Sumitomo Chem Unsp/Adr

Now we'd like to start the conference call on the financial results announcement for the fiscal year 2024 of Sumitomo Chemical. Thank you very much for your attendance today. Today, Senior Managing Executive Officer Sasaki will give you the financial results for fiscal 2024 and outlook for fiscal 2025. and then after that executive officer and general manager yamauchi of accounting department will join us and have the qa session we plan to conclude this meeting by 5 50 pm japan time over to you mr sasaki thank you very much my name is sasaki of sumitomo chemical thank you very much for taking the time out of your business schedule to participate in our conference call I would like to thank all the investors and analysts for your continued support and understanding of our business. I would like to take this opportunity to express our deep appreciation to all of you. Now, I will present our financial results for the fiscal year 2024. First, please go to page 4 of the material. Before I go into the details, first, I would like to give you the summary of the financial year, 2024 financial results. Co-operating income for fiscal 2024 was 140.5 billion yen. Back in fiscal 2023, company incurred co-operating loss of 149.0 billion yen. But compared to that, we achieved a V-shaped recovery in a year with an improvement of approximately 290.0 billion yen over the previous year. In the forecast announced in February this year, we expected the core operating income to reach to 100 million yen thus actual op income result indicates an improvement of more than 40 billion yen over the previous forecast some gains on the sale of businesses has been postponed to the year 2025 but We had already factored this in a risk buffer, so the gain has been roughly in line with our expectations. Thus, the increase in profit over the forecast means an improvement of actual performance of the business. As you can see in the graph on the left-hand side, Looking at the current status of the business, the profit and loss shown in the blue bars is steadily improving quarter after quarter, steadily. And ROIC result. was 2.2%, which is not at all a satisfactory level, but still a significant improvement year on year. Now I will explain the details of the financial results. Please go to page 5. Consolidated results for fiscal year 2024 are as follows. Sales revenue totaled 2,606.3 billion yen, an increase of 159.4 billion yen year-on-year. Co-operating income, as mentioned earlier, was 140.5 billion yen, an improvement of 289.6 billion yen year-on-year. And below that, non-recurring items including impairment losses of 26.3 billion yen and restructuring costs of 23.6 billion yen were offset by the recognition of 86.1 billion yen of our share of the gain on debt forgiveness of petrol labig as a non-recurring item and a gain of 14.3 billion yen on the sale of fixed assets, including dormitories and the company housing. As a result, the company recorded a total gain of 52.5 billion yen on non-recurring items. In the previous fiscal year, we posted a total of 269.4 billion yen in impairment losses in areas such as the Sumitomo farmers' patent rights and goodwill, essential chemicals-related facilities at our Chiba plant, and other assets, and lost a total of 339.8 billion yen including 48.4 billion yen of restructuring costs on the reorganization of Sumitomo Farmer's North American subsidiaries. But in fiscal 2024, non-recurring items improved by 392.3 billion yen compared to the previous year. In fiscal 2024, operating income was 193.0 billion yen, significant improvement of 681.9 billion yen from the previous year. Finance expenses amounted to ¥134.9 billion, a deterioration of ¥161.0 billion from the previous fiscal year, mainly due to the impact of losses related to the waiver of loans to PetroRabic. Out of this, foreign exchange losses amounted to 10.9 billion yen due to the appreciation of the yen from the end of the previous fiscal year to the end of the current fiscal year, and worsened by 43.4 billion yen compared to the previous fiscal year. Income tax expense was 15.4 billion yen, an increase of 12.7 billion yen from the previous year. As a result, net income attributable to owners of the parent was 38.6 billion yen, a 350.4 billion yen improvement from the previous year. Regarding exchange rates and NAFSA prices which affect our business results, yen weakened to 152.62 yen to the dollar, and the NASA price increased to 75,800 yen per kiloliter, higher than the previous year. Next, I will explain the sales revenue by segment. Please refer to page 6. First, I will explain on the sales revenue. Sales revenue for the entire company increased 159.4 billion yen from the previous year, and all segments reported an increase in revenue. The following is a factor-by-factor analysis of the year-on-year change in sales revenue. Increase by 18.0 billion yen is due to sales price. This is mainly due to higher selling prices in essential and green materials segment resulting from higher NAFSA prices. Increase of 85.6 billion yen is due to volume. In essential and green, sales decreased due to restructuring of aluminum and other businesses, but increase in shipment volume of other segments compensated for the decrease. Conversion of overseas subsidiary sales revenue into the yen was a factor in the increase of 55.8 billion yen. Please refer to co-operating income by segment. Please go to page 7. Co-operating income and loss for the entire company improved significantly by 289.6 billion yen year-on-year. The following is a factor-by-factor analysis for the entire company. First of all, on the price, there was a 30.0 billion yen increase. This was mainly due to higher methionine prices in agro and life solution and higher MMA and petrochemicals prices in essential