROIC by FY30 and evolve our frozen food business into one capable of creating values that exceed the control or capture of other meat to long-term.

Now, the health care and other segment, the functional materials. Sales for the higher performance boards for AI servers and networks were strong throughout 2025, yielding significant increases in both sales and business profit. In terms of profit margin, products for high performance boards and high value-added products are growing as well, and the product mix is also improving. Next, I would like to discuss the evolution of semiconductor packages in which ABS is used. The information on this slide presents estimates by a company based on external materials and other sources. Since ABF was first adopted for PC applications in 1999, semiconductor package substrates have become increasingly larger as high-performance semiconductor chips have advanced. As shown here, the surface area and the number of layers increase in package substrates. The area and the number then the amount of AB use increases dramatically. From 2031 onwards, substrates are expected to further increase from the current sizes, which we believe will lead to increased demand for ABF. I would like to share some thoughts in detail regarding the ABF strategy going forward. Since launching the ABF business more than 25 years ago, we have been building relationships in which we create value together with our customers, And alongside achieving high market share we enjoy today, we have continued to sustainably expand the value of the business. We believe it is precisely these relationships which constitute a formidable barrier that many companies seeking to enter the ABF business find difficult to overcome. One great manifestation of this value creation relationship with customers is the high-speed development system. The high-speed development system is a project methodology in which we proactively advance research and development while anticipating the needs two years ahead. This enables us to complete development speedily and make proposals to customers as soon as the demand or needs arise, and this system has been built through strong and deep co-creation with our customers. By co-creation with customers, we make comprehensive proposals that include product pricing from the outset. Development is carried out not only with a focus on improving performance levels, but also a careful alignment of the costs required for such improvements and the resulting unit prices. In other words, the high-speed development system In this system, performance and prices are closely interconnected and they are inseparable from each other. Accordingly, the sustained improvement in unit prices within the ABS business have been achieved as higher-priced products have come to account for a larger proportion of the product As a result, the profitability of the functional materials business centered on IABF business has improved from approximately 30% around 10 years ago to now about 50%, enabling us to continue to sustain growth in business value. In cases of raw material or utility cost increases, we will provide careful explanations to our collaborating customers and will pass on such cost increases properly based on their understandings. However, raising unit prices solely for the purpose of improving our short-term profit margins risks significantly damaging the ecosystem we have built with our customers through the years of co-creation. Specifically, it will not only undermine the very foundation of our strengths, namely the high-speed development system, but could also incentivize our customers to turn to competitive products. Today, we announced a plan to acquire land in Kifu Prefecture for a new production facility that will serve as a third base after Kawasaki Plant and Gunma Plant. This investment will target expanded demand from 2030 onwards, with a start of operation scheduled for 2032. Last year, new manufacturing facility commenced operations at the Gunma Plant, and on June 30, we plan to hold a virtual tour of the plant, together with a briefing session on the ABS business. We hope this will provide a valuable opportunity for you to deepen your understanding of the future potential of the functional materials business. So if your schedule permits, we will be most pleased if you could participate in this event. Second, the biopharma services and ingredients business. This slide shows sales over time for each modality. Towards 2030, we are aiming for dramatic growth by expanding Agiphase, which is for medium monocule and nucleic acid drugs, and for the gene therapeutic process, AgiCap, and other projects, while also sustainably growing small molecules. This slide shows the status of biopharma services or CDMO services by geographies. Looking first at 2025 in Europe, living and property increased primarily in small molecules. In Japan, we shipped APIs for nucleic acid drugs on schedule in Q4, and four-year revenue and profit increased as a result. In North America, Forge, orders were strong in fiscal 2025. Their business is progressing smoothly towards mid- to long-term growth, with sales growing significantly at about 1.5 times from the previous fiscal year level. As for the plans for fiscal 2026, we expect increased revenue in all regions, Europe, Japan, and North America, and expect significant growth in overall profit. By region, in Europe, contributions will come from our mainstay small molecules as well as from our agiface mid-medium molecule proprietary technology. In Japan, we expect agiface as well as Agiscap and other products will make contributions, and in North America, we forecast sales growth and positive EBITDA margin. When we compare the 26th quarterly sales to 2025, we expect revenue increases to grow in the order of Q3, Q2, and Q1. Conversely, in Q4, we expect revenue to decrease from the same quarter in the previous fiscal year, which we saw a major increase in sales from shipments of APIs for nucleic acid medicine. Similar movements will occur in profit as well, and we plan for a significant increase in profit for the full year for fiscal 2026. This slide presents the progress of FORGE's initiatives. By evolving new technologies, FORGE is working to improve productivity of existing gene therapies while steadily expanding the breadth of gene therapies by adapting to new treatment approaches. To enhance productivity, FORGE has cooperated with the laboratories at Ajinomoto Company to develop new culture media supplements that enhance the productivity of viral vectors at the core of the gene therapy. Forge is highly evaluated by its customers for its high productivity compared to other companies. With its latest initiatives, the company has further boosted its strength, i.e., its high productivity, and continues to earn customers' praise. Forge is expanding the areas that gene therapy can address by advancing adaptation to new treatment methods. In addition to high productivity, with technical adaptation capabilities as its strength, the company will expand pipelines by being selected by more customers. In March 2016, we entered into a manufacturing partnership with Progeria Research Foundation regarding a gene therapy for Progeria, a form of rapid aging disease, with Progeria We view this initiative not only as a concrete step towards developing a new treatment method, but also as a societally significant initiative that will advance the social implementation of gene therapy, cutting-edge medical treatment in the field of rare diseases. With these initiatives, we will expand Forge's business and will connect it to positive EBITDA in 2026 and also to meet the long-term growth in sales and profit. Next are Avicap Antibody Drug Conjugate Technology, ADC Technology, one of our group's proprietary technology based on aminofiance. This business made a steady progress in fiscal 2025, including the finding of new licensing agreements with multiple companies. We are currently strengthening initiatives aimed at mid- to long-term sales expansion. Specifically, we had begun strategic collaboration with CROs and CMOs Which are the companies playing an important role for ADC development? CRO is a partner that is contracted by pharmaceutical companies to perform technological selection and experimental design in the early stages of development. By collaborating with CROs, we will expand opportunities for the adoption of AgiCap from the early stages of development. CMO is a company contracted to manufacture pharmaceuticals bearing the key functions of manufacturing development products and launch products development. By collaborating with the CMOs, we aim to speed up the development of pharmaceuticals using AgiCap and, going forward, establish a manufacturing environment capable of supporting the manufacture of a wider range of pharmaceuticals. In fiscal 2026, we plan to solidly connect these initiatives to outcomes and raise the business to a scale of in the order of billions of yen. This slide shows the 2026 forecast for the ASV indicators vis-à-vis the 2030 roadmap. ROE and ROIC are estimated to be 15% and 11% respectively. We expect organic sales growth in fiscal 2026 to be about 9%, significantly higher than the growth rate of 5% projected for the period between 2026 to 2030. This slide presents our 2026 forecast for ASPE indicators for each segment. We will continue to have appropriate financial leverage that will contribute to organic growth and capital efficiency. Assets and liabilities here. This is the operating cash flow for 2025, which was $239. exceeding a forecast of 220 billion yen, setting a new record. Profit before income taxes in 2025 increased by 88 billion yen approximately, and even with an increase in corporate tax payments, overall operating cash flow increased from the 209 billion of the previous fiscal year. In the mid to long term, we will further grow EBITDA, improve working capital, and have a sustainable growth in operating cash flow as a result of that. In fiscal 2025, again, we made growth-oriented capital investments, which totaled about $103 billion. In fiscal 2026, we are planning capital investments of about $130 billion. We will continue proactive investments in tangible assets for our mid- to long-term growth as well.

