It is now the time to start, so we would like to start. My name is Kobayashi from the Corporate Communication Department. I will serve as the moderator. Thank you very much for attending today's investors' meeting for the current priority management issues and business strategy, despite your busy schedules. Today, from our President, Mito, there will be an explanation given, followed by a Q&A. We plan to end this meeting at 4:00 P.M. President Mito, please go ahead. Once again, thank you very much for attending our investors' meeting for the current priority management issues and business strategy, despite your busy schedule. Since I assumed the position of the President, it is my first meeting for the current priority management issues and business strategy, so I'd like to give you a thorough explanation. As Kobayashi mentioned, right now, we have set aside time for a Q&A, so I would like you to feel free to ask any questions. Please move on to the next slide. This slide is showing today's agenda regarding the progress on the corporate business plan. At the first part, I have explained about the upgrade business portfolio with new growth strategies. There are two factors in here. One is something that I have been talking about: the winning business rooted in our organic synthesis technology. How are we going to grow that? The other is cultivating new growth businesses. More specifically speaking, it will be the regenerative medicine and cell therapy. We still have challenges that we have to overcome, by responding to those issues, we're going to build a greater resilience. Lastly, this is another issue that we need to tackle, which is improvement of the financial and capital efficiency. I would like to explain about this as well. Next page, please. This slide is showing the content that I would like to convey to you as key points. Since I have become the CEO, it's been six months. Until now, in order to realize the businesses where we can win, we have been saying that we want to work on strengthening the employee engagement. What I will be sharing with you today, I would like to allocate plenty of time to explain to you the focus on businesses where we can win. Specifically speaking, the businesses where we can win are utilizing our strength in organic synthesis technology, and we would like to strengthen our ability, as well as upgrade our business. Also, Petro Rabigh, and as we have announced recently, the business integration with Prime Polymer, the P&P business reorganization, is steadily progressing, so I would like to touch upon that as well. The other structural reform challenge, which is Sumitomo Pharma, especially at the small molecule area, recently, the three key products: sales expansion and the two oncology drugs development, is progressing. However, on the other hand, in the medium to long-term direction, what are we going to do about the small molecule drug business? The direction of this, at this point, it's not that something solid has been decided. However, I would like to organize the content and convey that to you. Also, Sumitomo Pharma, or our pharmaceutical business, regarding the regenerative medicine and cell therapy business, this positioning is different from the small molecule business. This is going to be one of the group's growth businesses, and we would like to develop it in that way. Our pharmaceutical business, we would like to separate the small molecule business and the regenerative medicine and cell therapy business when I give you the explanation. We would like to thoroughly put efforts to redouble efforts towards growth-oriented management. I would like to explain about strengthening the investment management process. Next, please. This may be repetitive. However, this slide is showing what I would like to achieve and aim for as a CEO. The first is thoroughly play where we can win. Conventionally, there are cases where we have attempted in various businesses. However, recently, the resources for investment are limited. In a thorough manner, we would like to focus on where we can win and where we have a strength, so that we will be able to return to the growth trajectory. The engine for that is going to be the engagement of our employees. We would like to strengthen that. This is going to be the objective as the CEO. Next slide, please. Actually, what is supporting our businesses, or what is supporting our company's businesses? The majority of them is based on the organic synthesis technology. For example, for the crop protection products, chemicals are based on that, and also the counting liquid crystals, and also photoresist of semiconductors as well, and P&P business-related catalysts, and also CDMO business for pharmaceuticals. We are using advanced small molecule APIs and the oligonucleotide. This is also based on our organic synthesis technology as well. The technology that we have a strength on, having that as a basis, and the businesses who have that as a basis, in a medium-term perspective, the core operating income of ¥200 billion, ROE, ROIC 8%, 6%, respectively, and D/E ratio, we would like to bring it down to 0.8 times. We would like to go back to the growth trajectory and show the future path for us. That is the objective of the medium term for us. Next slide, please. Over here, once again, I would like to explain about our winning path, or where we can win. If you look at this slide, if we look at the exit of our businesses, we are working on various types of businesses. We have growth solutions businesses, semiconductors, and we have pharmaceuticals, as well as P&P businesses. If we just look at the exit area, we have a variety of distribution businesses, and there are some criticisms that we have a conglomerate discount. However, as I have explained before, it is based on organic synthesis technology. All of our businesses are based on that. Therefore, us fine-tuning and brushing up the organic synthesis technology and conducting these businesses has a consistency, and we don't think we have a discount because of that at all. Next page, please. Winning businesses rooted in organic synthesis technology. Regarding this, I would like to explain each one of them from now. First is the winning in agro and life solutions. What you see on this slide is something that I have touched upon in the past several times. In the past, from 2020 to 2024, within the five years, globally, there are 33 new crop protection products API, and out of that, five are developed by our company. Our R&D expenses seem to move while