and green materials. Increase by 122.5 billion yen is due to the cost. SG&A expenses decreased significantly due to the progress in reorganization and streamlining at Sumitomo Farmer's North American subsidiaries. The volume difference and other factors resulted in a positive 137.1 billion yen. In agro and life solution, shipment of indifference with higher growth margin increased and shipment increased due to a reduction in the impact of inventory backlogs in distribution. In ICT and mobility segment, shipment of touchscreen panels increased and shipment of photoresists and high-purity chemicals increased due to a recovery trend in the semiconductor demand. At Sumitomo Pharma, shipment increased due to the sales expansion of three key products. In others and adjustments, there was a significant improvement due to the recording of gains from the sale of shares in the diagnostic radiopharmaceuticals of Nihon Medifelix and the Sumitomo Bakelite. Next, I will explain the consolidated balance sheet. Please refer to page 8. Total assets as of 31 March 2025 amounted to 3,439.8 billion yen, a decrease of 495.0 billion yen from the end of the previous period. The decrease is mainly because of the waiver of long-term loans receivable from Petrolabic. including others under non-current assets and sale of shares of Roivant by Sumitomo Pharma. Interest-bearing debt totalled ¥1,286.1 billion, a decrease of ¥277.4 billion from the end of the previous fiscal year thanks to cash generation through short-term improvement measures. Total equity amounted to 1 trillion 74.4 billion yen, a decrease of 90.0 billion yen from the end of the previous fiscal year. Next, I will explain consolidated cash flow. Please refer to page 9. Cash flow from operating activities was positive 233.0 billion yen. an increase of 284.3 billion yen from the previous year. This was mainly due to an improvement in income before income taxes. Cash flow from investing activities was positive 85.2 billion yen, a decrease of 197.5 billion yen from the previous year. In fiscal 2024, income increased due to the sale of shares of raw event held by Sumitomo Pharma, proceeds from the sale of shares in affiliates and cross-shareholding, and the sale of fixed assets such as dormitories and company housing. Free cash flow was positive 318.3 billion yen. a 481.8 billion yen improvement from the negative 163.6 billion yen in the previous fiscal year. Cash flow from financing activities was negative 300.8 billion yen due to repayment of debt and increase in expenses by 350 billion yen. Next, I'd like to explain our full year forecast for fiscal 2025. Please refer to page 11.

Please look at page 11. This page shows a summary of the financial forecast for fiscal year 2025. We expect co-operating income for FI25 to be 150 billion yen, an increase of about 10 billion yen compared to FI24. As shown on the left-hand side and in the color of blue bar graphs, These are the underlying profit excluding sales gains on business divestitures. Albeit some negative impact from stronger yen, we aim to achieve 100 billion yen of underlying profit excluding sales gains on business divestitures driven by a significant improvement due to the recovery of shipment volumes in each segment and a reduction in equity method losses due to the reduction in our equity stake in Petrolabic. Although we expect the sale of Sumitomo Farmer's Asian business in FI25, capital gains on business dispositions are expected to decrease slightly compared to FI24. We will steadily accumulate growth to achieve the core operating income of 200 billion yen for FI27 as outlined in our mid-term plan. Please look at page 12. I will now explain the business environment surrounding us. First, regarding the economic situation at the top, the outlook for the global economy is facing increasing downside risks amid growing uncertainty over trade friction and policy management. And here, the weather symbols show our perception of the business environment for our major business fields in the usual format. For crop protection at the top, overseas distribution inventory backlog is gradually being resolved, but price competition is expected to continue. For methionine, the market price is expected to fall after a pause in last year's market rise. For displays, mobile-related materials are performing well. For semiconductors, demand is gradually recovering. For petrochemical and raw materials markets, low margins are expected to continue. So much for the business environment. Now please turn to the next page. This page shows the impact of the U.S. tariff policy. At the top, we are describing the overseas sales scale. Actually, on page 39 of today's materials, you will find the overseas sales data. And it's about 16% or so, or about 400 billion yen. And that is mainly from Sumitomo Pharma. As to the impact coming from the tariffs, we believe that it can be broadly divided into two parts. First, there is a direct impact which is an increase in tariff costs due to the procurement of raw materials from outside the United States at our U.S. basis, and an indirect impact due to the inclusion of the United States in the supply chain and macro factors such as the global economic recession. So direct impact and indirect impact. Let us look at the direct impact first. As to pharmaceuticals, At this moment, they are currently not subject to reciprocal tariffs by country and item-specific tariffs have not yet been decided. However, even if a 25% level tariff is imposed, we expect the impact to be minimal as the amount subject to tariffs is small. We expect a certain degree of impact on businesses other than pharmaceuticals, but we believe that we can limit the impact by taking measures such as first making efforts to pass on the increase in prices, shipping as much