This slide shows key management indicators and the purpose for the management by mid-term ASV initiatives 2030 roadmap. ROE and ROIC were impacted in FY2025 by the recognition of a gain on the transfer of the land and building housing our headquarters. Normalized EPS based on business profit also showed solid growth in fiscal 2025. This slide covers capital allocation. While enhancing our cash generation capabilities through sustainable business growth, we are allocating resources prioritizing capital efficiency in accordance with our roadmap. We expect operating cash flow for FY2026 to be up about 230 billion yen. While focusing on growth investment aimed at organic growth, we will proactively implement shareholder returns and strive to enhance corporate value. Furthermore, we remain committed to achieving the goals set forth in our roadmap, triple EPS by 2030 compared to 2022, and will work steadily toward this objective. Next is regarding shareholder returns. We have adopted a progressive dividend policy under which we do not reduce dividends, but instead increase or maintain them in line with grossing business profits. The dividend for FY2025 was 48 yen per share, an increase of 8 yen from FY24. We plan to pay a dividend of 50 yen per share for FY26, an increase of 2 yen from FY25. Regarding share buybacks, we are currently repurchasing shares announced on November 6, 2025, with a maximum limit of 80 billion yen. From this slide, I will explain our initiatives aimed at enhancing corporate value over the medium to long term. First, let's review FY25. After taking office last year, we identified not enough concrete medium to long-term strategies as a company-wide challenge. Through the cross-swaps was what analysis shown on the left. Using this as a starting point, we have spent the past years engaging in extensive discussions regarding the company-wide management issues and the direction of our next actions. As a result, we have made progress in formulating a strategic vision for the medium to long-term and clarifying key issues. I feel confident that we have reached the stage where we can outline specific directions for future actions, including the organizational structure required on a department responsible for execution. At the same time, we have recognized that there are inconsistencies in execution capabilities and the pace of transformation across our business units and regions. Moving forward to further improve the effectiveness of the action plan we have developed over the past year, we believe it is essential for management to elevate the company's overall capacity to fully execute our strategy. Based on this assessment of the current situation, we positioned FY26 as a year in which we will translate the trustee concept discussed so far into company-wide strategies and fully execute them. Today, I would like to explain the progress of our initiatives regarding the first of these seven strategies, the medium to long-term growth strategies, the fourth, speed-up and scale-up organizational execution capabilities, and the seventh, strengthening corporate governance and compliance. First, regarding our medium- to long-term growth strategy, in FY26, we established a new body called the Company-Wide Growth Strategy Committee to deepen our discussion on the overarching direction of our company-wide growth strategy. As an internal initiative this fiscal year, we will continue to deepen discussion on major medium- to long-term directions, including post-2030 during executive training sessions and other forums. At the same time, by discussing the roadmap's goal progress and initiatives across the entire company, we will refine our company-wide strategies. To foster new businesses, rather than simply increasing the number of initiatives, management will focus on commercialization and prioritize and concentrate our efforts on initiatives that will lead to future growth businesses. In this way, we aim to balance both quality and the speed of innovation. While mechanisms for developing new businesses have existed in the past, this fiscal year we launched InnoSeed by Ajinomoto as an internal accelerator program dedicated to creating new businesses. We will identify promising ideas and technologies within the group that have not yet been commercialized and nurture them into viable business. Going beyond mere idea generation, we will swiftly assess and decide on businesses and business viability for themes with gross potential, to commercialization. Next is speed up and scale up organizational execution capabilities. This fiscal year, to enhance our overall strategic execution capabilities, we will also work to transform our management structure, including human resources organization and governance. We appointed Vice President Cahill, who is attending today's briefing, as CHRO, with an eye On our mid-to-long-term growth and direction of our desired future state, we will continue to evolve our human resource strategy. Regarding our global structure, we will evolve our organization into a decentralized, autonomous, and connected organization or DACO model network, and we will balance the strong local entities across our global locations of businesses with a centralized structure of our headquarters. Regarding strengthening corporate governance and compliance, we have established new regional compliance committees as subcommittees of the Group Compliance Committee, or GCC. As our business expands globally, we will evolve our structure to enable risk identification and initial response based on regional realities, including laws, regulations, practices, risks, and other circumstances, and to implement the Group Compliance Committee's policies into each region. Through this structure, we will maintain and improve our global governance standards while enabling each regional headquarters to conduct risk assessment and initial responses that inform business decisions. At the same time, by allowing headquarters to focus on oversight and company-wide decisions, we will accelerate decision-making process and build a system capable of executing global operations with consistent speed and quality. The future on this slide capture my interaction with employees around the world over the past year. I place great importance on meeting with employees in person to understand the front lines. Since taking office, I have engaged in dialogue with more than 4,500 Ajinomoto Global employees in total. I believe I was able to share my own experiences of challenges and failure while also directly conveying the vision the Ajinomoto Group is striving to achieve. I received more active questions and candid feedback from employees than I had expected before. This not only deepened my understanding of the front lines, but also allowed me to gain a clear perspective on the differences between various businesses and departments. In FY2026, we will further deepen discussions on mid- to long-term growth through initiatives such as company-wide growth strategy meetings, etc. While flexibly adjusting our company-wide growth strategies, we will work to enhance our organizational overall execution capabilities. We will evolve our ASI initiatives to ensure the steady achievement of the 2030 roadmap. At the same time, through discussions at the executive meetings and other forums, we will link the 2030 roadmap with post-2030 initiatives and take on the challenge of creating new businesses to drive mid- to long-term growth. Finally, this is a message from me. We will accurately assess various changes in the external environment, respond to agilely and steadily achieve our goals, FY2026 focus. Regarding the 2030 roadmap, we will continue to strive to achieve our goals. Ahead of schedule, we will thoroughly implement our high-speed and channel approach to further accelerate business growth in both food and biofarm chemical segments. Furthermore, we will enhance our conceptualization and execution capabilities to accelerate the creation of innovations aimed at mid- to long-term growth. Think well, do well. That concludes my presentation. I would appreciate any questions. Thank you.

