Nissan Motor Ltd S/Adr

Good evening, everyone. I'm Lavanya Vagankar, Corporate Executive for Global Communications Office. Welcome to Nissan's first half financial results for fiscal year 2025. Along with financial year results today, we will be presenting an update on re-Nissan. Today's session is for 45 minutes and is held on-site as well as online. First, let me start with the introduction of the speakers today. Ivan Espinoza, Chief Executive Officer. Jeremy Papin, Chief Financial Officer. We will begin with the presentation, so I'll hand over to Ivan.

Thank you, Lavanya. Thank you. Hello, everyone. Thank you all for your continued support. It was a pleasure to meet and host many of you at the Japan Mobility Show. Before we begin, I want to emphasize that Renison is on track, and I am grateful to all who have shown patience and trust during these decisive actions. Despite ongoing challenges and volatility, we remain focused on recovery. Today, Jeremy will present our first half performance, second quarter results, and full year outlook. I will then update you on the remiss and progress before the Q&A. So, Jeremy, please. Thanks, Ivan.

Building on the disciplined approach, our cost control measures are showing encouraging signs amid a challenging environment. Now, let's take a closer look at our retail sales results. Total unit sales reached about 1.5 million in the first half, down by 7.3% year-on-year. Second quarter sales, excluding China, were down by 3.6%, an improvement over the first quarter. We are already seeing clear acceleration in Q2, with North America delivering stronger results and China posting year-on-year growth since the month of June for the first time in 15 months. North America saw acceleration with 2% growth overall and 6.7% in Q2. U.S. sales were flat, Mexico up 8%, maintaining market share leadership. China sales declined by 17.6% in H1, but have grown year-on-year for five months, led by M7 demand. Japan dropped by 16.5% in H1, but our showroom traffic has been recovering from a low point reached in July, thanks to marketing and dealer program initiatives. Europe and other markets had temporary declines from model year changeovers and increased competition. First half consolidated net revenue was about 5.6 trillion, with an operating loss of 28 billion, better than we had expected. Net loss was $222 billion, largely due to lower equity method income, impairments of assets, and restructuring costs. The automobile business revenue was about $4.9 trillion, driven by foreign exchange effects and lower wholesale volumes impacted mainly by tariffs. r d spending was controlled at 275 billion through disciplined resource allocation some project deferrals thanks to a shortened development schedule and optimized hourly engineering costs our operating loss widened to minus 177 billion automotive free cash flow was negative 593 billion in H1, but Q2 performed better than expected at negative 202 billion. At the end of the period, net cash stood close to one trillion yen. Importantly, we maintained solid liquidity at 2.2 trillion in automotive cash and equivalents, and unused committed credit lines at 2.3 trillion. This slide shows the year-on-year operating profit variance factors. Foreign exchange had a negative impact of about 65 billion, driven by weaker U.S. and Canadian dollars, as well as the Argentinian peso and Turkish lira. Raw material costs were slightly positive at 3 billion, while tariff had a negative impact of 150 billion. Sales performance contributed 24 billion, but negative volume was offset by a favorable mix. Together, volume and mix delivered $62 billion improvement. However, competitive pressures continued to weigh on incentives. Monozukuri improved by $67 billion as the Reni-San recovery plan delivered cost savings alongside lower R&D spend and purchasing efficiencies. Inflation absorbed $50 billion moderating the overall benefits. One-time items added $65 billion, mainly due to lower warranty costs recognized in Q1 and reduced U.S. emission expenses recognized in Q2. Other items, including sales finance and remarketing expenses, added $45 billion. We achieved a positive impact on G&A costs through Renissan initiatives. Taken together, these factors resulted in an operating loss of $28 billion for the first half. I will now move to the outlook for the remainder of the fiscal year. For the second half, we anticipate a strong rebound in volume driven by new products and marketing initiatives. In China, demand for N7 is encouraging, and sales are expected to exceed previous outlook by 13%. North America is expected to sustain momentum, and we will intensify our efforts in Japan, Europe, and other markets. Although the first six months showed a year-on-year decline, we are confident the next half will deliver growth. The markets remain challenging, but the industry volumes are stable. Our full-year sales forecast remains unchanged at about 3.25 million units, representing a 2.9% decline year-on-year. We are adjusting our outlook to reflect the positive developments ongoing in China, but we are reducing our consolidated retail sales to account for the lower performance of the first half. The production is projected to remain around 3 million units as we maintain the very disciplined inventory management and actively manage supply risk. Recent launches and model enhancements will strengthen the lineup and attract customers in H2. Operational improvements, including a third shift at Nissan Shatai Kyushu, will boost output. Net revenue is expected to be about $11.7 trillion for the current fiscal year. As outlined in our revised outlook last month, we anticipate a full-year operating loss of about $275 billion, break-even before the impact of tariffs. Our operating profit outlook includes 25 billion for assumed supply risk, which we will revisit as the situation evolves. We are still evaluating the impact of ReniSan initiatives, and we are not providing a net income outlook today. The forecast is based on an exchange rate assumption of 146 yen per dollar. Let me outline the factors behind our operating profit forecast. Compared to last year's $70 billion operating profit, we expect significant headwinds from tariffs and currency. On the positive side, we anticipate benefits from an improved product mix and continued support for our U.S.-built models. Year-on-year, we expect cost improvements as Renison initiatives take hold even amid inflationary pressures. Tariff-related car flow adjustment will add cost in the second half, limiting manufacturing efficiency gains. But we are expecting savings in logistics, R&D, and purchasing. One-time positives include lower warranty provisions and reduced emission penalties. Overall, we forecast an operating loss of $275 billion for the year. We remain disciplined in our balance sheet management, and we are retaining sufficient liquidity. Total liquidity is about 3.6 trillion, with 2.2 trillion in cash and 2.3 trillion in unused credit lines. Year-end automotive debt is forecast at about 2.1 trillion, fully in line with our initial plans, And this is following the successful refinancing of $700 billion in debt maturities this year. Let me now hand over to Ivan.