inventory as possible to the United States during the 90-day tariff grace period, and optimizing our global production and sales system. As for the latter indirect impact, it is difficult to predict its impact due to the high level of uncertainty at this time. Therefore, we have not factored that in the forecast. That said, we believe that shipments were brought forward to FI 2024 mainly in the ICT and mobility business, so only that impact is factored in. The impact, we believe, is about 10 billion yen on core operating income, which is included in the forecast. Now, let's move on to the full-year performance forecast for FY25 on page 14. Sales revenue is expected to decrease by 266.3 billion yen year-on-year to 2.34 trillion yen. Core operating income is expected to increase by 9.5 billion yen year-on-year to 150 billion yen. Operating income is expected to decrease by 88 billion yen year-on-year to 105 billion yen. Net income attributable to owners of the parent is expected to increase by 1.4 billion yen year-on-year to 40 billion yen. So we expect revenue to decrease but profit to increase. As stated here, we are assuming a strong yen and low material prices for the exchange rate and NAFTA prices. Sales revenue and cooperating income will be explained in the slides on the following slides. Regarding items below co-operating income, first, in FY24, as part of Petrolabic's financial restructuring plan, we waived our credit claims to Petrolabic and recorded a non-recurring gains of 86.1 billion yen as a share of the debt forgiveness gain generated by Petrolabic. On the other hand, due to our debt waiver, we recorded a financial loss of 109.8 billion yen, which is below operating income. In FY25, there is no such impact. Therefore, compared to the previous year, there will be a large decrease in operating income, but net income will be at roughly the same level year on year. As for the dividend forecast for this fiscal year, as stated here, we expect interim dividend of ¥6 per share, end of term dividend of ¥6 per share, making annual dividend ¥12 per share. This means that we expect a dividend increase by ¥3 compared to the previous fiscal year. Next, on page 15, I will explain the segment revenue. we expect overall revenue for FI25 to be 2.34 trillion yen, a decrease of 266.3 billion yen compared to FI2024. By segment, we expect a decrease in revenue in all segments. Analysing by factors on all company basis, The sales price variance is expected to be negative by 12.5 billion yen. The volume variance is expected to be negative by 230.3 billion yen. And the difference in sales revenue of overseas subsidiaries on the yen basis is expected to be negative by 23.4 billion yen. The volume variance is significantly negative. This is due to periodic plant maintenance at Petrobic in essential and green materials. And the fact that the sales of the subsidiaries are no longer consolidated due to the sale of these businesses in FY2024. Next, page 16. We expect core operating income to be 150 billion yen, an increase of 9.5 billion yen from FY24. We expect agro and life solutions and advanced medical solutions to be on par with the previous year, ICT and mobility solutions to decrease, and essential and green materials and semi-dome pharma to increase. Analyzing the company-wide results by factor, we expect the price variance to be negative 6.5 billion yen compared to FY2024. the cost variance to be an improvement of 2.5 billion yen, and the volume variance, including the increase or decrease in equity method investment profit, to be an improvement of 3.5 billion yen. Regarding price variance, the terms of trade will improve in essential and green materials due to the penetration of price increases and an increase in market prices for some products, But the decline in the market price of methionine in agro and life, the decline in sales prices of display-related materials in ICT and mobility, and the large impact of drug price revisions at Sumitomo Pharma are expected to result in a negative result for the company as a whole. Regarding cost variance, There will be an increase in depreciation expenses in advanced medical due to the operation of a new plant. But as various rationalization measures will continue to be implemented in other segments, and we expect a positive result for the company as a whole. Regarding the volume variance, including increase or decrease in the equity method investment profit, We expect an improvement in the equity method investment profit of Petro-Arabic and an expansion of sales of three key products in North America at Sumitomo Pharma. However, due to the impact of early shipments due to the U.S. tariff policy, a decrease in gains from the sale of businesses and a decrease in the profit associated with affiliated companies due to the sale of business, it is expected to remain only slightly positive. Next, I will explain the consolidated cash flow forecast. Cash flow from operating activities is expected to be 160 billion yen, a decrease of 73 billion yen compared to FI 2024. Cash flow from investing activity is expected to be negative 40 billion yen, a decrease of 125.2 billion yen compared to FY2024. In FY24, we received the income from the sale of Roivant shares and Sumitomo Bakelite shares, and we proceeded with the sale of Crochet Holdings as well. And here we are talking about significantly big amounts. We plan to sell businesses and sell strategically held shares in FY25 as well, but income is expected to be lower than FY24. As a result, we expect free cash flow to be positive 120 billion yen. We also expect the balance of interest-bearing debt at the end of fiscal year 2025 to be 1.19 trillion yen. So that's a decrease. This concludes my explanation of the financial results. We would now like to take your questions.