compared to them, the major players, we're one-third. In the last five years, we have been developing the largest number of products. Each one of them is not small scale, but as you can see, Indiflin, Rapidacil, and Pavechto, we have three of them. Our drug discovery capability in terms of the crop protection products, we are no less than the major players globally. Regarding these three products, I would like to give you an explanation. Regarding Pavechto, in Europe, it's a product developed for wheat. In Europe, in the last several years, there is no registration that is allowed for the chemical crop protection products. We have confidence in the safety of Pavechto. However, we are struggling for the approval of that in Europe, and that is a fact. On the other hand, this product is evaluated in the largest agricultural market, which is Brazil. Recently, the target spot, which is the crop-damaging disease, and this product is quite effective towards that. In the late 2020s in Brazil, and also up to now, by then we were expecting the registration in Europe. This Pavechto, newly, we have expectations that it is going to grow into a blockbuster. For Indiflin and Rapidacil, I would like to explain them individually using a different slide. Next, please. First of all, regarding Indiflin, already, in terms of the sales, it is getting close to ¥30 billion. It has grown to that level. As you can see on the left-hand side chart, it's not necessarily the fact that we have a full lineup of this product. What I mean by that, I'm talking about the mixture product. Towards 2030, the lineup of the products, we would like to enhance that, and through that, we would like to further increase the current sales. On the right-hand side, here we talk about how we want to expand geography, crops, and applications. At this moment, we're looking at Brazil soybean as a view. This is supposed to be a blockbuster product. Other than soybean for Brazil, in Japan and the U.S., we're trying to look into specialty crops, like fruits. We're trying to obtain applications to these. Depending on crops, we already do have top share. There are regions where we have very good shares and revenue. Last year in India, but this year in India, and also in last year, we have also been able to obtain registration in Australia. We do want to make sure we'd be able to expand the revenue of Indiflin. Together with more product, we hoped we'd be able to double our revenue by 2030. Next page, please. Next is Rapidacil. Globally, Glyphosate Roundup is the top-selling product. Glyphosate, it works as a herbicide for any green plants. It doesn't mean usually, it doesn't mean a specific product would only be able to work to some specific plants and weeds. That is why you need to make sure you'd be able to mix several products. Glyphosate, it does have very good efficacy. It does also damage crops. At the beginning of this development, we used this at the roadside and somewhere close to rail tracks. As you can see, at this moment, we have this no-till farming, and that is where Roundup would be able to increase revenue. In other words, this is a place where you have no crops. It's only the weed that you have to kill. It is really used before planting, in other words, pre-plant burndown. This is exactly where glyphosate had been able to increase. Roundup was able to increase its revenue. After that, there had been some opportunities in no-till farming. What about, is there any possibility where we'd be able to use the glyphosate gene so that it would be applicable to also some specific crops? That is where we have been able to obtain a product that would be able to be used in other crops. Roundup is now able to, so we already do have glyphosate, which is the generics, but this is now the top-selling type of the product. Now, in this market, Rapidacil, just like glyphosate, works to various plants. It is a non-selective herbicide. At the same time, it exhibits efficacy in low doses, one-thirtieth of glyphosate. That means there is low impact to the environment. Glyphosate is used globally. Therefore, at the same time, there have been various problems identified. In other words, you find weeds that would be resistant to this Roundup. Rapidacil would be able to show efficacy in these types of weeds as well. Therefore, we're going to follow where glyphosate had been selling with Rapidacil. In 2024, we have been able to obtain registration in Argentina. In the U.S., we're hoping to be able to do this in 2026. Perhaps this is a conservative view. Perhaps during FY2025, we might be able to obtain registration within the U.S. What follows would be Brazil. In other words, we know that the U.S. and Brazil are going to be the main market when it comes to these types of soybeans and corn crops. We expect that this is going to be a product that would be able to obtain several billion in revenue. I mentioned that there are weeds that would be resistant to Roundup, but at this moment, we're trying to go through some research. There are crops that would be able to stand to Rapidacil. There would be resistant weeds to Roundup. From 2030 and onwards, we're trying to see if this new research would be able to be utilized. In other words, during pre-plant burndown, or perhaps it then could be used for over-the-top. If we'd be able to generate revenue through this over-the-top scheme, I'm sure this is going to enable us to see further opportunities for revenue increase. Next is about BioRational. We had been trying to find a winning business rooted in organic synthesis technology. You may think BioRational is not exactly about organic synthesis technology. With that said, I will still say it does have a link to organic synthesis technology. BioRational can exist in nature. BioRational, the development, this is an area where our organic synthesis technology could be put to use. Oftentimes, fermentation is the type of technology that would be used, but downstream technology would be very similar to the chemical process. Also, BioRational can exist in nature. However, it is a product that cannot be fermented. In other words, chemical synthesis could be the only way to develop a specific BioRational product. For example, we had Axeed. It was a product for plant PGR and amino acids. This is a product that could not be made through fermentation procedure. We had been able to provide the first PGR using this amino acid, carbonic acid. Within the BioRational, our technology is being put to use. Brand capability from the perspective of market