Terumo Corp

So, hello everybody, and thank you very much today for ascending Terumo's financial results for the third quarter of the fiscal year ending March 31st, 2026. Today, before proceeding, I would just like to give an overview, and Mr. Hagimoto-san, CFO of Terumo, will give an explanation, followed by time for question and answer, making a total of 45 minutes for today. For this webinar, there is simultaneous interpreting available via the Zoom, where you may listen to English or Japanese in either direction. Please do use the globe button at the bottom to choose English or Japanese. The materials displayed on screen will be English only. If you require English disclosure materials, please refer to Terumo's webpage. If there are any problems during the, we will let you know by email if there are any problems with connection throughout. Also, there is just one disclaimer before beginning. All of the explanation that we're about to give is based on current results. And all of these, they are based on assumptions using information available at the time. Accordingly, it should be noted that actual results may differ from those forecast or predictions due to various factors. So with that, I would like to hand over to CFO Mr. Hagimoto for an overview of the financial results. Thank you. Hello, this is Hagimoto, CFO of Teramo. Let me walk you through the highlights of our financial results. Thank you very much for your participation today. So this is the highlights of our financial results for the third quarter of the fiscal year ending March 26. First of all, the highlights. Strong earnings results exceeding guidance. So for revenue with the highest ever results both for the quarter and the third quarter year to date. We had strong sales led by North America with 9% growth excluding the FX impact.

In particular,

Revenue reached record highs both for the quarter, in particular demand growth in North America remained strong, resulting in a year-on-year increase of 9%, excluding index impact. In regard to profits, adjusted operating profit and profit for the year all reached record highs in the Q3 year-to-year basis. Although we recorded certain one-time expenses from the first half of the fiscal year, Our globally implemented pricing measures and appropriate cost control enabled us to deliver results that exceeded the pace assumed in our 25 guidance, fiscal 25 guidance. Please note that from starting from this quarter, the consolidated results will be the leather, cues and plant and organox, both of which were acquisitions announced earlier in this fiscal year. Next slide, please. So moving on to our P&L performance, revenue reached a record high of 831.6 billion on a Q3 year-to-date basis. The expansion of global demand continued with the cardiac and vascular company and the blood and cell technologies company serving as the main drivers. Operating profit and adjusted operating profit also achieved growth exceeding that of revenue, reaching record highs of 144.9 billion yen and 173.5 billion yen respectively. While the tariff impact began to materialize partway through the second quarter and continued to affect results in the third quarter as anticipated, we were able to offset these impacts through ongoing pricing measures and disciplined cost control, resulting in progress that exceeded our performance forecast. On a standalone Q3 basis, the operating profit margin declined. This was mainly due to the recognition of one-time expenses in the second half of the year, as explained during our second quarter earnings announcement. Next slide, please. So this is the year-on-year OP variance analysis for Q3. I will explain the Q3 year-to-date results on the next page. However, there are two major movements to highlight for Q3. The first is the impact of tariffs. In this chart, the tariff impact is included within gross margin and pricing. And as a breakdown of the gross margin effect, the tariff impact amounted to a negative 4.2 billion yen. At the same time, pricing measures contributed a positive 3.5 billion yen, partially offsetting the negative impact from tariffs. The second point is the recognition of profit and loss from newly acquired businesses. The Leverkusen plant recorded a loss of 1.6 billion yen, while Organox contributed a profit of 0.5 billion yen. Regarding the Leverkusen plant, we will take a disciplined and cautious approach to capital expenditures for production line preparations and proceed step by step as the certainty of customer contracts increases. Next, this slide shows the quarter three year-to-date OP variance analysis. Overall revenue growth driven by the continued expansion of demand made a significant contribution. The GP increment by sales increase was driven primarily by overseas TIS, mainly in North America, as well as global blood decisions, particularly in the plasma business. With regard to the gross margin pricing measures in the cardiac and vascular company made a significant positive contribution to profit. However, as the impact of tariffs became more pronounced, this positive effect was partially offset. So while the negative effect from tariffs increased in quarter three, on a year-to-date basis, the positive effect from pricing more than offset the tariff impact. SG&As increased due to business expansion and remained largely unaligned with our insubstances. R&D expenses decreased slightly year on year. This was due not only to the impact of impairment losses on capitalised R&D recorded last year, but also to a review of R&D priorities and a disciplined focus on selecting themes. Going forward, we will continue to invest in priority areas. As for foreign exchange, the impact was negative both on a flow and stock basis compared with the previous year. I will now explain the performance by company. First, let me start with CNV, the cardiac and vascular company. Revenue increased 8% on a local currency basis with strong performance continuing globally, particularly in North America. By business segment, growth was driven by TIS and Teramo Neuro, contributing to revenue growth for the company overall. TIS was primarily driven by North America, with solid performance continuing across all product categories. Volume growth contributed more significantly than pricing measures. In Teramo Neuro, strong growth continued in both China and Japan. The profit margin improved to 26%, supported by various initiatives, including pricing measures, profitability improvement, and a review of unprofitable regions. However, due to negative impact from foreign exchange on a stock basis, the profit margin for Q3 on a three-month basis declined year-on-year. Next slide.