Now we'd like to start the Q&A session. Those of you who have a question, first of all, please press asterisk N1 of your telephone. And when your request is accepted, you will hear the audio message of confirmation. Then we will call your name and start your question. If you wish to cancel your request, please press asterisk N2. And we'd like to limit the number of questions per person to two questions per questioner. So I would like to call the first person to ask a question. Mr. Watabe from Morgan Stanley MUFG Securities, please. Thank you. This is Watabe from Morgan Stanley. Congratulations on the V-shaped recovery. Thank you very much. And I have two questions. First of all, the overall, the financial result. When you made announcement about the meter management plan in March, you indicated some image in the 120 to 130 billion as the actual performance result, and 30 to 40 billion will come from the sale of the business. But you changed this to 100 billion. Is it because of the impact of exchange rate? Maybe not so different from the previous announcement regarding the exchange rate. And so maybe the impact is because of the tariff policy. And how big do you think is the impact based upon your actual results? So last year, how much was the gain from the sale of a business? Probably more than 60 billion. But could you please give us the most specific indication about the sale of business and the impact of the tariff policy of the United States? Thank you very much for your questions. So the comparison between fiscal 24 and 25 is the point of your question. sale of business in fiscal 24 was amounted to 60 billion yen. There are some slight changes, but roughly 60 billion yen, and that is the number that we have closed. And in fiscal 2025, our plan is to conduct the sale of business up to 50 billion yen. So in terms of the actual business performance, 80 billion yen in fiscal 2024 and 100 billion yen in fiscal 2025. So that is the general trend we see. On the 4th of March, we gave you the presentation and the image that we indicated on that occasion was that as for fiscal 2024, So the total is about 100 billion, but the actual performance result was 40 billion. Well, the total of 60 billion hasn't been changed, so it is reflected and embedded in the total. But the... increase from 40 to 80 billion yen is what we foresee. We took some factors as the risk factors, but they didn't emerge as the risk. And starting from 2025, there are some projects over 2024 which have been front-loaded or postponed, and that's seen in 2025. So 2024, 2025, the difference between these two years will be about 10 billion yen. So as for the actual performance, the target was on the 4th of March, we indicated our target of the 40 billion, but it has increased up to 80 billion now. For each segment, it increased, particularly the ICT and mobility. There are some other projects that have been front-loaded. As was mentioned, In your question, so because of this factor, well, it will be lower in 2025. But looking at the year 2025, on the 4th of March, when we explained our plan, well, the 150 yen to the dollar was the exchange rate assumption. But we reviewed the business based upon the exchange rate of 145 yen to the dollar. So core operating interest. income, well, the impact, well, the one yen difference in exchange rate is equivalent to 20 billion yen or so. So that is the reason behind these numbers. Yes, the gain on sales of a business is the 45 billion yen in the Sumitomo Pharma Asia. And so that is the main portion, nothing more than that. There are some, but they are not big. So altogether, 50 billion. And essential and green materials, Thank you. 8.3 billion yen improvement is what you mentioned. But your equity stake in the Arabic is down. And do you see the benefit or the positive impact of this lower equity holding? And how about the projects other than the Petrol Arabic? And when this 15% holding will be reflected on your numbers going forward? Yes, in the essential and grain material segment, That's the area of your question. First of all, on the 4th of March, we also explained about this point, but the equity holding ratio will be reduced, and the impact of that is the point of question. So the equity method loss will be decreased. About 40 billion is our projection, and no change to that. and 22.5% on the sale. When is it going to take place? That's another question. Well, initially, we expected that to happen in June, but it seems to be delayed. in Saudi Arabia. We need to negotiate with the regulator in Saudi Arabia, which is taking time. So that is the current status. So we hope to realize this in the not so distant future. But right now, it is difficult to tell you exactly when this will be materialized. And EGM, essential green end materials, We see positive factors like this, and I mentioned about this earlier a little, but we would like to make our business less dependent or susceptible to the changes of the market conditions. We also pay attention to the exchange rate as well. And we have also streamlined our operations in the past years. So altogether, 48.5 billion yen improvement is what we expect to see. Related to that point, so even with a delay, more than 40 billion, so that will remain unchanged. Am I correct? No major change to that number. So that's what we like to stress. Thank you very much.

