Sekisui Chemical Co

This is Keita Kato. Thank you for taking time out of your busy schedule to join us today. On page 1, I would like to highlight the main points in the key message of today's presentation. First, I'd like to draw your attention to the table, the columns for FY23 results and FY24 plan. For FY23, we achieved a 14-billion-yen growth in sales and 2.7-billion-yen growth in OP. Although market conditions remained sluggish in general, including the domestic housing market, we were able to secure margins by improving and maintaining the sales price. Net sales and OP were almost in line with the January forecast, while ordinary profit and net profit both reached record highs. These exceeded the January forecast, mainly due to foreign exchange gains. ROE was 10.4%, indicating improved capital efficiency. Next, the business plan for FY24. Market conditions are expected to recover moderately. We'll continue to focus on expanding sales of high-performance products and maintaining margins whilst keeping the momentum for consolidated sales and OP growth by executing measures for augmenting profitability in the housing company. We'll strive to achieve a record high OP of 102 billion yen. Following our shareholder return policy and based on the net profit of 77.9 billion yen for FY23, we raised the year-end dividend by 3 yen from the January forecast to 39 yen per share for a total annual dividend of 74 yen per share. For FY24, we plan to raise the annual dividend by 1 yen to 75 yen per share, which would mark the 15th consecutive term of dividend hike. We have also set a share buyback program of up to 4 million shares and plan to retire 4 million shares. Page 2 illustrates the progress of the midterm plan. First, I'd like to touch upon the progress of our investment plan, which totaled 66 billion yen in FY23 on approved basis. Although some deals were carried over to FY24 and beyond due to the sluggish market, we see more growth investment opportunities, such as capacity expansion in the HPP company, UIEP, and medical business. We continue to search for M&A opportunities focusing on growth areas. Regarding strategic innovation at the bottom left, we are accelerating development of perovskite solar cells, which have been increasingly covered in the media, to establish production technology to expand the width from the current three centimeters to one meter, and they are making progress in line with the commercialization plan targeted for FY25. In addition, infrastructure materials business overseas is progressing steadily, as evidenced by the launch of the synthetic wood FFU plant in the Netherlands last fiscal year. In reference to reinforce the ESG management platform shown at bottom right, the ratio of product sales that enhance sustainability has steadily increased to 75%. For GHG reduction, we promoted renewable energy at our overseas site and achieved the midterm plan target of 33% reduction two years ahead of schedule. On initiatives around human capital, we raised wages by more than 4% in FY23 and are planning to invest in human capital at a higher level in FY24 compared to the previous year. On page three, this slide illustrates our track record of shareholder return or policy and the plan for FY24. We will continue to be active in our shareholder return initiatives in FY24. With that, I'd like to conclude my part. Thank you for your attention.

I am Kamiwaki. Thank you for this opportunity. I will report FI2023 results in an overview of FI2024 plan. Page 4 shows Forex results and we had gains from the weaker yen as stated. Page 5 shows the overview of FY2023. This is as explained by President Cato at the outset. Please look at this at your leisure. Page 6 shows the results by segment. High-performance plastics companies saw a substantial increase in net sales and operating profit, mainly in the mobility field. Housing companies saw a decrease in net sales and operating profit owing to the prolonged slump in the new housing market conditions and a surge in component costs. Urban infrastructure and environmental products companies saw an increase in net sales and operating profit on the back of a thoroughgoing efforts to secure margins and growth in prioritized product sales. Medical business saw a decrease in operating profit due to substantial impact of the decline in sales of COVID-19 diagnostics kit in the U.S. And for other business domains, upfront investment in major themes progressed steadily, as stated. Page 7 shows the first half and the second half results by segment. Please look at the second half results in particular. Mobility field drove the second half results with HPP posting a substantial increase in operating profit. On the other hand, profit in housing field dropped due to a significant impact from reduced orders in the first half while we made progress with its profitability enhancement measures. Other and corporate expenses were as stated. Page 8 shows FY20-23 resource analysis. Please look at the right-hand side for the analysis of operating profit. Sales volumes and product mix were particularly impacted from decreased demand compared to the January forecast, but it was covered by selling price and raw material margins. We were able to control fixed costs better than the forecast, posting a total profit increase of 2.7 billion yen, more or less in line with January forecasts. From page 9, FY2024 plan, our forex assumptions are as stated. Page 10 shows FY2024 plan P&L overview and returns to shareholders. These are as explained by President Kato at the outset. Please look at this at your leisure. Page 11 shows outlook for market conditions. The global automobile production volume in the upper left was slightly lower than expected in Q4 FI2023. In FI2024, we expected to be more or less flattish