Thank you, Jeremy. I will briefly recap H1 performance and the outlook. First, on sales performance, despite volatility and competition, we stayed resilient. Q2 declines narrowed, signaling stability. North America showed strong Q2 growth. Retail non-EV share has risen for three straight quarters and continued in October. China turned positive since June, while Japan and Europe experienced some softness, but we expect recovery with upcoming launches and dealer programs. Second, on financial performance, we possess $3.6 trillion of total liquidity, Over 80 billion yen in fixed cost savings were achieved in H1 through re-Nissan recovery initiatives. While tariffs and currency headwinds pressure profitability, disciplined cost management and structural efficiencies continue to deliver benefits. Finally, the outlook. We anticipate a stronger second half driven by re-Nissan product-led growth and momentum from Q2. We remain on track for operating profit break-even, excluding the tariff impact. We target $1 trillion net cash at year-end and expect positive auto-free cash flow in H2. We will balance optimism with prudent risk management as we navigate challenges. In short, we are prepared for second-half growth, leveraging new launches, operational improvements, and disciplined execution. Building on this momentum, let's turn to the strategic update. While navigating a challenging environment, Nissan is advancing steadily through re-Nissan, redefining our strategy, accelerating innovation, and reinforcing the foundations for sustainable growth. We have been driving a transformation that goes beyond tackling current challenges to redefining our future. It rests on three powerful drivers. First, discipline cost reductions to strengthen our financial base. Second, a bold redefinition of markets and products to deliver what customers truly want. And third, reinforcing partnerships that unlock scale and efficiency. And with clear target, returning to positive automotive operating profit and free cash flow by fiscal year 2026, excluding tariffs. And we know what it takes to get there. That's why we're targeting 500 billion yen in savings, split between variable and fixed costs, to reshape our cost structure and strengthen our competitiveness. Let me take you through how we are tracking against these targets. Over the course of this year, our variable cost reduction initiatives have gained notable momentum. As of November 2025, we have generated 4,500 ideas, identifying a potential impact of 200 billion yen, a progressive leap from 75 billion in May and 150 billion in July. Over two-thirds of these ideas are technical solutions, like redesigning headlamps for efficiency or optimizing seat designs to cut material costs. Major cost reductions target high-volume models like Rogue, Kicks globally, Pathfinder in North America, and Serena in Japan. Every action upholds our commitment to quality, with no compromise on safety, reliability, or performance. We are advancing in manufacturing and logistics, including parts diversity reduction and supplier collaboration. Encouragingly, ideas are maturing with more moving from concept to implementation. This structured approach ensures credible, sustainable savings embedded in design and operations, always with quality as a top priority. We have delivered over $80 billion in fixed-cost savings in H1, a strong start. We aim to exceed $150 billion by fiscal year end and surpass $250 billion by fiscal year 2026. In manufacturing, we have completed six of seven targeted site actions with Compass, the sixth plant, ending production later this month. On engineering, we are progressing towards our 20% cost per hour reduction target, currently running at 12%. Parts complexity reduction is delivering also strong results, complemented by Obeya activities, with models like the Next Generation Rogue using 60% fewer parts. We are also optimizing assets to unlock value for transformation. A key step is our global headquarters in Yokohama. We will proceed with a sale and leaseback transaction under a 20-year agreement. This ensures Nissan's continued presence and commitment to Yokohama while ensuring no impact on employees or operations. Part of the proceeds will fund critical investments like accelerating AI-driven systems, digital modernization, and transformation initiatives while preserving our ability to invest in innovation and growth. These steps go beyond cost. They create a leaner, more agile Nissan ready to compete and win. We have made strong progress on cost actions, and now the momentum is shifting towards the next two drivers of re-Nissan, redefining our product market strategy and reinforcing partnerships. On product lineup, our product lineup tells the story. From the award-winning Leaf to the new generation Rook skate car, we are gaining traction. Between now and fiscal year 2027, we will be introducing nine new models. As we look ahead, our product strategy rests on three pillars. Heartbeat models, icons that showcase Nissan's DNA and innovation, like the globally recognized LEAF. Core models, vehicles that lead in key markets, such as the Qashqai e-Power with class-leading fuel economy, and the Kicks, recently named Best Buy 2025 in Brazil. Partnership models are collaborations that strengthen our reach, including the N7 with 40,000 units sold in China, and the Rooks K-Car with 15,000 pre-sales in just six weeks. Finally, I want to stress the importance of partnerships for our future. Many of our products, as I mentioned earlier, reflect the strong power of collaboration. Now, coming to partnerships in technology, these are critical to strengthening our presence in next-generation mobility. In recent months, we have announced several initiatives. a tie-up with Boldly, Premier Aid, and KQ Corporation to pilot autonomous mobility services here in Yokohama. Collaboration with Wave, the UK pioneer of AI driver software, to set new standards for driver assistance in our next-generation pro-pilot technology. And in China, our new Tiana features advanced intelligent connectivity, becoming the first ICE vehicle equipped with Huawei's Harmony Space 5.0 smart cockpit. These partnerships are more than projects. They are strategic moves that position Nissan at the forefront of intelligent mobility. In conclusion, our first half results reflect the challenges we face but they also confirm that Nissan is firmly on the path to recovery. We have made meaningful progress, and while there is more to do, the foundation for future success is in place. Having implemented decisive cost saving measures to secure profitability, we are now accelerating forward, prioritizing new products, key markets, and breakthrough technologies that will define our next chapter. The second half will bring challenges, but with focus, discipline, and the actions we are taking, I am confident we will deliver strong results. We have the right strategy, the right products, and the right team to capture growth and create value. Together, we will navigate the road ahead and with confidence seize the opportunities and lead with innovation. Thank you for your attention. With that, we will now take your questions.