Thank you. Next question. is from Yamada-san from Mizuho Securities. Here is Yamada of Mizuho Securities. Thank you. On page 16, Segment Kua. income. Agri and life solutions, the volume of ICT and mobility and the volume of variance, I'd like to ask questions about them. So the sales of the new pharmaceutical products is increasing, but the variance is not that big. And is it because of FX included here? So the ¥2 billion when the FX moves by ¥1, but that is for the four countries, four companies. But these agro and life and city mobility are two big segments. So other than these, are there any other factors involved? Thank you. Agro and life solutions. Overseas, the crop protection products, the shipments, the weak increase in shipments is the factored in. Meanwhile, the yen is getting stronger, and there is an impact coming from that. For agribusiness, as you know, there will be some impact coming from FX. So 152 becoming 145 yen per dollar, that will bring a big impact. And net-to-net, we have come to this number shown on this page. As to ICT and mobility solutions, compared to agro and life solutions, the impact coming from the stronger yen is stronger. So that is reflected here. and also the tariff impact is included to some extent. So the shipment increase, sales increase is expected, but because of those outside factors, that's very negative, the 11 billion yen negative. Thank you. So Agri and Life, the conversion impact is main. So the 2 billion yen per annum impact, about 25% to 30% comes from Agri and Life. And ICT and Mobility is an export business. So maybe the other half of that 2 billion yen impact. Yes, we usually say the following. Basically, these two segments are the main impact. There are segments for ICT and mobility solutions accounting for 70% of the impact and the remainder is for agro and life. That's the image that you can have. Thank you. So, acidity and mobility, negative numbers. Without effects conversion, year-on-year, the variance is almost zero. Well, you can say that in Fi25, it will be slightly positive without the effects because we have incorporated increase in shipments. But that is compensated by the outside factors. So without effects, then the positive results. The second question, the congratulations, thank you very much for increase in dividend. and about 45 billion yen of net losses. And you are engaged in the structural reform, and the dividend is to be increased this time for your shareholders. but that also means that for this fiscal year, big restructuring which involves large non-booked line numbers will come to its end. Is that right? So the numbers and the risks are incorporated in a plan. So as to non-recurring numbers, we still have some EGM-related matters to work on. So the domestic, the petrochemical restructuring in that context, there are things that we can do or we cannot do, and these factors are factored in to some extent. We do not want to bring these activities forward to the future, so we'd like to do as much work as possible during FI 2025, and that is for the recurring items. Thank you.