TMCS, Medical Care Solutions Company. The sales revenue contributed to the sales growth of PharmaCeutical and increased revenue for the entire company.

BlueLocations Pharmaceutical Solutions will draw both revenue and traffic growth for the company overall. as the strong performance of FreshX overseas. On the other hand, revenue declined in the hospital care solutions and life care solution businesses. In hospital care, revenue decreased due to the impact of a business transfer in Q1 of the previous year, as well as supply issue affecting the product. This supply issue has now been resolved, and the businesses on the recovery trend, in addition pricing measure implemented since April, are progressing steadily. With regards to profit, earnings increased supported by the efficiencies of pricing measure and disciplined cost control. Regarding the acquisition of the lubrication plant announcement in May last year, this has been included in our consolidated results starting from Q3. On this page, figures and presented impact to illustrate trades in the existing businesses. Performance, including the Leverkusen plant, is shown in the bottom right of the slide. As mentioned briefly in the profit variance analysis section, The P&L impact related to this acquisition in Q3 has no impact on revenue, while the impact on profit was negative 1.6 billion yen. We are currently working on production line startup and production transfer. Since the acquisition was announced, we have received a significant number of inquiries from companies overseas, particularly in Europe and the United States, and are actually promoting the business to secure new projects. Next slide, please. very significantly driven by strong growth in plasma innovations within global black solution as the rollout of the vika to existing consumers has already been completed our focus in the plasma businesses will shift toward acquiring new customers going forward in addition core Our core business constitutes us to perform well, supported by the successful award of a tender for the webinars for whole blood collection system in India. Revenue increased as demand for cell collection associated with cell and gene therapy expanded, particularly in North America. Profit increased to improve profitability resulting from expanded sales of Rika as well as ongoing discipline cost control. We have implemented production adjustment related to Rika from Q3. However, due to efficient operation in production lines, the impact has been smaller than initially anticipated. profit margin has improved. Looking ahead to the next year, production adjustment may be implemented as needed, but we expect the impact of QNL to limit it. Next slide. Following the completion of this acquisition as a wholly owned subsidiary on October 29, 2025, Oganox has been included in our consolidated results starting from this Q3 earnings announcement. Results from November and December are consolidated with Q3 revenue of 2.9 billion yen and adjusted operating profits of 0.5 billion yen. This illustrates the growth trend. We are also disclosing Q3 year-to-date performance on year-on-year basis. Revenue increased by 50% year-on-year, and the profit margin improved significantly from 13% to 21%. This was driven by increasing number of liver transplant procedures, as well as expansion of the organox consumer base. Looking ahead, the market for organ preservation using normal mouth and fist medicine perfusion, or NMP, is expected to continue expanding. Next slide, please. In the Americas, demand continues to expand, and we achieved double-digit growth on the companies delivered strong growth with TIS pharmaceutical solution and global blood solution serving as key drivers of leading global remedy growth. In Europe, TIS and Thermoneuro continued to deliver stable growth. In addition, strong performance solution business. In Japan, the CDMO business performed well with pharmaceutical solution contributing to revenue growth. With CNB, Terumo Neuro continued to achieve double-digit growth. In China, revenue increased as Terumo Neuro continued to grow, supported by expanded market access resulting from BVP. In Asia, strong performance of TIS or revenue full year outlook for the fiscal year is now coming into view. What I would like to reiterate is that our business, based on our existing operation, is steadily progressing toward the achievement of GS26 in the next fiscal year, supported by strength of our underlying fundamentals. In the current fiscal year, we are We recorded acquisition-related costs and other one-time expenses. The main item of one-time expenses that can be reasonably anticipated at this point are outlined on the page 18 of this presentation. These initiatives reflect our commitment to improving profitability as we work toward achieving GS26. And these structural reforms we believe are necessary. These measures include initiatives to optimize our workforce overseas, which are expected to result in annualized cost savings of approximately 3 billion yen from the next fiscal year. We position all of these costs as strategic investments aimed at supporting future growth. We continuously review our business portfolio and conduct strategy reviews to drive growth. While the business environment is constantly evolving, we will actively manage these changes to achieve final year of G26. That concludes my presentation. Thank you very much for your attention. We will be getting into Q&A. Please raise your Zoom virtual hand if you have any questions. If you want to cancel your question, you can again click on Zoom button for the raise hand button. but so we wanted to make sure we give more people to ask question please limit your question into two questions at any given time and otaka san will be joining from the head of the management as a part of the management team joined with the hagi agimoto from mizuho you will be the first person to ask