Mr. Nakamura, thank you very much. Now we'd like to move on to the Q&A session. First of all, I would like to explain how to raise a question. If you have any questions, please indicate by the press raise hand button that's shown on the screen. We would like to nominate a questioner from our side. If you are nominated, please unmute yourself and make your statement. Those of you participating from overseas or those of you joining the app, English channel, you can ask your question in English. We'll be responding to the questions through simultaneous translation. We would like to limit the number of questions to two questions per one time for one question. We appreciate your understanding. If there are so many people who would like to ask a question, we may not nominate every one of you. Please be advised of that in advance. Now we'd like to begin the question and answer session. If you have any questions, please indicate by the press of the raise hand button. Now we have to go to the first question, which will be from Saji-san of Mizuho Securities. Thank you very much. I have one question. Regarding ABF, this is a question related to ABF. This is on page 26. You talked about the advanced packages for the AI applications. and you have this expansion strategy, and that will have impact through 2030 and beyond. But on the page before that, on page 25, you say that separate servers and networks will continue to drive your performance, and the top-line growth was quite significant in the third quarter and fourth quarter. As for the AI applications in 2026, what is the proportion of the AI applications demand for ABF and what is the contribution in 2030 according to your projection? So can you give us some indication as to what proportion of those applications in the future? That's my first question. Mr. Saadi, thank you very much for the question. As for ABF, on page 25, if you look at the bar chart, AI-related AI servers and high-ends are This is included in that section. According to the information that we have, AI applications account for 15 to 20% or so, according to our current estimate. This is increasing significantly compared to last year, so how further this will increase from 2030 is something we don't know yet because the investigation team does not have the information available to them, so we cannot give you a precise forecast, but we believe this could potentially double, according to my personal prediction. Thank you very much for that. Recently, NTT's ION, ion metric, the optical electrical convergence commercialization 2.0 has already been making progress. So, Mr. Nakamura, you have voiced your expectations to NTT's ion project on many different occasions. The schedule is now becoming quite revealed. So if it's 3.0, it's going to be 2028. Then 4.0 is expected to be introduced in, say, 2032. So devices projection is now becoming quite clear with ION project. So why? Do you have high expectations for MTT's ION project? If you can just quantify its economic impact for, let's say, for fiscal 2028, the number of layers will have a contribution, I believe. So what is the economic impact you're expecting of ION from MTT? If you can elaborate on that, that would be appreciated. Yes, thank you very much for the question, ION. As we have explained before, We, too, are participating in the ion project. The electro-optical convergence materials and sample work has already started its development and production. This application for electro-optical convergence, how further this will increase in the future and replace the existing solutions is something we cannot calculate completely yet, but I believe Not everything is going to be placed with this optical electroconvergence, but given the projection of the customer in 2030 and beyond, ABS demand, we can expect a steady growth from 2030 and beyond. So the existing AI servers and existing networks will continue to be the mainstay demand for 2031 onwards. Is that correct? Yes, correct. Thank you. I got it. Thank you very much for that.

