LIXIL Corporation

We will now begin the LIXIL Corporation The first quarter for fiscal year 2026, ending in March 2027, financial results briefing. This information session is conducted via live internet streaming. Materials for this briefing are available on our website under information for shareholders and investors. Please refer to the materials. Let me introduce today's presenter, Kinya Seto, Director, Representative Executive Officer, President, and CEO. Thank you. Next, Mariko Fujita, Director, Senior Managing Executive Officer and CEO. Thank you. Next, Aya Kawai, Managing Executive Officer and Head of the IR Department. Thank you very much. I am Kobayashi from the IR department and I will be your moderator today. Thank you very much. Now, I will explain today's agenda. First, our CFO Fujita will give us an overview of our financial results. Following this, we will have a Q&A session. During the Q&A session, CEO Seto will also join to answer your questions. This briefing session will be ended at 2.45. 3.40. Now we'd like to ask Fujita-san to start explanation.

Hello, everyone. At the beginning of this meeting, I would like to express our condolences on the part of the company to the victims of the Kumamoto earthquake. We will work together with business partners and with our employees to support the reconstruction of the affected area. Let me begin with the earnings result. Today I would like to focus on the full-year focus mainly. First of all, the Q1 results will be introduced. Revenues increased and earnings declined. The LHD aluminum price increased and the renovation ratio has declined overall. That is the reason why we ended with lower earnings. Regarding aluminum price, please refer to the right-hand side. Next, I would like to talk about the forecast. After consideration, we have remained with no change in terms of full-year forecast. From the second quarter, cost impact will be full-fledged, and price divisions will gradually take effect from Q3 onwards. There is a lag in terms of the impact. Therefore, for the full-year forecast, We believe that original plan can be achieved overall. For Q1 and Q2, cost increase will occur and with less earnings. But in the second half, we believe that recovery can be achieved. And there's no change in terms of dividend forecast as well. Next, I'd like to talk about the impact of the recent situation in the Middle East and our countermeasures. First of all, in terms of manufacturing supply, cost inflation as well as supply concerns existed. However, the price provisions have been made, the cost reductions have been made, and hedging have been implemented in order to implement countermeasures. In terms of product lead times, in the recent past, there is no concern in terms of supply. and Delivery. Please look at the chart below. It is clear to see that against the plan at the beginning of the fiscal year, additional measures have been implemented in terms of profit provisions as well as cost measures. And therefore, in March 2027, we have maintained the forecast of 45 billion. Next, I would like to talk about the supply side impact. Petroleum-based materials, aluminum as well as copper, are subject to supply shortages leading to price increase, cost increase. However, with price revision, we will gradually implement measures in terms of price revisions in July and August and October. Depending on the type of business, timing will differ, but and revision will be made accordingly. For Q1, there was some supply concerns and therefore the new housings was prioritized and renovation rate came down and the subsidy details have been delayed which has had an impact on the renovation going forward. The cost increase of new housing is likely to become higher. Therefore, this will have an impact on new housing and we believe that this will require close monitoring going forward. At the risk of repeating myself, I'd like to emphasize that regarding cost increase for the fiscal year, price revision and other cost reduction will offset the impact for the new housing demand. We have to monitor this on a long-term basis. Next, let me talk about the highlight of Q1. Regarding revenues, we entered 379.2 billion yen, core earnings 1.7 billion yen. In terms of profit for the quarter, minus 3.5 billion yen. Here are the details. As you can see, in terms of SGA, there was an increase. This is mainly because of the foreign exchange impact.