year on year. In the lower left, smartphone shipments were in line with expectations in Q4 FI2023, and FI2024 outlook is flattish year on year. Housing visitors in the upper right over all visitors in the second half of FY2023 recovered to the same level as the previous year and we expect exhibition visitors to recover in FY2024. We expect new housing stats shown below that to gradually recover after the trough in the second half of FY2023. Domestic NAFTA placed in the bottom right saw a slight surge compared with forecast in Q4 FY2023. Our assumption for FY2024 is to remain at the high level. Page 12 shows FY2024 plan by segment. All segments plan for both net sales and operating profit to increase with record operating profit in all segments except in the housing company. For high-performance plastics company, we forecast growth in the mobility field and recovery in electronics-related demand. Focusing on semiconductors, we plan for substantial increase in net sales and operating profit. For housing company, we anticipate a modest recovery in new housing construction market conditions and we plan for substantial increase in net sales and operating profit on the back of measures to strengthen housing business profitability and renovation business growth. For UIEP, we anticipate a gradual market recovery in the second half. We will focus on expanding sales of prioritized products, increasing overseas sales and improving selling prices. For medical business, we will make sure to capture diagnostics demand in Japan and overseas. We plan to expand the sales of broad coagulation devices and reagents in Japan and China and new products in the U.S. For other, we will continue to aggressively pursue large-scale themes as we did in FY2023. Page 13 shows the first half and the second half FY2024 plans by segment. We plan for operating profit growth both in the first half and in the second half. In the first half in particular, HPP will continue to drive the group as a whole. We plan for an increase in net sales and operating profit across all segments in the second half. In the housing company, despite plans for a decrease in net sales in the first half due to a drop in orders received in FY2023, we forecast an increase in the full-year operating profit by promoting measures to strengthen profitability. Page 14 shows FY2024 plan analysis. Please look at the analysis of operating profit in the right. Regarding sales volumes and product mix, we plan for significant growth on the back of our expectation for gradual recovery in global market and in the Japanese housing market, where we are expecting a large positive numbers. Regarding fixed costs, we are exceeding a certain increase mainly driven by human capital investment. We plan for operating profit to increase by 7.6 billion yen by securing the same level of margin from the previous year and with foreign exchange gains. Page 15 is the last page which shows consolidated performance. We will be aiming for another record operating profit in FY 2024 exceeding 100 billion mark for the first time. We also forecast to renew EBITDA record of FY2023 again in FY2024. We also stated ROE and other matrix for your reference. This ends my presentation.

Yes, I am Nishida. I will now explain the financial results for FY2023. Starting on page 17, the number of consolidated subsidiaries decreased by five companies to 143. The number of equity method affiliates decreased by one as a result of reviewing our ownership in Seki Suijose Corporation. On page 18, I will walk you through the items below the ordinary profit line. Ordinary profit was 105.9 billion yen, up by 1.7 billion yen year-on-year, and marked a new high thanks to higher OP and Forex gains of 7 billion yen, resulting from weaker yen than the previous year. Extra ordinary profit included a gain on the sale of shares in Sekisei House as we divested our holdings. Extraordinary losses included impairment losses on fixed assets related to lithium-ion battery business and the loss on valuation of shares in Volocopter, a mobility-related venture company. Net profit increased 8.7 billion yen to 77.9 billion yen, reaching a new high. Next, the balance sheet on page 19. Total assets increased 95.1 billion yen, partially due to weaker yen, and so the underlying increase was 52.1 billion yen. Since most of the interest-bearing debt is long-term financing, the strong cash flow has led to the increase in cash and deposits. Inventories increased by 11.4 billion yen, out of which 7.7 billion yen in non-housing related business was due to an increase in overseas inventories triggered by the weaker yen. Therefore, the inventory level was essentially flat over last year. Investment securities decreased by 41.7 billion due to sales that was offset by 34.1 billion yen because of the rise in the market value. Page 20, please. Net interest-bearing debt decreased 37.2 billion yen, which turned the company to be virtually debt-free. Most of that was due to an increase in cash on hand. Retained earnings were up due to net income and down due to shareholder returns. We conducted share buyback of 8 million shares and retired the same share accounts during the year. The increase in the market value of stock holdings and the depreciation of the yen have the effect of increasing net assets and unrealized gains on marketable securities and foreign currency translation adjustments. ROIC, ROE, equity-to-asset ratio, and debt-to-equity ratio are indicated on the table. Although net profit increased significantly, ROE only improved by a mere 0.4% due to the impact of the higher shareholder equity base resulting from investment securities and foreign currency translation, as just mentioned. Next is the consolidated cash flow on page 21. Cash flow from operating activity was $106.6 billion, a $35.1 billion improvement from the previous year. On top of the improved profits, a decrease in tax payments and improved working capital requirement contributed. Lower tax payment was due to higher than normal tax payments in FY22, mainly due to the sale of investment securities in FY21. For the cash flow from investing activities, while capex spending increased by 4 billion yen year-on-year, cash inflow of 38.1 billion yen from the sales of investment securities and other activities contributed to significant improvement. Free cash flow, including dividend payments, was a net cash inflow of 59 billion yen, and net cash outflow of 16.2 billion yen was booked for share repurchases, resulting in an increase in cash on hand. Depreciation and amortization, CapEx and EBITDA by segment are shown on page 22. Depreciation and CapEx are rising, with capital expenditures of about 1.2 times the D&A this fiscal year. EBITDA, a pool of funds for these fundings, increased by 5 billion yen and reached a new record high. Plan for depreciation CapEx narrative expenses is shown on page 23. We intend to increase capital expenditures in FY24 for capacity expansion and DX related investments. That will be all from me. Thank you very much for your attention.

I am Shimizu of High Performance Plastics Company. Thank you for this opportunity. Page 25 shows performance trends. In FY2023, demand mainly in mobility increased and the sales of high performance products grew. Both net sales and operating profit increased substantially at 412.9 billion yen and 50.9 billion yen respectively, a record profit for the first time in six years. In FY 2024, driven by continued mobility growth and recovery of semiconductor and electronics-related demand, we plan for net sales of 452.5 billion yen and operating profit of 56.7 billion yen. an increase of 5.8 billion yen in profit year-on-year, aiming for two consecutive years of record profit. Page 26 shows FY2023 resource analysis. The bar graph in the left shows net sales increase of 16.5 billion yen year-on-year to 412.9 billion yen in FY2023. Analysis of operating profit is shown in the right. It increased substantially by 10.8 billion yen from the previous year. Although demand in the industrial field remains sluggish, an increase in net sales volume and product mix mainly in the mobility field, margin increase and foreign exchange gains contributed to the results. As per the table at the bottom, sales volumes and product mix of mobility and electronics turned around in the second half, resulting in a significant operating profit increase. Regarding the difference from January forecast in the top table, sales volumes and product mix came down significantly due to the shipping restriction by force majeure of European interlayer firm raw material manufacturer and mobility volume reduction associated with sluggish aircraft demand in the U.S., as well as sales decline in industrial field on the back of sustained low demand for construction and consumer goods in Europe, in the U.S. and Japan. We tried to recover through cost reduction and fixed cost reduction, but finished at 0.6 billion yen short of January forecast. Next overview of FI 2024 plan on page 27. As shown in the left bar graph, we anticipate a strong mobility market and recovery in semiconductor and electronics market and a plan for net sales of 452.5 billion yen. an increase of 39.6 billion yen from the previous year. Regarding the analysis of operating profit in the right, while fixed cost is to increase due to future growth preparation, strengthening of business foundation and human capital investment, we would like to... Increase industrial net sales with assumptions of an increase in sales volume and product mix of both electronics and mobility fields through sales expansion of non-LCD products and high-performance interlayer film, as well as certain market recovery in Europe, the U.S. and Japan in the second half and beyond. We plan a 5.8 billion yen increase in operating profit, including forex gains and two consecutive years of record profit. Page 28 is the last page for HPP, illustrating net sales strengths and KPIs in the three strategic fields. Firstly, the electronics in the top left, our sales plan factored in more or less the same level of the smartphone market. for FY2024 and model semiconductor market recovery as in FY2023. As shown in the left bottom graph, we will focus on non-LCD product sales expansion, share increase in new acquisitions centered around semiconductor process materials and semiconductor use, MOCC binder resins, and so on. In addition, electronics field has seen gradually recovering after the draft in Q4 FY2022. Its profits started to increase since Q2, FY2023. We plan its net sales as well as operating profit increase again in FY2024. Next, mobility in the middle. We expect continued sales growth of high performance interlayer films mainly on HUDs. Interlayer films for HUDs in FY2023 grew 30%. We expect more than 10% growth in FY24. We struggled a little in FY23 due to EV demand slowdown, but in FY24 we will not only focus on EV application but also on electrical equipment application because such demand is on the increase associated with autonomous driving. Sekisu Aerospace struggled again in Q4 FY23 due to production suspension pertaining to major U.S. aircraft manufacturers' quality issues. It plans for posting profit with a certain demand recovery and a ceiling price improvement in FY24. The bottom graph in the middle is high-performance interlayer film sales growth. It grew faster than the market in FY23. Because of commoditization of sound insulation film, we would like to index new interlayer films for HUD with heat shielding and color design functions as NHPP. NHPP is generating around 