So, this is Kotani from Mizuho Shoken. Can you hear me okay? Yes. So, on page 18, you were talking about the amortization. It says $2.6 billion, and I think at the beginning of the period it was $4 billion. And if I look at the related costs in quarter three, I think you said these were supposed to amortize in the first part of the fiscal year. So that amount seems to have has been brought ahead to the fourth quarter for the amortization fees. And so it looks to me for next year, I think the goodwill for next year also taken into consideration. So I'm just looking as the evaluation of inventories changed and the goodwill costs seem to be looked over the long period, seem to be slightly down from what was originally planned but it seems to me that those costs seem to have swelled slightly cortes and thank you very much for your question so you as your understanding is correct this is pre-ppa and this we these were These amortization costs for the current fiscal year are 4 billion yen, and they had been shared provisionally, tentatively. But for the final amortization depreciation expenses, we used an external organization to reevaluate these, and the result of that external evaluation was that the we had previously expected them so they are below our initial expectations and it says at the bottom of here the inventory step up of inventories this was when we made the purchase the these were re-evaluated the costs were re-evaluated under the FRS rules, so the inventory period, they've been distributed across the inventory period, so there's no impact on cash flow, but on the PL, they have to be recorded on the, so they are 4 billion yen and 7 billion yen for next year. But, you know, for, they will not, however, be from, okay, thank you, so for these In these two years, these heat fees will occur, but after that there will be very lower goodwill fees. So it will be in the black in terms of amortization, yes. We had expected it to be 9 billion yen, but it was actually 65 billion yen in terms of those amortization fees that came with the purchase of Organox, but we expect that to be lower than previously predicted. And secondly, a final question, the I just wanted to ask about the Rika. The share of Rika, I think, probably will be about 50 billion yen of total revenues. And I think there are some supply chain issues. But if we look at this now, I think it will be about 30, 40 billion in terms of the portion of revenue. So is this the... The effect of deploying Rika later has had some effect, I think. So could you give me this 50 billion yen that you had previously predicted for Rika? Why is that late? Why is that late to come online? So also, I think Mayumi, a computer product, is also late in deployment. So could you just let me know on that front? Thank you. So for RICA, the revenues for RICA, we haven't disclosed those at present. But when it comes to the, there was some late deployment, there wasn't any late deployment of RICA. So as I explained last time, it has been extremely efficiently utilized. And so it's lower than our initial assumption for the portion of net sales. but there is no delay in the deployment of Ricoh, and we are currently improving the product and deploying promotions to increase customer inquiries. acquire customer take up so I there's nothing particular to add regarding recap but it is proceeding on plan steadily so the comparatively it is it is not a particularly large-scale customer in question that where we are expanding our promotions and so we are looking forward to further developments in and So this is one pillar of our growth pillars, one of our main growth pillars, and the development is proceeding as planned. Thank you very much. Thank you very much.