Thank you very much, Saji-san. Next question from from Goldman Sachs, please. This is from Goldman Sachs. Thank you. I have two questions. First, I would like to ask about functional materials. Previous year, at the outset, sales 11% up and profit 8.2% up. And the landing was 32% and 36% increase for profit. And in the fourth quarter, I think we had increased the sales This year plan sales and both profit is 10.8% growth and that was the assumption. Is there any sign of slowdown or do you think that the cost will be higher than the previous year? Well, I would like to see and know the background, why it looks slowing down. And, of course, can we expect that it will be increased later in the years, as we saw in the last year? Miyazaki-san, thank you for your question. Yes, for functional materials, planning sales and profit, we provide, we have... customers' information and WSTS. This WSTS is the information that we refer to. And for last year, we had referred to those information. December was the latest WSTS information. Based on those information, last year, yes, we had increased profit and sales, and that was a result of that. I think that matches with the revised forecast. Initially, logic ICs increase was not so big from WSTS, but during the year, there was 30% of increase in the logics. That was a forecast from the WSTS, and we got the result, and that was correct. FY26. Though, looking at the global economy, I think, of course, our plan is a bit conservative, but the information from our customers and the information from WSGS, we would like to update our plan. Thank you very much. Another question is for overall business. This is on page 37. You talked about normalized EPS and EPS. For this, yeah, you have the gap. Why do you have this gap? I want to know the cause of the gap. I'm not too sure about this. I would like you to explain about this. Do you have to spend for any restructuring or... In the past two years, as was mentioned earlier, you had business sales gains, and in 2024, you had restructuring costs included. So I would like to know the gap between EPS and normalized EPS. As a starting point, continuously, I'm sure that you are increasing ROEs, and we fully recognize this, but the initial gap a year plan, whether it be ROE or whether it be sales or net profit, it looks too low. I would like to know the factors behind this, why it looks so low. Thank you for the question. The gap, the big gap in FY24 is because of the sales of Altea and its impairment. Yes, thank you very much. This is Mizutani speaking. The normalized EPS is based on the calculation format as is written here. We make a coefficient and we would make 35% is the coefficient that we made. The difference here, there are some factors. One of them is that Earlier, I mentioned about we doing business and growing business in emerging countries. And in the emerging countries, in doing business, we have to respond to the foreign exchange effects. In a certain country, we have to acquire hard currency, and in acquiring that, we have to pay the cost for that. And that expense is one of the reasons for this difference. and there are some other factors so those costs are all added up and I think in the coming years we would like to minimize these costs and explaining I think multinational company the finance department is always struggling how to minimize these costs so I think we would like to evolve and advance so that we could minimize these costs so that we would like to increase the EPS. Thank you. So, in that sense, in this new year, other expenses, operating expenses, you are not any including minus negatives in this? Yes, yes, we're not. So, with this pace, the business profit... 10%, mid-10%, EPS triple. That was the image that you explained to us. I think for this year's plan, or for FY26, you have not changed it, and you are not changing the goal for 2030, or is this a special year that you're not having accelerated growth? Yes, as you say. Yes, I've talked about the foreign exchange factors. Other than that, we have other factors. One factor is the equipment and facilities writing off. We want to minimize those costs towards 2030. So EPS, we want to converge this thing to normalize EPS. Thank you very much.