30% to 40% of profit in the mobility field. Additionally, not written in the slide, but much of the sales and operating profit increase and overall full-year profit increase of 10.8 billion yen in FI 23 is generated by mobility. We plan for continued net sales and profit growth in FI 24. Lastly, the industrial field in the top right. Since the second half of FI 22, demand for construction and consumer goods in Europe, the U.S., and Japan remains sluggish, and we project such trends to continue in the first half of FI 24. For the second half of FI 24, we land net sales increase with a projection of a certain market recovery and operating profit increase through selling price improvement with higher input cost and labor cost and through fixed cost control. Regarding the bottom graph, sales of labor-saving, environmentally-friendly products such as insulation materials, Long craft tape for packaging machines and blow-molded products had downtrend until the first half of FY23. It turned around in the second half of FY23, growing positively year on year. We will continue to expand the sales in FY24. Additionally, net sales and operating profit of the industrial field declined in FY23, but profit turned around in Q4 FY23. However, slightly, we plan for net sales growth and a severe 100 million yen of operating profit growth in FY24. This completes my explanation. With 56.7 billion yen of operating profit and two consecutive years of record profit, we'd like to drive the overall company for performance in FY24. Thank you very much.

My name is Masahita Yoshida, and I have been appointed as the president of the housing company effective January this year. Now, let me go over the better updates on the housing company. Slide 30 shows the performance trends. In FY23, both sales and profits declined due to the prolonged slump in the market for new housing and the impact of rising component costs. Yet, OPXC did a general outlook owing to reduction in fixed costs. For FY24, based on our assumption that the new housing market will gradually recover, we plan to increase both sales and profit with measures to enhance profitability and growth in the renovation and other businesses. At page 31 is FY23 results analysis. As shown by the graph at lower left, net sales increased in the renovation business thanks to measures including the reinforcement of personal structure, while sales decreased in the housing business due to the sluggish market. Overall, net sales were down by 7.7 billion yen. On the right is the analysis of OP. For the housing business, despite the significant drop in the number of houses sold and soaring component costs, the company worked to mitigate the profit decline by improving the sales mix in CR and cutting fixed costs. The measures to enhance profitability are delivering positive results, as shown by the change in the fixed costs for the housing business in the second half. The renovation business achieved 200 million yen profit growth on the back of successful efforts to capture demand by strengthening the headcount structure. The other businesses also achieved profit improvement, resulting in an overall OP of 27.7 billion yen, 0.7 billion yen higher than the January outlook. Page 32. Next, this is the plan for FY24. The bars on the left shows that we are projecting a flat sales in the housing business, with the lower unit sold being offset by higher unit prices. In the renovation and other businesses, we expect sales to continue to increase. And for the whole housing company, we expect net sales to go up by 6.3 billion yen year-on-year to 536 billion. As shown on the right, the company OP is expected to grow by 2.3 billion to 30 billion yen with each sub-segment expected to grow. In the housing business, the plan calls for an OP growth of 1.5 billion a year, as a negative impact of 1.4 billion with 130 less houses to be delivered will be offset by fixed cost savings, owing to measures to strengthen profitability, as well as by sales mix in CR activities. In the renovation business, we plan to increase orders and continue to grow profits by further augmenting the personal structure. Slide 33. Here, I would like to add a few words on the status of each business segment. For FY23, new housing orders indicated at top left slightly exceeded the January forecast, and in the second half, we secured 100% of the previous year's orders in value. In FY24, we expect a gradual market recovery and target to grow the new housing unit order by 1% in the first half and by 3% in the second half. And the table in the middle illustrates orders by type of construction. Apartment building kept a good pace versus the previous year in FY23, contributing to a rise in the unit price. In FY24, we'll continue to focus on expanding sales of apartment buildings, and in conjunction with area-specific product strategies, we'll strive to increase orders. On the right is a renovation business, which enjoyed steady order growth in FY23. For FY24, we'll continue to raise the skill sets of the workforce and focus on large-scale projects proposing thermal insulation renovations and also on external sales to achieve further growth. In the town and community development business shown at bottom left, sales temporarily dipped in FY23, but we plan to launch many new projects in FY24 and expect a record high net sales. Last but not least, measures to strengthen profitability. In FY23, we made steady progress mainly in reducing fixed costs by optimizing the production system and shifting personnel to growth areas. In FY24, in addition to further fixed cost reduction, we intend to achieve solid results in terms of marginal profit by strategically introducing products and other measures. This will conclude my presentation on the housing company. Thank you very much.