This is the business results by segment. LWT in Japan, no international bosses, businesses' core earnings remain flat, and LHD, as I mentioned at the outset, due to the soaring raw material costs, CE declined. For living, due to foreign exchange impact and higher material costs, CE declined. Consolidated financial position here, the equity ratio which was about 35% last year and this year 33.8%. And factors for this, as you see at the bottom notes, this was due to the surplus funds utilized for the short-term investment. Therefore, net interest bearing debt increased of temporality. But in the next quarter, in the second quarter, this is expected to be improved. Next, cash flow status and cash balance. Because of the slight increase in working capital and also the short-term investment of the cash reserves, as I mentioned earlier, due to these, investing cash flow worsened for us one time. But similarly, this is expected to improve in the second quarter, and free cash flow recorded as negative. So this concludes my presentation on the financial results. Thank you very much. Fujita-san, thank you very much. Now we would like to open the floor for Q&A session. If you have a question, please press the raise hand button displayed at the bottom of this screen. The host will call on those who raise their hands utilizing this function in order. Please utilize Zoom's audio and camera functions to ask your questions directly via voice. In order to allow more people to ask questions, we ask that you limit your questions to two per person at one time. If you wish to ask further questions, please raise your hand again. And if you accidentally press the raise hand button, press the same button again. You will be able to cancel it. If you have any questions, please utilize the raise hand button.

The first question, Nomura Securities, Fukushima-san, please. When the confirmation screen comes on, please click the panelist button. Next to audio on and video can be turned on at your will. Please proceed. This is Fukushima of Nomura Securities. I have two questions. Regarding cost increase, I have a question. You said rationalization as well as price efficiency will be the measures that you will have implementing. Regarding these two points, please elaborate further. Regarding price increase, August for LW2 aluminum will be from October. This is being announced. Now, in terms of price increase by your company, how does it compare with your peers? Are there any differences? In terms of price revision timing, do you think that this could lead to changing the market share as occurred in the past? Do you compare against your peers in this regard? Please elaborate. Second is regarding rationalization. You have released recently nobody planned to be closed by the end of this fiscal year. Therefore, the impact is likely to be manifest from next fiscal year onward. Now my question is regarding the rationalization impact this year. What are included this fiscal year and beyond next fiscal year? What are you expecting in terms of amount, in terms of rationalization as well as the production structure that you will maintain? Now I will respond to the first part and the second part will be responded to by Kawai-san. Next, comparison against our peers in terms of the metal products. At the same timing, it is likely that they will have price divisions by the same margin for sash and exterior. There is no significant time lag amongst our people in the industry. Regarding housing, TOTO has not announced its price increase yet, but for other manufacturers, price revisions have already been announced. So we have to watch how TOTO is going to respond, and this may have an impact going forward. Regarding housing facilities, profit optimization is pursued. I don't think that competition is going to be preceding what is going to be conducted by REXIL. So overall, I think each manufacturer will pursue their own initiatives in terms of price efficiency to secure models. In terms of housing equipment, there is likely to be a time lag, but this is not because of competitive intention. but the preparedness of the companies as well as the prior price revisions will have an impact and overall each of the companies Impacted by the Middle East situation, they may have reduced orders. This will also have an impact as well. So intentions will differ from company to company. It is not competitive dynamics that is coming to play. But in terms of possibilities, TOTO has not made an announcement yet, so we don't really know for certain. Now, I would like to respond to the second question. My name is Aya Kawai. I would like to talk about the Nari plant. You mentioned that additional measures and as a part of rationalization, Nabari was mentioned. But regarding the Nabari plant closure is something that has been decided from the past. It is not being impacted by the Middle East situation. So I want to emphasize that point. Regarding the Nabari plant, closure was announced in June of this year. In terms of the actual timing, up until the March of next fiscal year is the timing of the closure that has been announced. Therefore, the impact will be brought about from the next fiscal year. Just because we close this plant, it isn't as if the impact is going to be very significant. I will not give actual numbers, but it is not a significant rationalization that is expected this fiscal year, nor is it expected for next fiscal year either. It's not just structural reform, but in terms of rationalization that is mentioned here, the logistics expense has to be reduced as well. This is a major theme that we are tackling, as you know very well, There are some changes in terms of logistic related laws. This is likely to be an important cost factor. So in terms of dealing with these legal changes, we have to proceed measures so that the effectiveness can be maximized. In other words, we will try to consolidate cargo as much as possible. and for the logistics customers will be consulted so that we can consolidate more and we will also try to integrate the timing of placing orders in a front-loaded manner as much as possible. Furthermore, this type of impact In various contexts, we will be changing the process by utilizing AI But even without reducing people, we can replace outsourced work by AI, whether it be accounting or business operations. On our part, we have been planning to do so. We want to front-load such efforts. Because there have been so much price increases, that is the reason why these measures will be essential for us. In terms of rationalization, I would like to also add the following. For what we are expecting to do in the future, we cannot announce what is not being disclosed. And that is the reason why further details cannot be divulged at this time. Thank you very much. That's very clear.