Thank you. Now moving on to the next questioner. This will be from Daiwa Securities, Igarashi-san. Hello, this is Igarashi from Daiwa Securities. Thank you very much for appointing me. I would like to ask two questions as well. The first question is, The impact of the Middle East situation, if you can give us some more details. If you look at page 13 of the presentation, you have talked about the $3 billion impact potentially. The crude prices and also the currency rates that you are sending for is already presented here. Of course, day by day, it fluctuates quite heavily, so I think it's very difficult for you to make a precise prediction. But this size of $30 billion... Will you say this is a worst-case scenario, or what would be the impact if you make a conservative prediction? This is a conservative prediction, by the way. So in reality, what do you think it will come in at, and what will be the landing number if you have that kind of prediction? Thank you very much, Igarashi-san, for the question. On page 13, as you rightly pointed out, These are the assumptions, the crude prices as well as the currency rate. If this continues from the beginning of the year all the way to the end of the year, with that assumption, the negative impact is estimated to be 30 billion yen or so. Okay. We're not optimistic. We're not pessimistic here. This is a neutral projection, including the ingredients as well as the raw materials or sub-raw materials as well as the energy costs as well as the NAFSA prices and other energy and transportation costs. The negative impact is estimated to be 30 billion yen. Other companies in Japan have also made a similar prediction, and that was about 50 billion yen. So we would like to make proper measures and be able to offset that. So 30 billion yen is the calculation that we have made so far, but we would also like to consider a proper content measure so that we can deliver on the forecast that we have given to you. In terms of the content measure, you said? I'm sure you are working on a lot of cost reduction measures, but the price revisions, would you say, would be the major countermeasure that you're contemplating right now? Of course, a cost reduction will be conducted on an ongoing basis, but if you are not able to absorb them, we would like to pass on them adequately to the prices. Thank you. One more follow-up question. The cost deterioration is not factored in in the guidance numbers you said. but in your segments, in the seasoning and foods business, sauce and seasonings, and also for quick nourishment and F&I, all these segments or sub-segments are expecting a slight reduction, I think. That is the assumption, is it? Is there any deterioration factor for the cost ratio? Basically, we would like to make investments for R&D and marketing in order to ensure growth in the future. So those are taken into consideration. So the Middle East situation is not factored in here. So the impact of the Middle East situation will be updated to you on a quarterly basis going forward. Okay, understood. Thank you very much. My second question would be myopharma services business. So I would like to ask a question about this. In your current year plan, you are expecting a profit increase, and this is going to make the biggest contribution for your profit increase, the biopharma services, I believe. In your explanation in the slide, unlike last year, the pace of revenue and profit growth is going to accelerate. What is the difference? What is going to change since last year? Are you foreseeing a big project? Is there a big project in the pipeline, or do you have a solid conviction that you are able to deliver these numbers? What has changed significantly from last year, there's nothing like that, but we have steadily been making progress in this business. The small molecules, we have captured good customers, flow reactors, generating new values, and be able to achieve growth in the small molecule business. As for Agiface and other media molecule, we are going to grow this business to get with customers, and Forge is going to make a great contribution with larger number of customers, And commercialization progress is making good, steady progress. So we are getting into new phases. So towards commercialization, we are accelerating their pace. So, therefore, FORGE is always good at making a good contribution for profit and revenue growth. Arashira-san can also supplement. He's the head of the biopharma business. Yes, certainly in this business we are expecting a huge growth, especially... The CDMO, especially the forage revenue and the sales profit contribution, is going to be making the largest contribution, followed by small molecule and also the medium molecule in Japan. Likewise, and also the amino acid for food and pharmaceuticals is also making a good contribution because of the high value-added products that are going to make a good contribution. So those are the factors behind this growth for this year. Thank you very much for the detailed explanation. Thank you very much. That's all for me.

Thank you very much, Igarasan. Next is a question from the English webinar. Maklish San from Bernstein, please.

Hi there. You've talked about having enough ABF capacity to keep you going through 2030. But is that comment that you've made before, is that based on this kind of mid-teens growth rate? Or are you thinking about more of a transformational growth when you look at longer-term planning for the ABF business? And... You've got a pipeline of expansion projects happening already. Can you help us understand how much more scope there is over and above those in the next three or four years? Or do we have to wait until the Gifu plant as the next kind of incremental addition to ABS capacity that's possible? Thanks very much.