Thank you, Ivan. We will now open for questions. If you have a question, please raise your hand, and the team will come to you with the mic. Give me a second. I already see a lot of hands going up. Just keep the questions to two per person so that we manage time. So we go with maybe the first front row, middle, with the gentleman.

Best car. My name is Terasaki. Thank you for this opportunity. I have two questions. The first question is as follows. Last week, Japan Mobility Show started. And here, you have a stand. New Elgrand and new Patrol were displayed in the show. Espinosa-san, you made the presentation personally. That's what I heard. what's the reaction of the people who saw it and what's your opinion but the overall show this is my first question to ivan san and the second one partnership was it since last fiscal term with honda you have been well capital tie up is kind of went back to spread

scratch but you are trying to continue with the collaboration Honda what is the progress so far to the extent that you can disclose these are the two questions thank you okay so thank you thank you for your questions on the Japan mobility show first of all thank you for visiting I really enjoyed the show and having the opportunity to guide many of you through the booths and show you what Nissan is capable of doing then as for the reaction the reaction has been extremely positive both for L-Grand and for patrol. The level of buzz that we are seeing, and I have some numbers for you, actually, the conversations on social networks spiked by 15 times versus the normal average that we have. And out of that, we have 35% positive sentiment in total, which is a 25% increase versus where we were before. So clearly, the products are well-received, and Nissan is starting to become attractive to customers again. which was exactly the goal. It's exactly the goal of the second phase of our re-Nissan program. As I've mentioned before, the first step was about cost and restructuring. Now we are shifting gears into the second phase, which has to do with product, market strategy updates, innovation, and technology. As for the partnership with Honda, well, we keep discussing with them, as I have said before, on several projects. There's nothing that we can disclose at the moment. But we keep discussing with them opportunities in several fields as we outlined in previous announcements. Thank you. Thank you for the question.