The next question will be Tokumoto-san from SMBC Nikko Securities. Yes, this is Tokumoto speaking. I hope you can hear me. Yes, we do. okay thank you my first question goes back to slide 12 about your projection beyond the on and beyond next financial year and there are some you are also reducing some cost you know also saving some labor costs for funeral costs But can you just once again share any project that you are planning to implement for the next financial year? I mean, passing the prices over to customers. You talked about that will be implemented, but inflation is not going away. I think, again, can you talk about is this becoming more difficult? You also talk about profit improvements overseas, but can you share any other projects locally or in any of these that you can share? Well, thank you very much for your question. Let me pick up your question about price point and our programs overseas. And my colleague, Hagimoto-san, COO, may jump in if necessary, but let me just start off. First on pricing points, we are just passing the prices based on the inflation, based on our terms in agreements. and we will continue to do that as we've been doing already and go beyond next financial year we are also getting some impact from customs and we are actually putting surcharge as the types of the impact of the other tariffs so we will continue to work on those price initiatives beyond next financial year and you also asked me about out the restructuring in overseas. We have in Q4 P18, slide 18, as it shows on the QA, we are planning to have one billion yen in one-time cost for project reduction of the people. This is one-time cost in FY26, and we are expecting the positive impact to continue beyond FY26. Well, let me just add one comment. We, within FI25, we are running several different projects, and we also have some positive impacts from pricing initiatives. We, of course, are managing that. disclose any specific numbers but market is going inflation and we are increasing prices based on if not higher than inflation so we will be passing our prices because we are building added values As a company, we are just looking at having more values added so that we can increase the prices faster than the inflation. We'll continue to do that. And on the other hand, there are kind of reduction of negatives, like restructuring projects. These are the initiatives that we are running for this year, as well as last year, as one-time costs. But our programs In FI26, the very final year of G26, we are making sure there's not going to be negative ripple effects at the end of the year in FI25 and 26. So all those negatives that we need to deal with, we need to consume, including the one-time negative cost, we wanted to have them just done it and done it all. Okay, thank you. I just want to clarify about restructuring 5 billion in overseas. And this is some number that we didn't see in Q4, but you just added as you have made a decision to implement? Well, we've been talking all through about necessity to go through the restructuring, but we have more precise numbers, so we decided to post it here. Okay, understood. So I think Germany, Reisenbach, you also mentioned about that. But can you just share about what kind of approaches you are getting? There's going to be some time before the production lines go up running. But after negotiation, what would be the timing in which you will start to recognize revenue from that plan? I think that's One of the assessment points for assessing value for your stock, so can you talk a little more about the recognition of the bank plans? Well, we do have signed an NDA with them. We are discussing with multiple different potential customers. For PS business, as you can see on this slide, in this financial year, we are just at mid-two-digit growth. This growth is substantially very good. And we are getting good repetition for stable supply, reliability. And for revenue, is that going to be profitable? We would like to share those perspectives and deliver those targets in the next mid-term plans. Okay, understood. Thank you very much. That is all.

Next, City Group Yamaguchi-san, please, from City Group Shoken, City Group Securities. Yes, can you hear me? This is Yamaguchi from Citigroup. Well, for quarter three, we look at quarter three alone, the first profit ratio seems slightly down, but the product mix, is there, is the tariffs the biggest impact on this, on the product mix? Yes. So on the right-hand side, are you referring to our gross profit. Well, organox, the purchase of organox. has also had an impact but the weakening yen in quarter three has also had an impact as well so the it's one this is affected the gross profit rate by one point i believe but the tariffs i think these three impacts have uh been impacting the gross profit rate ratio also sorry the CFO was just talking about these one-off costs So for next, it says organox. You've already explained that. But apart from other impacts for these one-off costs, these In next year, do you think there will be any other significant one-off costs or one-off losses? Yes, I think your understanding is largely correct. Of course, including the balance sheet, having made all the necessary investments, we believe that this is what we can expect to harvest. um but we do want to improve profitability initiatives for improving profitability will be implemented in this period so for 26 financial 26 as the final year of gs26 we hope to end in a clean manner that's all from me thank you and the next question is the yoshihara san from ubs securities

I'm Ms.

Yoshihara from UBS Securities. Thank you. Well, thank you. I do want to ask a question about Rika. In the second half, you were planning to do production adjustment, but the impact was not that big, if I understood correctly. But your customers, if we are hearing this, your customers' comments, market was solid. It seems like you are also getting some headwinds, and production also, you know, you mentioned about production may be adjusted next year, but I know this will be very difficult for you to make a comment about your customer, but can you share a little more details about this Rika business and how you see it's going to go? And also, you talked about accretion of new customers, and when this business has just started, you were looking into potentially very big customers who are not your customer back then, but you also talked about having approaches, approaching to small to mid-sized customers. Have something got changed in terms of the other target customer base? Can you talk about that, please? Well, thank you very much for your question. So CSL or any other competitors may make some comments, but we will make any comments about what's represented by the competitors. But we are just competing, making some progress, so we can compete with CSL. And in next financial year, we are expecting DC. shrinking revenue from innovation. So we are expecting very stable revenue source. And your question about expansions of customer base, I'm sorry, maybe this was not clear to you in our explanations. But our approach to big potential customers, nothing has changed. So it will be incremental on top of it to expand our opportunities working with small to medium-sized customers as well, on top. Well, thank you very much. My second question is not directly related maybe to your financial performances, but your fundamental, I think, is quite doing well. But you are also having some challenging time over the last one year. Can you share examples, of course, be having within the top management team. If there's none, that's also fine. But are you also looking into, because there could be an option for you to buy back some of your shares back. Can you just talk about that as an option? Thank you for your question. I will refrain from any comment about share buyback in this meeting. But we are not happy with the stock price today. That's how we see it also. And how can we, including organics, right, or So we wanted to send the message that people will hopefully be understanding that we are making investment for the better future. So we will continue to run those programs in the future as well. And we, the share prices are decided with many different factors. There is no single answer. no solution, one bullet to increase the share prices. But I think we can maybe send our message more clearly, loudly, so that we get to have a chance to explain why and what we are doing. And so this is actually a big topic within our top management meeting because we are, you know, we will be performing well. We will be hitting the target in the GS26, but we'll also need to do a good job communicating with the people in the marketplace. Okay, thank you very much.