Fukushima-sama, go ahead.

Thank you very much for your questions, Fukushima-san. Next person to ask a question is from Goldman Sachs Securities, Okada-san. Please click yourself as a panelist when you see the change in the screen. Next, please turn on the audio and if you like, please turn on your video, please. Thank you very much. I have two questions. First question is for at the end of the first quarter, the full year forecast and against which the progress is 3.8%, which seems to be very low. Going forward, you will carry out the price revisions and rationalization efforts. You are going to achieve the full-year targets. But having said that, this progress rate at the end of the first quarter seems to be very low. So what do you think about the risk for not achieving this full-year target? And for us as investors, what do we need to monitor carefully going forward? The impact of cost increase, including petrochemical products and aluminum and fuels, including over 25 billion yen or in the high over 20 billion yen. And the copper used to be increasing in prices, but we believe that in total 30 billion yen is going to be The impact of a cost increase. On the other hand, at least from April through June, we had to address this situation without having any offsetting benefits. But regarding the increase of the petrochemical costs affecting the inventory as well as the timing of the price revision, so therefore, such timing will come from the June onward. During the first quarter, aluminum, part of the petrochemical, and the second quarter, petrochemical and aluminum products will give us the full impact. On the other hand, the price revisions in LI particularly in order to in principle responding to the increase in the corporates and then we will just respond to it starting from October for the living. and also regarding the housing equipment the petrochemicals have the impact but we are not able to ready to increase the prices starting from the second quarter considering this from the July through September there will be about 30 billion yen or so will be the impact of the price increases so that will be offset by the price revisions So in the third quarter and the fourth quarter, that means that we needed to overshoot what we are assuming now. So for this fiscal year, 45 billion yen core earnings slated for the full year and over 30 billion yen cost increase has to be covered and offset by the price reasons. Therefore, in the first half and the second half, having the big unbalanced situation is something that is not avoidable. So according to our calculation, what we are estimating to have a certain level of sales, if that is realized, this target of revenue itself is not very aggressive. So we believe that we can cover that. But what can be the changes from now on? Perhaps I assume there are two factors. One is inflation. Not only in Japan, but in other areas, inflation is progressing. The interest rates have kept unchanged, but going forward, the interest rate may be hiked and the mortgage will be increasing, and then that may dampen the intent of purchasing. Therefore, the market may be cooled down. And the second risk is about commodities. Particularly, aluminum prices may fluctuate, ups and downs, and in cases where there will be a sharp increase in aluminum prices, In the second quarter, aluminum prices will increase to 3,500, 3,600, but now currently the price is down to 3,200 yen. So commodity price risk is limited, but it's supposed that aluminum will fluctuate most. and aluminum and copper prices will fluctuate, but copper we have been able to address flexibly by increasing our prices. Aluminum, we have a little concern, however, considering the stabilization of the price of the aluminum so far, we think that we will be able to perform in line with our assumptions. Thank you very much. Second question. About LWT, international business, India, Middle East and Africa revenue 16% increase from a year earlier. On page 18, regarding the analysis of the operating profit ups and downs, minus 1 billion yen from a year earlier and a margin 16.5% a year earlier and down to 8.9%. So I can read the explanatory text in the earnings call materials, but if you can provide us more details, please do so. Well, the Middle and Near East area business is damaged quite significantly. Dubai and other Gulf countries and Saudi Arabia and Northern Africa or Africa as a whole. So these are four major regions split equally in this area, EMEA. And of course, in GCC country areas centering on Dubai, demand is down significantly. And for Saudi Arabia, the momentum has been lost. Why have we been able to maintain the business flat here? Because we have the local inventory and manufacturing. Therefore, we have been elected by customers, although the volume is down. But by increasing the shares, we are able to maintain the business level as a whole. Why profitability is suffering? In Gulf GCC, which port and which road and infrastructure are being utilized as available ones and we need to move around our inventory or goods to and from ports and once reaching the port and we had to wait for some time at the port There are unconventional quarters that have been occurred during the first quarter. So as a result of these, given the current level of revenue, we were not able to enjoy the expected level of profitability. On the contrary, with the share in the market increasing and once the infrastructure is recovered, we believe that we will be able to enjoy more the profitability improvement in the region as a positive note. In the negative notes, Long term, the one quarter of business there, Gulf, situation may deteriorate further. Having said that, Saudi Arabia, which has been growing, and India, as well as Africa, particularly northern part of Africa, grew significantly. Well, we are producing in Algeria locally. So in that sense, we have a strong point in the region. That means that we will utilize such strengths in the region to recover the weakening business in the Gulf GCC. And we have stayed strong sentiment about the Middle East. Thank you very much for your question, Okada-san.