Thank you very much. Let us move on to the next speaker. From SMBC Nikko Securities, Mr Miyamoto, over to you. Thank you. This is Miyamoto from SMBC. Nicole, I'd like to ask you two questions. First is about ICT mobility. From the third quarter to fourth quarter, the volume of the shipment of products and also, can I also, could you please explain the current status? For example, polarizing film for the mobile and for automobiles, touch sensors and the... semiconductor chemicals and photo resist if i could have these numbers and the i appreciate it very much and as mr watabe mentioned earlier 24 and 25 the difference between these two years was 10 billion yen meaning that the the amount About 5 billion yen was front-loaded from 2025 to 2024, and how much of that is related to ICT and mobility solutions? Thank you very much for your questions. First of all, ICT and mobility solutions and the current condition of the business. First of all, with regards to display business, TV application, large-sized displays, Well, the TV set shipment, they peaked in 2020 and then slightly declining since then. And as for large size displays, we streamlined the operation in the past few years. And we tried to shift from a large size to mid to small size and also switch to the mobile displays. As for TV application, oh dear, we do not expect much growth. That's one point. And as for mid to small size displays, for smartphone application and others, well, we have been shifting to OLED displays. And we are focusing upon this business, and we believe it's going to grow steadily. So in fiscal 2025, First half and second half, we are not disclosing our forecast for 2025 divided into first half and second half because of the ambiguity related to the US tariff policy. But we generally expect the growth in 2025. As for automotive application, Well, the number of units used for the automobiles is increasing, and so we expect growth in this area as well. And probably you talked about the other companies. So generally speaking, from 2024 to 2025, we expect some increase in the business. And semiconductor materials business was another point you raised. So we expect a gradual recovery of the business. AI-related advanced leading-edge processes and the resist for those and also semiconductor chemicals, these businesses are increasing and growing. But for legacy applications, KRF or, well, when I say the advanced, it is ARF. But as for legacy application, recovery is somewhat lagging behind. But gradually, we also expect the growth of legacy application in 2025 as well. So that means steady recovery of the market. will be realized, and based upon that, the business is expected to grow. That is our observation. And the shipment, the accelerated and front-loaded And comparing 24, 25, the size of that shift was about 10 billion, and mainly in ICT and mobility. So that's what we are saying, 80% of that. So just the image, but please think that the 80% will come from that segment. So the positive increase in 24 and the minus or the reduction in 25, how big is it? So this is just an image, and I cannot give you specifics. But so 50-50, or are there any difference between these two? Yes, just the image. But in my personal view, probably 50-50 split. is the image. In 25, we expect some growth in the business, so that may mean Well, the negative repercussion in 2025 may be lower or limited, but this is just the image. So the roughly the difference is about 10 billion yen between these two years. Understood. Thank you very much. Second question is about agro and life solution in the 2025. the expected growth in the export shipment is expected. So which products, for example, Indifilin will be the leading company or the leading product? Or do you have any idea about the products? to be shipped more. And compared to the plan, the revenue of agro-end of solution decreased from the projection. However, you achieved better profit than the plan. So could you please elaborate on this point more? Thank you. First of all, the items that will increase, as you mentioned, in the Well, it was launched in Brazil three years ago. This year marks the fourth year since its launch in Brazil, and we expect solid growth of indifference. And in India, this year, We hope to get the approval in India this year. So we also expect growth in the shipment to India. So these are the main focus points. And the biorational, as for biorational, from 24 to 25, we expect growth of biorational. Of course, it depends upon the economic conditions of the markets and also impact of tariff policy may be failed. But as for biorationals, we have production facility capability in the United States. So that may give us a business opportunity in a sense. So that's how we look at this business. As for agro and life solution business, generally we expect a positive trend. And another point you mentioned was that the profit increased but the revenue was down. So that's another point of your question. So methionine, related to methionine, well, price will come down. So that's what we expect. And as for methionine, unprofitable. regions or the areas. So we are trying to reduce such business, which is the unprofitable part of the methionine. Unprofitable and at the same time price is coming down in some regions. So we are paying attention to that. Methionine is a bulk product and the impact on the sales is significant, but that consideration is also included in our observation. Well, the Revenue in 2024 was 10 billion yen lower than the original plan, but the co-operating profit was higher by 2 billion yen than the plan. So could you explain on that? I think it is because of the product mix, or the high margin products increased. So please understand this as the difference in the product mix. Understood. Thank you very much.

Thank you. We have already passed the time to close this meeting. So I see some of the people who want to ask questions. But with that, we would like to close the briefing session. Mr. Saki-san is going to make the last remarks. i'm sorry my answers i might not have been able to answer many questions sorry that we i answered questions from only three people if i 2024 we could achieve our targets or rather had we exceeded our targets if by 2025 There is uncertainty. The visibility is not good. So this year's forecast and on March 4th, we announced mid-term plan. FY2027 targets are set and we will announce make further efforts in terms of sales expansion and rationalization to achieve those FI27 targets. So thank you very much for your continuous support. Thank you for joining us today. And with that, we conclude our conference call. Thank you very much for your participation.