I am Hiroi of Urban Infrastructure and Environmental Products Company. Allow me to present the UREP. I will explain performance trends on page 35. In FY23, we posted net sales of 234.8 billion yen operating profit of 22.1 billion yen and the OP margin of 9.4%. Despite the decrease in housing demand and the stagnant construction market conditions, with strong focus on securing margins and the sales expansion of prioritized products, we increased both net sales and operating profit and achieved two consecutive years of full-year record profit. In FY24, while market conditions are expected to remain stagnant, in the first half, we project a moderate recovery from the second half. We will focus on sales expansion of prioritized products, overseas sales increase and selling price improvement and aim at three consecutive years of record profit with net sales of 245.4 billion yen, operating profit of 24 billion yen and OP margin of 9.8%. Next, page 36 shows FY23 resource analysis. Net sales in the left were 234.8 billion yen, an increase of only 0.5 billion yen year-on-year, but still net sales grew. In Japan, despite sluggish market conditions, we saw sales increase of prioritized products, mainly polyethylene pipes for water supply construction and plant applications, as well as fire-resistant materials and so on. Overseas, demand for CPVC was sluggish, especially in India, but pipeline renewal business grew by winning new projects and through other efforts. Turning to the right for analysis of operating profit, with a strong focus on securing margins, profit grew by 0.9 billion yen year-on-year to 22.1 billion yen. but it finished short of January forecast. This was due to a larger-than-expected decline in volume in Q4 due to weaker-than-expected market conditions, particularly for detached houses, which couldn't be fully offset despite our efforts to curb fixed costs. Page 37 shows overview of FY24 plan. Net sales on the left-hand side is planned at 245.4 billion yen and increase of 10.6 billion yen from the previous year. If we achieve this, it will be our record net sales exceeding the previous record of 240.3 billion yen in FY16. In Japan, we will focus on expanding sales of prioritized products centered on polyethylene pipes and fire-resistant materials, and we will also continue to improve selling prices to hedge against the recent increase in total business-related costs such as high raw material costs and rising logistics costs. Overseas, we will focus on expanding CPVC sales areas, sales expansion of pipeline renewal business in Asia and North America, and stable operation at FFU factory in Europe. As shown on the right, we plan operating profit of 24 billion yen, an increase of 1.9 billion yen from the previous year. As just described, we plan to earn 2.5 billion yen from the sales volume increase of prioritized products and overseas. and ¥3.4 billion from selling price improvement to cover the increase in raw material costs and fixed costs. Lastly, I will explain three strategic fields on page 38. Pipe system in the top left is planned for net sales increase in both the first and second halves of FY24. Regarding housing and non-residential markets in Japan, we view markets to recover moderately from the second half and we'll focus on expanding sales of prioritized products and improving selling prices to counter increased cost. Regarding the plant market, we expect the market, mainly semiconductor-related market, to recover from the second half, and we will focus on our sales activities to win projects. Next, regarding building and infrastructure composite materials, In the first half, FI24 net sales is forecast to decline slightly, but with an increase in the second half, net sales is to increase on a full-year basis. By further developing the market for fire-resistant and non-inflammable materials, and with a stable FFU factory operation in Europe, which started production last year, we aim to expand the adoption of railway sleeper applications overseas. Regarding building materials and sexy home techno, given the sluggish market, we will focus on expanding sales of prioritized products such as high-flow rate draining systems and nursing care products. Infrastructure renovations shown at the bottom is planned for net sales increase both in the first and the second half of FY24. For pipeline renewal, demand trend in Japan is stable and we will continue our focus on cultivating new customers overseas. For aqua system, we will focus on expanding sales of prioritized products such as highly functional panel tanks. Regarding the growth areas in the bottom, our plan to grow the ratio of prioritized products in sales and in domestic sales to increase both in the first half and the second half compared against the period a year before respectively. We will accelerate production promotion activities that contribute to solving social issues such as labor shortages and countermeasures against flooding. Regarding sales by overseas region, we plan to increase sales in all areas in FY24. Sales in Asia will be driven by CPVC, Europe by FFU, and North America mainly by pipe renewal. Sales of gross driving businesses are as stated. That concludes my explanation. Thank you very much.