We will proceed to the next question, SMPC and Niko Securities, Kaoshima-san. When the confirmation screen comes on, please click to participate as a panelist. Please set the audio on and video is at your will. This is Koshima of Nikko Securities. I also have two questions. First question is overseas LWT related. So there is an increase in revenues, but profit is flat. And depending on the regions, the factors may differ, but inflation cost increase, The explanation is given on page 11. It's quite prevalent. What about price revisions overseas? It is not catching up. By catching up, do you think it can be covered or is it going to be recovered with different factors? So revenue is increasing but the profit is not growing. Why is this the case and how do you intend to recover? The second question is regarding Japanese renovation market. You said that this is slow. Please elaborate on the mechanism why this is slow. Generally speaking, the housing market is subject to supply insecurity and therefore I think there have been prioritization placed on new housing. But can you have revenue increase? Did you encounter any advantage in renovation as well? But it seems that the birth is declining. So compared to the past, it seems that renovation is weaker. But in the first quarter, looking at the current situation of your peers, you could have enjoyed more advantages. Is it because renovation is not proceeding well? Is there any structural issues? Why is this the case? Now, regarding the overseas market, from April to June, the profitability declined. This was explained to Okada-san previously. In the Middle East, it is extreme case. But in Europe as well as in Asia, similar situation is occurring. Freight is... Increasing very significantly, we have to go through the Cape of Hope for delivery, which is leading to increasing costs. In terms of fuel, increase is also having an impact, and copper price increase is also having an impact as well. Now, regarding LI for overseas market, the price revision is around July. Before, from April to June, profitability-wise, it was a difficult timeframe for us. But in terms of July, September, there should be some recovery. But for the price revisions to take root for LIE, there is going to be bias toward the second half. LIE, MWE, and Living, and HT in these areas, I would say that the LIE is most balanced from first, second, to third quarter. But in responding to Kawashima-san's question, I would like to say that the price revision timing is July. That means that there is a deterioration in April to June timeframe. Now, to your second question, this is quite a complex issue that I would like to elaborate. It so happens that it is not an issue of housemakers. Also involved in renovation and also builders are involved in the renovation business. So it seems that prioritization is placed on new housing. And this situation is still continuing to a certain extent. There are some shortages. There is also a shortage of manpower as well. And against this backdrop, they have to build houses. That is the reason why new housings have been prioritized for April to June. So you might wonder why we cannot capture more business. But in terms of bathrooms as well as kitchens and toilets, we are receiving orders five times, six times the usual when other companies are unable to supply. But this was a challenge for us because against this backdrop, Other companies transfer orders. There could be some orders because of uncertainty for the future. And if we accept such orders, it could be canceled or it could be deferred in some cases, which means that We have responded 100% or 120% or 130%, but even we receive orders, irrational situation could beset us in the time from May and June as a result of this. For toilets, you know very well we can build inventory, more than 100% level we have been able to do that. But for bathrooms as well as kitchens, The distribution inventory cannot be built up. We have to take it to the actual site, which means that the order has been placed, and if we accept the orders, they will defer delivery or even cancel in certain cases. Therefore, ultimately, Orders which are plentiful have not been covered. Even though we have received many orders, we have not been able to deliver the same amount. This is an industry issue that was besetting us. But demand is not increasing when levelized. It is increasing orders because everyone was uncertain. And whether this is going to have an impact on the future demand, that is not necessarily the case. I think it will converge to the actual demand. For window renovation, there are special circumstances. This is the first year that the system has changed. And everything was decided as a new system in June. So there was delay in the months of April and May in terms of window renovation. So the visible numbers and what is occurring are in a disconnected situation.

