Roland Corp

This is Minowa from CFO. Thank you for taking the time out of your busy schedule today. First, I would like to explain the summary of the settlement from my side, and then I would like to explain the details from the red line of CFO. The results of the first half of the year were a landing on the estimated line of the company, including all expenses, increase and decrease, sales, and profits, except for the influence of the exchange rate. I was worried about the decline in demand due to the confusion of the tax policy, but so far, there has been almost no confusion in terms of demand, and I think that sales are doing well. On the other hand, We expect that the cost increase due to tariffs will be a negative factor for our profits in the future, but it is not a scale that will have a significant impact on our management itself, so please rest assured about that. However, of course, there is a certain amount of impact, so at the moment, we are working on price optimization, production control, and cost control, We are working to reduce the impact by expanding the share so that we can change this crisis into an opportunity. We expect that the effect will become more and more serious in the future. Based on the current situation, we have decided to pay 85 yen per piece as planned. In addition, there is no change in the current measures and expected effects regarding the continued business forecast, end-to-end response forecast. We believe that the timing of the third quarter's settlement can be corrected from the current continuous business forecast to the fixed business forecast. Now, I will explain the details from Akamata.

Hello, I am Hakamata from CFO. This is today's content. First, I will explain the summary of the second half-year calculation. This is the point of the 5-page calculation. The sales value is 45.8 billion yen plus 0.9% increase, which is roughly the estimated line in the company. In terms of operating profit, we have reached the target of 7.1% increase of 3.8 billion yen, except for the cost of the river. In addition, due to the cost increase due to the tax, the second half of the fiscal year, we had a shortfall. I will explain the details later. As you can see, the net profit is as follows. Next is page 6, PL. Due to the influence of the exchange rate, at first glance, the interest rate seems to be fluctuating or deteriorating, but the net interest rate is 44.4%, except for the exchange rate, and the operating interest rate is 10.1%, with a 0.6% improvement. Next, page 7, sales status for each product. In order to better understand the actual situation, please take a look at the total cost of the product. This is the total cost of the actual product, excluding the cost of production. We strongly recommend the video and audio related to the keyboard and instrument creation. On the other hand, the main category of Kanda instruments, electronic drums, has been in the lead, but the lack of acoustic drums has slightly lowered expectations. This is because the main factor is that the production has temporarily stopped due to the tax relief, and it is expected to catch up in the short term. In the same period of the previous year, guitar-related products of the main guitar amps were on sale, so there was an impact due to the recoil, but the demand itself is significant. Next, page 8 is for each region. As you can see, in the U.S., prices have been down from May as a measure against inflation. While monitoring the change in sell-through, we are looking for the optimal balance between quantity and price. In Europe, the competition between dealers is intensifying, and it is a slightly opaque situation in which multiple dealers are disbanding. In China, the decline tendency has continued in the previous quarter, but in the third quarter of the second quarter, it has recovered almost as much as the previous year, and the bottom line has been confirmed. In other regions, the growth continued steadily, mainly in the new countries. Next, page 9. This is an increase in sales profits. The sales volume was slightly increased, and the price-to-price change also contributed to the change in price and mix, making it a big plus. The return on investment has increased by about 400 million yen in the previous quarter, but it has been restricted from the initial plan in order to minimize the impact of inflation. As a result, the return on investment increase has been sufficiently covered by improving the interest rate, and the actual value is 5 billion yen in the previous quarter increase. Unfortunately, from here, the influence of the exchange rate is minus 900 million yen, and the influence of the cost zone due to inflation is minus 300 million yen, resulting in an impact of 3.8 billion yen. Topics are posted on the second page from here, so please check them later. Next, I would like to update on the impact of US inflation policy. Page 13. First of all, I would like to talk about our understanding of the tax policy. At the beginning, we thought that the only serious impact was the export from China to the United States, but at the moment, relatively large taxes have been paid to Eastern and Southeast Asian countries, so we believe that the impact will be in the second half. In such a situation, most companies cannot avoid price increases, so it is expected that it will be a very difficult business environment for companies that cannot make price increases. We are also producing mainly in Southeast Asia and Southeast Asian countries, so we cannot avoid the impact, but we recognize that we have achieved price increases through COVID-19 and that we have the brand power to allow price increases. By making use of this strength and minimizing the impact on profits, we believe that there is a chance for the share to expand and the fan to expand by steadily supplying products to the United States. As I mentioned at the beginning, we cannot avoid the impact of debt, but if we take measures, it will not have a serious impact on our influence, so I would like you to understand that as well. Next, on page 14, we will update the status of additional taxes that directly affect our company. On the right side, we have information such as the production value and its ratio for our U.S. products, as well as the additional tax rate for each production value. Approximately 15% to 30% additional tax will be applied. However, as shown in the graph on the left, the range affected by this tax rate is only the sales in the United States, so it is about 30% of the joint sales. Next is page 15. In order to respond to these taxes, we are focusing on four points of price optimization, share expansion, cost control, and production location change. In the United States, we have already implemented price optimization, and we will continue to do so in other regions as well. Regarding the expansion of shares, we are strengthening consultations to obtain shares from Chinese house brands and other joint companies with high supply uncertainty, and we are also confirming the exhibition expansion of our products in part. We have also started cost control immediately, and in the first half of the year, we made adjustments to the budget budget of 600 million yen. We are also planning to make continuous adjustments in the second half of this year. As for the production level, we are planning to reduce the risk of China, which is estimated to be the highest rate of inflation. Some of the important models are expected to start production in August and will be ready by the end of the year. Based on these, I would like to explain the current performance forecast. Page 17. In conclusion, we will maintain the performance forecast of the previous announcement. As stated in the table on the right, unfortunately, the additional tax rate will exceed the previous assumption as a whole, but the additional tax rate in China has dropped significantly at the moment, so it is expected to be affected to a certain extent. Therefore, we have decided that it is possible to land in the performance forecast range that was announced last time. We believe that the performance forecast can be held at a fixed value at the time of the third quarter of November. Page 18. This is for your reference, but it is an image of the increase in sales profits due to the additional tax. We have updated the change in the additional tax rate from the previous estimate and the expected effect of the trial, so please refer to it. The last page is page 19. I would like to talk about the disbursement. As Minowa explained at the beginning of the presentation, based on the fact that Kamihanki landed at the estimated line in the company, the weekly disbursement was expected to be 85 yen per square meter. In addition, as long as there are no financial concerns regarding the end-of-year payment, we will maintain 85 yen per person according to the basic plan. That's all from me.