Thank you. Take the question from the right side.

Yes, thank you. My name is Hata. There are two questions from me. The first one is the regional breakdown of the sales. China and U.S. are better, but how about Japan and Europe? There's a decline which is continuing in Europe and Japan. Sunderland and Tochigi, what is the utilization rate so far? And Leaf and Micra, you are going to introduce new cars. You are talking about the second stage of re-Nissan. Europe and Japan, when will it grow? When will the volume in these two regions grow? This is my first question. And the second one is the objectives of the re-Nissan project. In May, when you devise a plan, in fiscal year 2026, automotive profit and free cash flow will be the positive. That's what you said. But you said that you didn't talk about excluding tariffs, but now you are saying it's excluding tariffs. Does that mean that you made a downward revision on the goal for 2026?

So let me start with the first question. So the volume, as we explained earlier, in Europe and Japan was soft on the first half. Europe had some impact from the model changeover. So we were on the run out of the previous Qashqai and entering with a new Qashqai that has a third generation e-power. So we expect Europe to pick up in the second half now that we are launching full blast the third generation in power, which has been very positively received and evaluated by media. In Japan, we had a slow first half for several reasons. One, of course, the impact of media and communications and negative media coverage that we had in the first half. because of the situation that we went through. This had an impact on showroom traffic, and customers were weary of Nissan's situations because of the financial condition. Now, we are seeing change. We see, as I mentioned before, sentiment from the public is changing towards us. They are understanding that Nissan is a great company that makes great cars, and we start to see the positive sentiment changing. A lot of this thanks to your support as well as media because you have been providing a lot of support to us. And we see that the sentiment is changing. The short-run traffic starts to improve. And the proof of that is also the very strong reception to Rooks, around 15,000 orders received in only six weeks. So this signals that we can start bouncing back, and we expect a strong bounce back in Japan as well in the second half. As for the objectives, the objectives have not changed. The fact that we are now clarifying tariffs is because we didn't know when we announced at the beginning for how long tariffs will be remaining. We thought initially, as many in the industry, that it was a temporary thing. But now that this is here to stay, we are just recognizing that the tariffs will have to be managed. And this is not a downward revision. It's just a clarification of what we expect for next year. Thank you for the question.

Yeah, on FY26 guidance, there is absolutely no change, fully in line with what we had announced in the month of May.

Thank you. If I go to the last left side, first row.

Thank you.

Thank you for the presentation, Yomiuri Newspaper. My name is Sakamura. I also have two questions. First of all, Rimi-san. So far, 20,000 people headcount reduction was talked about. In which country will you be reducing headcount? In what degree? Can you substantiate that plan and give us an update on the substance of that plan? Second question, new model introduction. In China, N7 is doing very well. So, in the future, China produced cause exporting to other countries. I thought that you were studying such possibility. How far has that study gone, and is there a possibility for export to Japan? Thank you.

Thank you. Thank you for the question. So on headcount, on your headcount question, what I can tell you, we're not providing a breakdown. What I can tell you is these numbers that we announced are global and we are tracking according to our plan. So the plan is ongoing and we are tracking according with our expectations in terms of speed and size of adjustment of the workforce. But we are not providing details on the breakdown. As for the new model, N7 and future exports, the answer is yes. We are working on an export plan. You maybe heard we established already an export JV company that will help us enable and facilitate and speed up this. And we are looking at several products that we have a potential, and we are looking at different market options, but nothing specific to share today. But the answer is yes, we will be exporting cars because this is part of our strategy to defend ourselves outside of China, bring more scale to our China operations also, and use the speed of China in terms of development, technology, and costs to defend ourselves in markets where Chinese OEMs are being aggressive. So this is what we are set to do. Thank you for the questions.

Thank you. If I move to the second row in the middle. Yes, please.

Tokyo Channel 7, the question to C.U.S. So, in relation to the previous question, you have commitment of achieving operating profit in the automotive business by fiscal year 2026. However, Net income forecast has not been disclosed with a massive loss in fiscal year 2025. Can this target be met? Can it be achievable in time? I think that Mr. Papa has already answered that question partly, but I need an answer from Mr. Espinosa and a strong message in your commitment. And the second question is very simple. So you emphasize the change of an atmosphere around Nissan. Does it mean the darkest hours of Nissan is over or still to come? The darkest time of Nissan is over or not? Thank you.