Thank you.

Thank you very much for your questions, Kawashima-san. Please limit number of questions you ask at once to two per person. From CRSA Securities, Mochizuki-san, the floor is yours. Please click yourself as a panelist when you see the change of the screen. This is Mochizuki of CLSA speaking. Thank you very much. I have two questions. My first question is a simple one. For this fiscal year, aluminum and copper alloy prices, based upon the current assumptions, what is going to be the mean average purchase price for these? So that is my first question. In addition to that, there may have been requests for price increase from your suppliers. Of course, so what portion, how much of them is included in this forecast? Do you have a very tough forecast or not really or very weak forecast for that? Regarding aluminum prices, we have kept our forecast unchanged at the very last of this presentation, ¥3,600 at one time, but the price of aluminum has declined down to about ¥3,200. So that is the level of the price of aluminum we are using as assumption for the full year term targets. The copper alloy, LME, Thank you. Copper is not something that we are purchasing. Therefore, regarding more details, I would like to respond to you later separately. But what it used to be increasing as a price and based upon which we made our plan for the year, therefore, we do not believe that there will be significant impact on to the domestic business. And regarding international markets, what is increased in cost prices, that will be passed on to the selling prices. That is the basic policy. Therefore, we do not believe that there will be a significant impact on the entire corporate business wide. Honestly speaking, the prices are increasing, but aluminum, $3,600, and we thought that it could reach $4,000. That was the assumptions from the market. And in reality, what is happening is there is a shortage of supply of aluminum in Europe, but there is excess supply in Asia. Therefore, the price has been down to 3,200. So what will happen from now on? Well, Emirates has resumed its production of aluminum. And for aluminum, the places where bombs have been dropped and the resumption of the operation is quite early. Therefore, we do not think that the situation regarding aluminum will be uncontrollable. For aluminum, we are increasing our prices based upon the conservatives' take or view on the aluminum prices. Therefore, we will not have an uncontrollable situation. And copper, suppose that the situation of the war is Thank you very much. We do not think that these are going to constitute a great big factor for concern for us. As Okada-san asked a question earlier, the biggest concern is how the entire demand is going to change. What about the request for increase of suppliers' prices? That has been already done. Petrochemical suppliers' increase of price have been already settled, and aluminum and copper. These are based on the commodity price in the market. So once the market price is increased, we need to accept that increase for our purchase. Understood. Thank you very much. Regarding my second question in LWT, please tell us about the trend of revenue, Americas and Europe, because mortgage, Interest rates are staying at the high level and rather there is a higher risk of increasing mortgage rate. It's a macroeconomic situation. What about the business environment for you compared to three months ago? Do you think that there hasn't been any significant change or do you need to be more careful and conservative regarding Americas and Europe? Your take is? As a consensus, yes, the situation continues to be worse than expected for Americas, and there hasn't been no signs of a recovery in Americas. And in Europe, it depends on the country. Situation differs from a country to another. So in a nutshell, it's better than Americas. To some extent, it is stabilized, but not a great recovery as we expected. In Europe, There can be a great recovery as a catalyst that is being expected. For Europe, perhaps the biggest potential catalyst can be the change in the war situation in Ukraine. Understood. Thank you very much. That was helpful.