Next, Morgan Stanley, MUFG Securities, Hayashi-san, please. Hello, this is Morgan Turnley, Hayashi. Can you hear me okay? Yes, we can hear you fine. Thank you very much. So my first question is regarding TBCT. And I believe that from your data, I have calculated that in the third quarter, the net sales, apart from FX impact, are about 20%. up in terms of revenues. And I think with the RICA production adjustment, with that in mind, in quarter three, that has been taken into account. But your production lines, is what I'm talking about, are able to absorb that negative impact or able to manage that negative impact, you were saying. So I just would like to hear some more details about that, what kind of response, what kind of effect that's had on How are you going to absorb that drop in? I think that you have already taken into account the production adjustments, but the Leverkusen plant, I think revenues could go up, possibly. Could you give me some colour on that, please? First of all, so thanks in terms of net sales versus revenues, first of all. The rica has contributed significantly to the increase in revenues, but for the other elements, for other products, those are also having favorable sales. Particularly in Asia, we have secured a tender in Asia which has contributed greatly to increased profits, increased revenues, and the effect of those increased revenues and the production adjustment in terms of yield and improving production, yield and production, I think will bear out positively in operating profit from now. But I think in November, in your explanation in November, you were saying that the quality was too high and there were On the business side, you were talking more about the business side. I feel there's a bit of a disparity with what you explained in November. In November, what were you predicting? And this time now, why is the minus lower? Is it to do with... Yes, so let me add into that. So regarding the... You're referring to the consumables for the Eureka business. Well, the net sales and the forecasts, if those come down, then the inventory level, I think, we don't need to create that beyond need. So we... would do some production adjustment. However, of course, for the actual distribution of the accumulation of inventories, that does bring down profits. But in terms of activities to increase productivity, then the production cost, if we're able to bring that down, so that's why we didn't have such a big minus in our revenues this time, that would be the Right, so the net sales for Ricca has gone to plan, but the margin, any negative impact on the margin has been brought down to a minimum, is that correct? Yes, well, what fluctuates is the, if we look at the PSI, then to keep the stock at a certain level, we have adjusted production. So overall, the structural impact is, has been absorbed as offset by our higher production efficiency and production adjustment thank you understood okay my second question is to do with organox and i think there are three companies involved in organox the in the third quarter then the 2.9 billion sales that is is that in line with your initial uh predictions forecasts i think for the full year nine billion years what you were predicting and in quarter four i i think that has I think are you on target in terms of the pace for Organox's results? Yes, well, thank you. In November and December, those two months have passed. Compared to the previous year, it is a very high level of growth on a year-on-year basis. But in what we were initially expecting, in quarter three, we have gone perhaps beyond that slightly. Sorry, it's gone down compared to our prediction due to a slowdown in donors, available donors. But the demand remains extremely strong for organox. So I think the growth trend is on target. And it was a slight depression in quarter three due to a lack of donors. So in quarter four, it'll go back to the original trajectory. Is that what you're expecting? Yes, that is our prediction. It will return to the expected trajectory for quarter four.

Thank you.

And the next question is Tony Lan from Macaulay.

Hi, can you guys hear me? Yes, we can hear you, Bill. Okay, perfect. Yeah, so my question is also about the organics on slide number 10. So, you know, based on the data on this slide, I calculated that the revenue increased about 46%, but the adjusted operating profit increased 10%. about 136%, so more than doubled. Did you do any cost improvement over there? Did you try to reduce any cost in manufacturing, you know, SG&A or R&D-related expenses there?