Thank you. So for me, the important thing is to have customers looking at Nissan with eyes that represent what Nissan is capable of doing. And Nissan is a company that has over 100,000 employees working very hard to create great products. And that's proof of what we saw in the Japan Mobility Show. It's evidence and proof that this company, our company, is a great company that can deliver great, exciting products. This is what we're focusing on, and this is what our people, with a lot of love for our company, are doing every day. As for your question on OP, The answer is yes. We are committed to deliver what we said. And proof of that are the numbers that we just explained to you. I think we have a couple good examples. As we said, on the fixed side, we have achieved already more than 80 billion yen in the first half of savings. We are on good track to achieve 150 billion yen by the end of this year. And we are confident that we can overachieve 250 billion yen next year that we have committed to achieve. And on the variable cost side, as mentioned, the progress is very consistent, gradually growing the impact or potential that we see, now reaching 200 billion yen versus the 75 billion yen that we had in May and the 150 billion yen that we had in July. So, again, this is evidence that the company efforts is bringing fruits. So this gives us confidence to achieve the objectives that we have set for ourselves next year. Thank you for the question.

The darkest hour is over.

Well, I don't know what you mean by the darkest hour. Again, for me, the important thing is to change the customers' minds and have them look at Nissan as a great company that it is. Thank you.

Thank you very much. We stay in the middle.

I have two questions. First, Expedia semiconductor manufacturer impact. Obama Kyushu reduction has become clarified, but how much impact are you foreseeing in terms of volume? What's the maximum reduction? And are you thinking of alternative purchasing? So what's the progress in terms of choosing an alternative? Secondly, how do we interpret volume? N7 was better than expected. So there was a hit, but... The full year volume is unchanged and minus from 2024, and sales has been revised downward. So top management, how confident are you on the second half? And you will continue to introduce new models next year, but do you think that that will really have a positive impact? What's your level of confidence?

Thank you. So I will answer the second question and then let Jeremy elaborate on the first one. On the confidence on the H2, I think there's two elements to consider. Not only the new car launches, But the fact that in North America, as well as in China, from the second quarter, we already start seeing growth. So we have seen consistent growth in North America, in the U.S. particularly. I can tell you our retail share in non-EV has quarter over quarter grown. If you look at the numbers, Q3 2024, we trailed at 4.3%. uh q4 2024 we were at 4.8 and now we're running at 5.3 so this is a proof that the the performance is improving thanks to the focus that we have put in our marketing and sales activities and the products that we are rolling out in the U.S. Then Japan, as mentioned, we had a slow H1, so that's why we believe we will not be able of recovering the full year estimate, but we expect a strong bounce back in the H2. Thanks, as we said, from the good showroom traffic improvement that we see, the positive sentiment from the consumers that they're placing, again, their confidence in our brand and our company. And, again, proof of that is the very good reception and the pre-orders of the all-new Nissan Brooks. So that's why we are confident on the second half performance on sales. Jeremy, you want to elaborate on the first one?

Yeah, on the supply risk that we are managing at the moment, there are actually two. One is an aluminum supply issue in North America that is affecting many market participants following the fire at a supplier. The second one is obviously the situation with Nexperia. and the chips that were being banned from export from China, but that ban in the last few days seems to have been lifted. So I would say the situation is extremely fluid, and we are, I would say, managing it extremely closely. This forecast, as I shared with you, includes a 25 billion yen risk. which we put as a placeholder last week when the situation was quite uncertain. I would say as the situation clarifies, should this placeholder be unnecessary, we will be removing it from the forecast.

Thank you. Next question. Thank you.

TV Asahi, my name is Matsuoka. Thank you for the opportunity. I have two questions. For this fiscal term, in the first half, how do you assess the first half results of this year and the sales and leaseback of GHQ? Without renting it, how about going to the suburbs where you have an R&D center? It would have been more beneficial. What was the thinking behind this? Wasn't there any opposition from other executives in the company? Thank you. These are the two.

Thank you. Thank you for the question. So on the first half assessment, as mentioned, we had a result that came in better than we expected, but it was supported by external factors as well. So we had some one-time events that are evident that we are doing well, but there's more work to do. So that's what we qualified earlier in the presentation. So the plan is on track, but we have to keep working hard in the second half to deliver the objectives that we have set for ourselves. Now, as for the cell and these back, We discussed at length in the EC, and it's something that also we reported to the board, and the best option was to do what we did, the decision that we made, which is trying to minimize the impact on the employees and on the suppliers and on the local economy, and having a good business strategy to utilize better our assets, bring some resources in that will help us modernize and go further into digitization, AI implementation, and many other things that we have to do, while also it allows us to spend the precious R&D resources that we need for our future, especially in a year where free cash flow will be negative. So these are the considerations that we took for the decision that we made. Thank you. Thank you for the question, Matsuoka-san.