Miklis, thank you very much. As for the capacity, last year, GUMMA had started its operation. The new plant had a very successful launch. And as was mentioned to you earlier, currently Kawasaki and GUMMA plant, both of them, eight hours, they're having one line. The capacity is full and it is being operated. I think it can grow more. So the productivity growth for the existing facilities or maybe some overtime and changing the shifts could afford this. The GIFU plant is after 2030. It is assuming a bigger demand. So in FY2032, the GIFU plant will start this operation. So this is to meet the demand after 2030. That's the role of the GIFU plant.

So just maybe the first part of the question didn't come across, but is your plan through 2030 based on the run rate of your guidance or is it based on more transformational growth? Because if you're not planning for something beyond your guidance, then there seems to be quite a risk that you won't be able to supply. So I just wanted some comfort that you can actually satisfy the demand that's maybe likely to take place.

Well, I think we need more capacity than the guidance or else the customer will not be satisfied. So, always, we have a capacity more than what we have been provided in the guidance. So, we can keep this pace until 2030. Okay.

Thanks very much. And then a question about the cost of goods sold pressure. So... Obviously, can you give us an indication of which business divisions you think are going to be most intensely hit by the cost of goods sold pressure if the scenario, the 30 billion scenario plays out? And then within those divisions that are going to be most acutely impacted, are there any particular kind of seasonal price increase timings that you need to be thinking about? Because these costs seem to be hitting already. in many cases, and I just want to understand where we should be looking for that pressure to come first.

Thanks. Well, page 30, it shows the cost risks. You can see the major and sub-materials. This is aginomoto amino acid fermentation material. So the main is the sugar and tapioca the sugar canes these are the sugars of the grains and of course alkali and acid and these are the sub-materials with the middle east conflict these prices may go up and then it will hit the Ajinomoto production and of course for the food raw materials This will hit all the food-related items, including the frozen food. And for the packaging material, NAFSA price increase. Yes, this will impact for all of the businesses. And, of course, energy and logistics, they will impact all. That specific business will be hit, but as mentioned earlier, each of different materials will provide different impact to different businesses, and all of them added together makes 30 billion yen impact.

Okay, great. Thank you very much.

Thank you. Thank you very much, Mr. MacLeish. Now moving on to the next question. This will be from Morgan Stanley, MFG, Tsunoyama-san. Please begin your statement. Thank you. This is Tsunoyama from Morgan Stanley. I also have two questions. First, sorry for this persistent question regarding functional materials. You talked about your philosophy for prices. Nakamura-san explained that in detail earlier, but I would like to check on the facts. In the past, due to the raw material increases, you raised our ABF prices. Do you have such track record in the past? Any price increases resulting from cost increases? I would like to confirm that point. So that kind of – what is the hurdle of raising those prices? Do you set any profit margin? What will trigger any price hike? If you have any philosophy behind that, that would be appreciated. Okay. Why don't we go one by one? Yes. Okay. Thank you. Sonayama-san, thank you very much for the question. First, in the past, Do we have any track record of raising the ABF prices due to the raw material costs? No, we don't have any such cases. We don't use glasses or copper foil, so we have never done any universal price increases because we don't use such raw materials. So ABF, first of all, We co-create together with customers, and also we align on the prices as well as the performance, and we decide on them on a case-by-case basis together with customers. So it's nearly like a customized approach. So we don't have any universal price increases here as a methodology. We align with the customer and also agree on the cost to deliver the green performance. So that is the starting point for the performance. So the prices already started inclusive of the cost for production. So when the mass production effect comes in, the price will come down. That is the style of the ABS materials. When something new is going to be created, the ABF with the higher prices will be launched, and then that will improve the product mix, and that's the reason why we are enjoying this high profit margin today. Okay. Then if that is the case, Mr. Nakama, you mentioned that if the cost increases, you talked about the potential of raising the prices. Is it because the cost environment has changed from the traditional environment? Yes, indeed. NASA prices is increasing, and as a result, the film price is increasing, packaging price is increasing. So if that happens, really, we will have to pass demo in an adequate fashion to our prices. Okay, got it. Thank you. I understood. Okay, my second question. The Middle East impact. I would like to ask this question again. Okay. In comparison with the Ukraine case, I would like to ask this question. Compared to the Ukraine war, the assumption regarding the cost, the Ukraine case was about $50 billion, you said. Compared to the Ukraine conflict, if you consider the external factors and the internal factors, do you think the capability to pass on the costs Are you better equipped to do that right now compared to before? If you can share your thoughts about that. Like the rolling forecast, how well this is penetrated in society. Are people more ready to receive the pass-on costs? Or because of the B2B proportion increasing, are they more accepting these price increases? And also... Southeast Asia and economic situation is becoming larger. Is there a larger risk compared to the time of the Ukraine war? Well, the Middle East impact, the situation is changing day by day. So we have to keep a close eye on the changes. And in order to monitor the situation, we have already established a project team inside the company. So we are looking at the daily situation and take proper measures as necessary. So that is the basic assumption. So there are external and internal factors, but the rolling forecast, given the current situation and taking a, we are, this is quite effective to take countermeasures. So the rolling forecast, we reflect the Middle East situation in the rolling forecast. This is already instructed to the entire company. As for the passing on the prices, there are things that are easy to do and things that are not so easy to do. Price-sensitive products are difficult to pass on, relatively speaking. But last year, in the frozen food, we passed on the prices, and then the results were not really favorable for us. So we would like to look into the acceptability of price increases as we decide on any pricing hikes in the future. Okay, I understand. Thanks. Well, then, as for MSD, so sorry for going back and forth. For MSD, Nakamura-san, you mentioned earlier that the demand and supply situation will relax, and that will be more positive for B2C business, given the Middle East situation and the crude prices gradually rising. Is that the case? The Middle East situation, not only us, The MSG prices MSG prices are increasing globally overall. So the Chinese manufacturers still have a large production capacity that remains unchanged. So therefore the competition is still there and We believe the market situation is softening in our view, but the overall level is increasing. So for the B2C market, this is going to be a positive impact without having a significant impact on us.