Thank you very much, Mochizuki-san, for your question. We'll proceed to the next question. Daiwa Securities, Teruoka-san. When the confirmation screen comes on, please click the panelist button and proceed. Teronka-san, please click on the Participationist Panelist button. Please turn the audio on. Sorry to keep you waiting. I'm sorry. I had some issues. Thank you very much for the explanation. I have two questions. In the explanation material, please refer to page two. Regarding price revision, let me see if I understand this. In terms of the LWT and NSG, 12% to 13% increase in price has been implemented. And domestic revenues is around 500 billion yen, 12 to 13% price increase with additional measures, 21 billion of price revision impact seems small overall. So on a net basis, how is this calculated? Please elaborate. Why don't you go ahead? Yes, let me explain this point and then ask Mr. Sato-san to weigh in as well. In terms of price revision, for this fiscal year as shown here, LST is from October and there is – it is as if from October there will be a vertical impact all of a sudden depending on So that's the reason why the price-efficient impact looks small, especially for LHT. Regarding LWT, and Living Kitchen, as well as Vanity, will be from August. So it is preceding October, but the impact will be manifest from second half and onward. Therefore, even with more than 10% price revision, the impact will be reflected in the numbers that are presented here. At any rate, we do have long-term contracts as well. And against this backdrop, LI is a vertical price increase similar to that. LST, LWT is more gradual in terms of the price revision being reflected according to history. But in terms of profitability for this year rather than this fiscal year, I think we can have higher expectations for the next fiscal year. Therefore, Teruoka-san, as you have already mentioned, the beneficial impact will be manifest increasingly next year. In terms of simple calculation, for domestic revenues around 1 trillion yen, that means that the 10% increase in price will have an impact of 100 billion yen. But in reality, this amount is not reached, I believe. How can I understand this to be the case? There are also reasons relating to negotiations, so I cannot elaborate in terms of details. But for all products, it is as if we can have a price increase of for all the products. That is not across the board. So that is how it should be understood. In the past, we said 10%, but it is as if a price increase of 10% is actually being achieved. It is all subject to negotiation. So I want to refrain from making further comments on this. But I'm just imagining that it should be more than 21 billion. With the full implementation on an annual basis, a significant number can be expected. But for this to run its course fully, we have to take into consideration long-term contracts as well. The contractual term must be taken into consideration as well. That is the reason why it's difficult to respond. Understood. Second question is regarding material price. No, let me try to understand this. In the beginning plan, you have mentioned 24.8 billion negative and increased by two times. And you said that this is going to further increase previously in the past three months. 49.2 billion, why is it increasing so much? Lumen price is coming down. Why is it double the level? So please give further details. And Seto-san, you mentioned that the constitution is more than 30 billion yen. And against that, how does it compare to 49.2 billion? How should I understand the relationship between the two? Minus 24.4 is domestic business, so hardly any copper is included, and 5 billion or so increase is regarding copper. So in terms of copper, it's difficult to segment in terms of timeframe, but with the increase in Inclusion of copper should exceed 30 billion. What I'm trying to say, cost increases, petroleum, fuel, aluminum, all together, that's 24 billion. And this is comparing the beginning of the fiscal year. In aluminum, at the time of April, there's no change. In June, $3,750 was reached compared to the beginning of the fiscal year. It isn't as if major improvements have been made, so it declined and then improved thereafter from the beginning of the fiscal year. In terms of the breakdown of numbers, I think Kawai-san can give you more details. But basically, this is petrochemical and aluminum as well as fuel, all inclusive in terms of countries. 24.4 billion for three months. Is that the additional 24.4 billion and 6 billion of copper together will add up to this number? This 36 million is a calculation that we have to make once again with Kawai-san. But this is going to be dealt with in the price revisions of July, August, and October. Do you think cost increase can be expected so suddenly at the time of April? Not everything was disclosed and it hadn't been realized. And had been realized from June, therefore from June to this 24 billion in terms of plus alpha. And at that time, we were expecting somehow 24 billion. We expected 20 billion or so. But how far we can realize price revision was not clarified yet. Therefore, ultimately, we evaluated the number, and based on that, we implemented price increase. It's not 24.4 billion increase in three months, but in the three months, measures have been formulated, and ultimately, we have increased the price. Understood. Thank you very much.