Thank you very much for your question. So this is a result of their sort of Organox organic growth. So we did not do any specific approaches at this point in time. This was all activities that was already planned by Organox prior to our acquisition. So what we do believe is that, as we mentioned earlier, Organox's business structure is a very highly profitable structure. And as the revenue grows, there is room for profit improvement. What we want to also materialize is that the overall capabilities that Teremo as a group has, by combining those kind of skill sets or the manufacturing capabilities of Organox, some of the technologies that we have with Teremo, we do hope that we can also accelerate this kind of growth in the profitability.

Okay, so it is a matter of growing the revenue base and therefore able to cover the fixed cost.

Yes, exactly.

Okay, perfect. Yeah, my second one, very quickly, just want to go back to the CSL, your customer CSL situation, right? I mean, obviously, we know that they had a lot of changes this week. Are you foreseeing any future impact because of the changes at your largest blood plasma customer in the U.S.? ?

So obviously we cannot comment on CSL's specific situation, but from our point of view, we do believe that the demand for RICA and the disposables, that's sort of our revenue stream, is not significantly impacted. So our understanding is that we will continue to provide the RICA disposables to CSL. There may be some discussions about the volume in the future, but at this point in time, we do not see significant changes in our projections.

Okay. Very well. Thank you very much.

So next, Nomura Shoken. Morisawa, please. Morisawa-san. This is Mori from Nomura Securities. Can you hear me? Thank you very much. Well, there are two questions I'd like to confirm. First is regarding the Rika. So the profitability of this compared and the growth trajectory, I would like to know whether that will change or not. But So, this is regarding the, there is no change to our projections, and our initial Calatka projections have not been changed for Ricca's growth trajectory. Secondly, in your explanation, you talked about achieving GS26. You made several references to that, but what items need to be achieved for GS26 to be achieved? What are the criteria for achievement in order to fulfill GS26? Thank you very much for the question. So we have our financial objectives, three financial objectives. These are since These were announced in December 2021, which would get, you know, double-digit growth for revenues in the late top, you know, double digits. Secondly would be the profitability rate, 20% of operating revenues. uh profit ratio of of which and the third is rowing 10 rowing um that is the excluding the impact of m a but i think for roic of 10 we want to achieve that as another key pillar And so it's not that if one of those is okay, all three of these financial objectives needs to be achieved for us to deem that GS26 has been achieved. Right, so within segments and the profits within each separate segment, if you want to, GS26 needs to be achieved across segments, is that correct? Yes, depending on the business segment, then there are some variations, but we have all company financial targets as overall which need to be achieved for us to declare GS26 to be achieved.

And next question goes to Saito-san from JP Morgan Securities.

I'm sorry about that.

My name is Saito from JP Morgan Securities. I hope you can hear me okay. Yes, I do. Okay, thank you. Sorry about that. So just wanted to talk about the slide you analyzed, the operating profit ups and downs. I wanted to ask some detailed questions on the price and the expected price revenue. You talked about custom tariffs and prices in details. But the other things, the other include the impact from inflation that you discussed back in Q2. You talked about some COGS impact, negative impact because of inflation. So I would say majority of the impact was coming from M&A transaction. Just wanted to see if there were all those details included in this analysis. Well, thank you for the question. Depreciation, COGS from depreciation on M&A is adjusted values. So that's 591 and 439 actually includes M&A adjustments. So that's not counted in that 103, which is about the impact from revenue increase. Revenue increase is also getting impact on tariffs, inflation, product mix, all income passed within that 103. Okay, thank you. You also mentioned about product mix. Is there any specific business that you saw quite a big change in product mix? Especially for life care and pharmaceutical solutions, the factories are, you know, using Japanese factories. Are the margin structures changed or not changed? Can you just add a little more comment about those? On your question about life care, there is not much of a big change on profitability structure. For pharmaceutical, the revenue is growing, and as it goes up, we can just absorb fixed costs as a leverage. So that would be the part in which we are seeing the positive impact. Well, the other, this might be way too much in details, but on the plasma business is expected to grow. Then the revenue, if you look at 103, the impact will count on driving that 103 up higher. So if you look at the business structure as a whole, you know, that makes the impact will be negative. So there's that kind of structural details. Okay, thank you very much. That is all from me. Thank you.

So we will end Q&A there as that is the end of the allotted time.

That marks the end of today's presentation. Thank you very much for your participation. Here we close the event.