Thank you very much for the question. So we would like to receive next question. Samokwe-san. Bank of America. Yes, B of A, Samogoye speaking. Yes, I can hear you. Thank you. The fourth quarter result. I would like to confirm the fourth quarter result. As for the sauce and seasonings, the third quarter was very good, and I think profit accelerated in the fourth quarter. The sauce and seasonings, quick nourishments, SNI, I would like each of them to know what's happened, and the U.S. This was so far having the losses, but now making profit. I want to confirm the reason for that as well. Are you talking about the fourth quarter? Yes, the fourth quarter result. They saw some seasonings. I want to know in detail about the situation. If it's difficult to answer, I will change the question. I'm sorry. I'm sorry. The fourth quarter result... You want to know the reason for the increase in U.S.? Yes, by region. In the fourth quarter, sauce and seasonings, U.S., you had increase in sales. I think the trend is different from the past. The Brazil, the cost down, cost reduction effects or efforts is being reflected now. Is that so? So, Kajisan, please. Thank you for the question. It's fourth quarter. When you talk about that three months, it is just versus the previous period. B2C Brazil, I think it made increase in profit, sales, and as you mentioned, the... umami seasonings for the processed food in South America, Latin America, yes, the profitability increased. Several factors were added and thus made increase in profit in the U.S. or the Americas. Thank you. Based on that, I want to ask a question about the plan for this year. Yes, seasonings and foods, the Profit is not going to see much increase, but you're not including the costs. I did not understand the reason behind this. The fourth quarter and the third quarter was good. So I thought that seasonings and food, especially sauce and seasonings, would improve. the positive factor, and excluding the cost, how should I think about this? So Mr. Sakakura would like to respond to this. Sakakura speaking. This time we are enjoying a bit of a profit here, but as was mentioned from Mr. Nakamura earlier, yes, we want to make growth investment. That's one big thing, especially marketing. We want to... accelerate investment in marketing, and because of that, we will see a decline in profit. But top-line will grow steadily. For example, on page 17 slide, the past sauce and seasonings results, when you see them, at the time of the Ukraine incident, you had seen the reduction in cost, but The profit is not bad, but it turned to be profitable from the next year. But this year, you want to make investment so that you want to create more profit next year. Is that the reason for this year? Yes, that is the positioning of this year. So the cost pressure, you want to make investment in the marketing. Yes, it was mentioned by Mr. Nakuma earlier. that the Middle East impact is not incorporated in here. Looking at the situation, we have to respond to it. Okay, well understood. The second question is a bit different question. The stock price of your company. functional materials and related to semiconductors, the stock price tends to, I think, fluctuate. I think this is a source of the stock price fluctuation. And for other businesses, including myself, what are the businesses that we can expect for the growth for the coming years that may impact the share stock price fluctuation? CDMO would be this year. And, of course, seasonings and food, especially sauce and seasonings, you can increase the profitability next year. Of course, what is the driver for the growth for your corporate value? Thank you. I think food is a stable source of business for us. We want to take advantage of that opportunity. We want to grow the existing products, and as was mentioned earlier by myself, we want to launch new products. We want to grow into new markets so that continuously and stably we can increase and grow the food-related business. For bio and fine chemicals... Functional materials is growing very much, and because of the AI boom recently, yes, corporate value is being pulled up. This is the driver. So biopharma services and ingredients for the pharmaceuticals, it will take time, but for the gene therapy, progeria-like technology, we can utilize our technology into that. We are expecting its evolution and growth. And other than that, we have not talked about this agipuro for the feed, and that could be a very favorable thing for the environment. So if the world goes for an environmentally friendly situation, I think it will be another growth driver. So in each of the businesses, we create new businesses so that we can enhance the corporate value as a whole. Thank you very much indeed. Thank you.