Teraoka-sama.

Teraoka-san, thank you very much for your question. Next question is from Morgan Stanley, MFU UFG Securities, Yagi-san. When you see the confirmation screen, please click yourself as a panelist. Please turn on your audio, and if you like, please turn on your video. Thank you very much for your presentation. My name is Yagi. I am from Morgan Stanley MUFG Securities. I have also two questions. My first question is related to Teraoka-san's question. As a follow-up, ¥49.2 billion that you disclosed on page 2, compared to the beginning of the year plan, the material prices, could you please break down by factors? Please give us the breakdown of ¥49.2 billion. And based upon that, once again, I'd like to ask you regarding the current price increase. It is reflecting what cost increase that was recorded at which point in time. And fuel and aluminum prices may increase further, and there may be some portions of the increase which cannot be covered by the price increase. with the vice versa when the cost is declining. Could you please give us your take on the material prices and also cost increase and price increase? We have data by material, but we don't have the data by business. Are we going to present those numbers separately? Well, Ms. Kawai, We have data by material type, so we will share with you those data. Roughly speaking, for LWTJ, cost increase mainly due to the petrochemical products increasing product price. LHT, aluminum is the main, and the sum is from petrochemical. LI, there is a little bit of petrochemical, but most of it is copper. So, explaining the price increases and materials by product, that is it. And other than that, there is an increase of the cost related to fuel and fuel efficiency. Of course, aluminum which consumes a lot of energy and for transportation cost to bring things to Japan. It depends on the region from where you are bringing products to Japan. So are we able to provide those numbers by types? I believe that there may be some data available. So what else did you ask? At which time point cost increase is reflected on your price revisions? Well, at which point in time? So back in May, we decided to increase our prices, and the range of our price increase was determined in May. But for LI, we considered even before that regarding price increase from May through June, considering the future projections, and we decided the range of price increase. So in that sense, there may be some overshooting and undershooting. But adding all these up, as a result, as regards to price revision, the copper-aluminum price increase continued since April and the petrochemical cost increase since June onwards. So for that, We are responding by increasing prices in July, August and October. So we have been able to address respectively to those increases in the cost. For aluminum and copper prices, vertically increasing suddenly and continues to be at the plateau. So that is about the prices. And petrochemical starting to increase in price from June and then it stays at the plateau now. regarding price revisions of us. In July, for international business, a July price increase was almost a sudden vertical ramp up, but it depends on the customers. Therefore, there is a gradual increase. And in August, LWT, Japan's price increase for all customers and for all types of products will be realized by the end of this The current year is December or January. And for LHT, we will start increasing prices from October and then we will be able to fully implement the price increase by the end of the current year. So the overall price increase benefits is gradually increasing in a triangular shape. As related to Teraoka-san's question earlier, as a result, the greatest benefits of price revision to secure operating profit to reach their appropriate or reasonable level is next April. Kawai-san? Regarding the cost increase breakdown, 24.8 billion yen as the beginning of the term plan. I believe we gave you the assumptions and regarding the additional numbers, I would like to supplement. Minus 24.4 billion yen, about 65% of it is for domestic Japan business, petrochemical materials, and other materials. Price increase account for 65% and 35% is due to aluminum price increase. Compared to the beginning of the term, these were included in our plan but they used to be 290 billion yen. So 35% includes the incremental portion and the remainder 10% is due to logistics and the fuel cost increase. So by segment, Through the individual interviews, we would like to respond to you, but for the entire domestic Japan business, that is the roughly split of the breakdown. Thank you very much. Understood. My second question is about Americas, operating profit situation in Americas. During the first quarter, red ink number is shrinking, but still you are making the losses during the first quarter. What is the background for this continuing losses? From the second quarter onward, you are going to reach the break-even point. If the demand continues to be slump, and do you think that there is a risk of us continuing a sluggish loss-making situation, or even with that, do you think that we'll be able to turn into the black ink, or you'll be able to hit the break-even point, even if such a sluggish demand continues? Could you please give us your view on the current status in Americas? Yes. How much? Decline in demand are we going to see in Americas for this year? Well, we are considering a price increase in Americas towards the latter half of this year. Starting from September onwards towards the peak season, we are going to see the recovery in the profitability. I said price increase, but rather than price increase, but with customers, Relatively profitable mix of products will be asked with customers, and that will be kicking in. So towards the end of this fiscal year, we will become more bullish. Well, in the past, we have continued to say that we are going to turn into the black ink, but we haven't been able to do so. So about 10% in total of our personnel has been reduced in headcounts. So currently, we believe that we have the lean operation which can allow us to reach the break-even point. So revenue was still weak during the first quarter. So while you were making loss, yes, that is true. And also mix shift is not completely done through. Starting from September onward, there will be a change in the mix of revenues, so that is the bigger factor. Of course, towards the Christmas season in America, there will be a peak in demand, so it really matters for us how much we are able to make money when it comes to the break-even point to be reached towards the end of the fiscal year. Thank you very much. Yagi-san, thank you very much for your questions.