I am Takahashi from Sexy Medical. I would like to start with the performance trends on page 40. Earnings in the medical business have been steadily expanding since FY21, and last fiscal year, OP marked 12.5 million yen, which was retargeted under the previous midterm plan. The plan in FY23 called for growth in both sales and profits. In Japan, we steadily captured the increasing demand for testing, especially for infectious diseases, and sold new pharmaceutical ingredients in the pharmaceutical sciences business. Partially boosted by the effects, sales reached a new record high at 92.6 billion yen, yet opium was down 11 billion yen year-on-year due to sales drop for the COVID testing kit in the U.S. For FY24, we will focus on expanding sales of blood coagulation devices and reagents in Japan and China, in addition to capturing testing demand in Japan and overseas. In the U.S., we'll also focus on expanding sales of a new combo kit for flu and COVID testing kit and aim to exceed 100 billion in sales for the first time as medical business to achieve new record highs, 103.8 billion yen in sales and 12.6 billion yen in OP. Next on page 41 is the results analysis for FY23. As indicated on the left, sales marked ¥92.6 billion up ¥2.9 billion a year, and based on the figures in parentheses which exclude sales of flu and COVID diagnostic kits, the other businesses grew by ¥3 billion. However, OP was down by ¥1.6 billion to ¥11 billion. In the diagnostics business, we captured the testing demand in Japan mainly for infectious diseases, increased sales of blood coagulation reagents in China. And in the pharmaceutical sciences business, contract manufacturing of pharmaceutical ingredients grew. However, revenue in the U.S. was significantly hit by sales drop of COVID testing kits and fixed costs increased given the front-loaded investment in R&D and human capital. In sum, sales were up and profits were down a year, also falling short of the January outlook. I will now turn to page 42 for an overview of the FY24 plan. Net sales are projected at 103.8 billion, up 11.2 billion yen year-on-year. And excluding the flu and COVID testing kits, sales are expected to increase by 5.8 billion yen and up by 1.6 billion yen to 12.6 billion yen. NFI24 will continue to steadily capture domestic demand for testing and overseas, in addition to expanding sales of blood coagulation devices and reagents in China, will focus on new product sales, a combo kit for flu and COVID testing in the United States. And the pharmaceutical sciences business will continue to focus on sustaining new orders and aim for a new record high for OP. The last page, page 43, shows the status of each business subsegment. In FY23, as shown at the top left, domestic diagnostics demand remains strong, particularly for infectious diseases. In FY24, we'll continue to capture the testing demand and particularly focus on expanding sales of immunology reagents and blood coagulation devices and reagents. For the overseas diagnostics business at upper right, NFI 23, cells were up thanks to firm sales of blood coagulation devices in reagents in China, as well as FX, despite the sales decline of COVID test kits in the U.S. In FY24, we'll focus on expanding sales of new products in the U.S. while continuing to grow sales of blood coagulation testing devices and reagents in China. In other Asian countries, we will continue to expand sales of reagents in Southeast Asia, leveraging on Veritas Laboratories based in Singapore. In pharmaceutical sciences at bottom left, sales of new pharmaceutical ingredients remain strong in FY23, and we intend to acquire new orders in FY24. The bottom right shows the sales trend of infectious disease testing kits. Last fiscal year, a leading distributor was hit by a cyberattack, which hampered delivery and sales promotion, and shipment of flu testing kit was especially hit. The issue has already been resolved, so we will continue our efforts to exploit the demand for testing kits in FY24. That would be all regarding the medical business.