Mr. Sumogi, thank you very much for the question. I'm sure that there are still many hands up, but given the time limited, we would like to take only two questions from here, two persons. This will be Morita-san from Nomura Securities. This is Morita from Nomura Securities. Thank you very much for appointing me. Now, I would like to have only one question. Regarding the seasoning foods business, I would like to ask your approach. You said that the Middle East impact is not factored in your forecast. Having said that, I think it's about time for you to take this into consideration and reflect them into your plans. So, based on that, I have several questions. Your value-added strategy and also you're going to expand the markets in the peripheral areas to your key markets. But given that the Middle East situation is happening. Do you see any need to change your mid- to long-term view, vision, like the consumer's income status is going to be deteriorating significantly? So do you think it is appropriate for you to continue on your strategy, or do you have to revise and change course to your plan? So the Middle East impact, Does that have any need for you to revisit your mid to long-term direction? Morita-san, thank you very much for the question. The Middle East impact, how and which area will be impacted most significantly? We are still keeping an eye on it. The biggest risk is the packaging materials, especially the special packaging materials. Immediately right now, we are not seeing any constraints regarding our shipments. We're not really seeing any changes from the customer's requirements, but the inflationary pressure is there. The consumers are becoming more price conscious, and I think they will be heading for more savings in the future. So in all the segments, we are going to release new products and launch new products. That remains unchanged. Sakakura-san, if you have anything to add as the head of the food business. Yes, thank you. The Middle East situation is not going to, if there's an impact on our midterm plan, there's nothing significant. We are not going to change our course significantly because of the Middle East situation, as Nakamura-san just mentioned. But we will keep an eye on the circumstances. If there's need to change, we will change it. and also the rolling forecast will reflect all these things in the future. So we will keep an eye on how this will unfold and change the strategy as necessary in a swift manner, if need be. But at the current moment, we don't foresee any significant changes to our direction. Just as a follow-up question, from January to March, currency rate, I think you have seen this growth in every region except for Brazil and Thailand. Can you just explain the reason behind this and what are the outlook for the future? Because I'm just curious if there's any consumption behavior changes being affected by the Middle East situation. If you can give us some color on that, that would be appreciated. Well, Thailand, in Thailand, this situation is not really directly related to the middle east situation um so so my answer is it's not related as for brazil we have implemented reinforcement measures so we are expecting sales growth in the future from brazil so my answer is that because of the middle east situation the third fourth quarter uh sales was not really affected. So we don't have to worry about the construction in the first quarter, January to March. No, because we have not seen any significant impact hitherto. Okay, got it. Thank you very much.

Thank you very much, Morita-san. Next is the last question. Fujiwara-san from JP Morgan, please. This is Fujiwara from JP Morgan. Thank you. Thank you. This is the last question and the one question. In business portfolio, including the seasonings and foods and health care, they are strongly improving and growing, but frozen foods, you mentioned that you're going to improve the ROIC for frozen food, but by 2030, 3% plus from the current level. Are you heading for 8% ROIC? Well, I think the share stock, share price has been evaluated high, I think, for your company. So 8%, is it all right? So in the mid and long term for this business, ROIC, for the business profit margin and ROIC. What is the potential? How far can you go? Can you explain about this? Fujiwara-san, thank you very much for the question. As for the frozen food, as I have explained earlier, through M&A, we have been expanding the business. That was the history. So we have goodwill. And In manufacturing frozen foods, we need to have fixed assets, so we will have to spend for the cost. So it is very difficult to increase ROIC. That is a business area. So out of other businesses, ROIC is rather low. But we want to... work spread of 3%, and we want to make it into 5% level. And we're not going to be satisfied with 3%. We want to do our best effort to improve that more. ROIC is not the only thing we can explain. This will enhance our brand awareness as well. This is a touchpoint with our customers, and it will be a contribution to their well-being. So we want to have these other factors also be involved and understand by you. So the significance of this business, I understand that, yes. But looking financially, I think this ROIC may be more than 80%. We have to demand this to this business, or else this business is unlike Ajinomoto style. So I think I would like you to do your best for this business. Yes, we want to differentiate, and as was mentioned earlier, we want to do the three directions that I have explained, and we'll do our best. Thank you very much indeed. Thank you. Thank you very much.

Since we ran out of time, we would like to finish the Q&A session at this juncture. Finally, Mr. Nakamura will say a few words of greetings to conclude the session. Thank you, everyone, for staying with us for very long hours of one and a half hours. FY25, we achieved a new record. In FY26, we would also like to set a new record towards this challenging goal. We will stay united and join the forces of the entire company so that we can aim for the growth of the enterprise value of the longer term, and we look forward to your continued support and patronage. Thank you very much once again for today. With this, we would like to finish the briefing for the financial results presentation for fiscal 2025. Thank you very much indeed for your participation. This is it for today. Thank you.