Trend Micro Incorporated

Thank you, I hope you can see the screen Usually, in my presentation, I will start with the first for the quarterly summary, but this time it's a little bit different. There are two important pieces of information that I'd like to share with you to begin with. The news release has been already provided, and I just wanted to summarize the content of those news releases. starting with the shareholder returns or FY23 end of year dividend and FY24 share buyback targets is the first item. Now, we have been trying to optimized the level of cash that we own. And we went through various different approaches for calculation. There are different opinions. And on the balance sheet, we have certain regulatory restrictions. And based on that, we try to figure out what is the maximum amount that we can return, which is 140 billion yen. And we have decided to return this as shareholders as soon as possible. And as you can see at the bottom of the slide, this is a combination between regular and one-time dividend. And we want to deliver 100 billion yen. and then 40 billion yen in share buyback. Of course, we still have the fourth quarter to go, which means that in the end, at the end of December, we have to look at the balance sheet and calculate these numbers, which means that these numbers are still subject to potential change. Please kindly understand. Another item that I would like to share with you, this is the policy for shareholder return going forward. So this time around, we're talking about a relatively large sum of money, but we still have a lot of cash on hand, which means that going forward, the net profit or net income that a company makes should be returned to the shareholders 100%. share buyback or dividend and the 70% payout ratio will be maintained but the balance sheet structure will be changing quite a lot so there will be some restrictions but still we will attempt to return the total net income and still we will have plenty of cash left which means that we can make further business investments and if there are good opportunities we may consider M&A and also we will consider other possibilities of further enhancing the capital efficiency. I'm sure that there are many questions related to these two points and what I would like to ask you is to Join us on the IRL Day on the 1st of December and ask those questions that you may have. Because today we want to focus on the earnings announcement for the third quarter. So we want to talk about the business performance and the businesses and receive those questions today. And Kevin will be appearing on video, but he's also participating in Q&A. I think it's 2 a.m. in the morning. for him, but he will be answering any questions you may have today. Now, with that, we would like to start with a summary of the third quarter. As you can see, net sales 13% up and operating income up by 58%.

This is something that was pointed out by our analysts.

How is the management going? Well, starting from this fiscal year, we have been controlling things quite tightly, but it will take some time to see the outcome. And net income, why minus 93%? Well, I will explain that in the next slide, but in the pre-gap is growing 13% on yen basis and 63% growth and basically 9% growth without the forex impact. Net sales and ordinary income, this was actually record high. So why did we lower the net income? Well, in order to pay out dividend, we basically brought over, we're bringing over all the profits that we're making overseas. And this means once the subsidiaries overseas transfer this amount to the parent company in Japan, we have to pay a certain amount of tax. That's basically 8.1 billion yen. And this has to be incurred in the third quarter. And this is why we are seeing a temporary decline in net income. But without that, we would have had 9 billion yen in net income. And this is minus 33% still. You may remember last year in the third quarter, We sold off a subsidiary and we had a gain from that. So in the absence of that, it looks as if it is lower, but actually with this adjustment, it is about the same level as the ordinary income. And then we will look at net sales by region and without the FX impact. As you can see across the board, we are seeing positive growth.