We have responded to all the questions that have been posed so far. Thank you very much for the many questions we have received. Sorry about that. Please click the panelist button when the confirmation screen comes on. City Group Security, my name is Miki. I just have one question. Now, domestically, a major price increase has been implemented. Regarding price increase, did you have the surge in demand prior to the price increase in April to June or from July to September, do you think there's going to be a price increase? Because the price increase is very large, there should be a surge in demand before the price increase which will fall off after the price revision. Is that going to happen? Yes, there will be some. In terms of water-related other than toilets for the bathroom as well as the kitchen, in the distribution phase, they cannot build up inventory, but it does occur in July for toilets. So we could have a surge. and Backlash around the timeframe of August. But this is the type of business where you can have such a surge before the price increase. For exterior products, there could be some surge. But generally speaking, in terms of volume, Regardless of whether there is a surge before demand, a price increase, and before and after price increase, if you look at the two or three months, it turns out to be the same. So it's just that profit manifestation will be delayed. That is how this plan has been formulated. I would also like to have a follow-up question. The price increase is very large, and if other peers follow suit, the share should not change. But in terms of the housing demand as well as the renovation demand could decline, what is your outlook? What are your thoughts? In terms of inflation occurring, there is a possibility that demand could decline. We cannot negate that. But renovation is such that Compared to new housing, it is stable in terms of business. I don't think there's going to be a significant decline. That is not the case. But it is a possibility that we have to be concerned about. Thank you very much.

Thank you very much for your questions, Miki-san. Now, time is almost up, so this is going to be our last question from Mizuho Securities, Nakagawa-san. If you see the confirmation screen, please click yourself as the panelist. This is Nakagawa speaking from Mizuho Securities. I have a quick question. Domestic LWT, it's the renovation final demand. What is the current status during the first quarter for new housing, which has been prioritized? Therefore, there has been some reservation of the purchasing, postponing of purchase may have been seen, but showroom, room, visitors, traffic, and what is your view on the renovation market and many others. Overall, for everything, the renovation as well as new housing, the duration of the construction work is being extended. As a result, thinning out and demand and also the visitor traffic to our showroom have been weaker to what we saw last year. On the other hand, We are resolving the out-of-stock situation considering that how we are going to see the changes towards the end of the year. We need to closely monitor the change. Thank you. Understood.

Nakagawa-sama, thank you very much for your question. We have responded to all the questions that has been posed so far. Thank you very much for the many questions. And the time has come to bring this Q&A session to a close. If you have additional questions, please put forth your questions to the IR department. With this, we would like to conclude the earnings call for Elixir Corporation Q1 financial results for the fiscal year ending March 31st, 2027. Thank you very much for your participation today.