Thank you. Move to the left side, yes, please. Thank you.

Hiya, Inamijima from Bloomberg. Thank you for the opportunity. Last time during the press conference, Bapan-san, you said that net loss for this fiscal year, you said the details will be provided in November, if I remember correctly. But this time, you are not going to give a full guidance for net income. Once again, why are you in this situation? Was there any huge... change that took place from last time? Is there something that you didn't see last time to the degree that you can disclose? Could you elaborate why you cannot give a fuller guidance of the net income? And page 16, global design studio is reorganized and global information system center is relocated. That's what it says. Did you sell assets in these moves? Could you elaborate on these two points? Thank you.

So on the net loss outlook, I think the situation is the following. We are at the moment considering further implementation of restructuring actions under ReNiSan, in particular, accelerating decisions and as we are working on those options we just didn't have a clear enough forecast to share something that was robust enough in order to make a communication so we we want the transparency and we want to provide the guidance but today was just not the day where we could And so I think you just need to bear with us and understand that we're working on assessing further restructuring and implementation of Renissan plans in fiscal year 25, and that will have P&L consequences that we are assessing. On – more generally on the events that you mentioned, I would say that when we free up any assets today, there is a consideration of monetizing the asset if we own it. And so there is just a systematic review. So we will – keep you informed as we progress with asset sales or any asset disposal.

Thank you. The gentleman in the middle, please.

Hata Naka of Nippon Broadcasting. Thank you very much. I have a question to Mr. Espinoza. During the mobility sale, Your group company, Nissan Shatai Shonan Plant announcement was released. You will be using it to manufacture service components. What's your take? And was Nissan involved in that decision-making? And Mobility Show was very popular. The main L Grand and Patrol... Nissan Kyushu manufactures those models. So these models will continue to be manufactured in the same way, or will the manufacturing site be transferred?

Thank you. As for the Nissan Shetai question on Shonan, I will kindly ask you to ask the question to Shonan. We cannot comment on Nissan Shetai. However, on your question on L-Grand, We will be continuously assessing the industrial strategy, so for the moment we will start producing in Nissan Shutai Kyushu, together with caravan and frame vehicles. As you have seen, the welcoming of patrol and QX80 is very good globally, so we are currently looking at what options we can have to further increase the capacity of such models, because they are performing very well and they are very profitable. Now, this, as I said, we will continue to explore, but for the moment, there is no intention to move the products out from Nissan Chattahoochee. Thank you for the question.

We have time for two or three questions, so next question, please. Yes.

TV Kanagawa, my name is Togashi. Espinosa-san, this is a question for you. Nissan Stadium naming rights is a question. Yesterday, Yokohama Mayor Yamanaka, as of the end of last month, he said that he received a new proposal. Could you elaborate on the proposal that you made to the degree that you can disclose? But once... They renewed the contract at 15 million yen in response to your proposal, but once again, there was an instruction to review the proposal. What's your approach or thinking behind this?

So, first of all, we are committed to Yokohama. This is our home base, our hometown. And we're going to stay here. This is why we also announced that we will continue to be the largest shareholder in the Yokohama Marinos because it's an icon of our company and a symbol of pride for many of our employees. With that in mind, we've been discussing with Yamanaka-san and the city of Yokohama because we want to continue our collaboration in the Nissan Stadium for the same reason. Now, we made an offer, as you said. We are discussing now with Yamanaka-san and the team and the city, and we will update you when this is concluded. So we will continue discussing with them based on this offer that we provided. But no detail to be shared today. Thank you.

Thank you. Next. Come to the middle, please.

TV Tokyo, my name is Abe. Nissan GHQ will be sold, you said. In reality, you are going to rent it, and there will be a rent which will be booked. For 20 years, what is the annual rent that you have agreed on? This is my first question. Please.

So, yeah, we have agreed to do a sell and lease back, as I said, and there will be a rent. But we are not going to disclose the level of rent. I just tell you that is a good financial decision. It's a good business decision that will allow us to invest resources in our future. Thank you for the question.

I think we're right on time. Thank you very much once again for joining us. If you have any further questions, the communication team is available. Please reach to us. Have a good day.

Thank you.