share, we are leading the market, but we do want to make sure we'd be able to accelerate the performance. To do that, it is going to be important that we win in the Brazil market, which is the largest in the world. We already do have $100 million worth of revenue, but we do want to make sure we'd be able to expand our footprint into crops such as soybean. There's also biostimulant. This is the missing piece. Through the acquisition of AP Science, we are expecting to be able to go into this area as well. At this moment, we already do have more than 40 projects that are going on. Within the botanical, we have Pelletrine. We have outstanding share here, but anything other than Pelletrine, this is also something that we're trying to accelerate the development in terms of the botanical portfolio. At this moment, BioRational, we have a revenue of ¥70 billion, but we do want to make sure we'd be able to double this by 2030. Next, this is about ICT and mobility solutions. In this field, our organic synthesis technology is put to good use. When it comes to semiconductor materials, there will be photoresist. ARF emergent and also EUV resist are the areas where we have very high share. One topic that I'd be able to introduce, especially we have high share in ARF emergent, but in creating a specific pattern, there is this negative type development that is preferred. However, there will be organic treatment required for the development, which means there could be higher costs associated. We are now able to provide a photoresist that could be used for alkaline development. By utilizing this nature, we do expect to increase our share. Also, for the EUV area, this is an area where it is getting more advanced. Within the high photoresist areas, we know there's more miniaturization happening at this moment. In the molecular, you need to make sure we'd be able to provide resist materials at molecular size to support this miniaturization of semiconductors. These resist recently, we have metal resist. There is a high attention to metal resist. However, there is this good affinity with the existing process. For example, if you wanted to become metal-free, or even from the cost perspective, this organic photoresist is becoming favored. Within this photoresist area and a volume base, we're aiming for a 20% market share. Next slide, please. Regarding the high-purity chemicals, this area with the upfront investments, we established the supply structure as the first ones to do so. We are establishing the global procurement structure. In the U.S., the foundry makers are entering that market, and it's becoming one of the largest sites of semiconductor manufacturing. From China, the front-end process is going to be started in India. Through this, we would like to strengthen our platform as well. Recently, in Texas, our own company's manufacturing plant is going to be constructed. The prototype has already started. We are aiming for the mass production starting this fiscal year. Aside from the Texas site in the U.S., we believe that it is going to become one of the major sites for semiconductors. We are considering the further enhancement. Regarding India, the one benefit we have is that the crop protection products, manufacturing, and selling, we have Sumika, which is a very strong manufacturing company. For the semiconductor side, it is reported that it is going to start in Gujarat. Our company in Gujarat, Babnat Art, we have a manufacturing site as well. In India, having the manufacturing and selling company there is going to become one of our strong benefits for us to be rolling out this high-purity chemicals business there moving forward. Next will be display materials, OLED polarizing film. This is using our organic synthesis technology, which is the liquid crystal compound. Also, from compound to film, we have integrated from design to production technology. Utilizing this, we are holding a number one position. As for OLED, other than the application to smartphones, they're applied in tablets and notes. It is a medium-sized display. It's the area that is rapidly being applied. This is a medium-sized area utilizing our proprietary unique technology. Within the OLED polarizing film, we would like to still hold the number one position. As for automotive polarizers, we are seeing quite a high growth rate. On the other hand, for the automotive applications, high durability polarizers are necessary, or the wider view angles need to be met. There are quite the strict requirements. At a high-end pricing range, we don't have that much of a high market share. Responding to this manufacturing request, we would like to expand our high-end priced market share as well. Also, foldable display. Recently, panels that are not using the polarizing film, we are seeing an increase of those. Of course, in that case, our OLED polarizing film cannot be used. On the other hand, the color resist. Regarding that, we have an experience of a long-term R&D. This foldable, this is a COE technology that does not use polarizing film. The resist that is used for COE, the sealant, or for the organic materials, the heat stress can be avoided. From that sense, the low-temperature process or low-temperature rigid color resist is asked for. We have a color resist that will meet that low-temperature requirement. COE that does not use the polarizing film in that area as well, we would like to show our presence there surely as well. Next is the advanced medical solutions. CDMO for the medical area for in-modality, this is showing the target for our CDMO, this middle part, the antibody truck. We are not going to enter this area. That decision has been already made. This area is made using fermentation technology for crop protection products. We do have experience for fermentation. For antibody, it does use the animal antibodies. It requires several hundred billion yen of investment. We're not going to enter this area. The small molecules area and the nucleotide area that can be used for gene therapy are the areas that we will be entering. Regarding the CDMO, utilizing small molecules, the small molecules APIs as a modality, there's some way of looking at it. It's a legacy, but I personally don't think that is necessarily the case. One thing is that for the small molecule APIs, the market itself still has more than half of the gigantic medical or pharmaceutical market. Although the growth is gradual, it is still continuing to grow even now. As shown on the left-hand side, the small molecule APIs are being advanced more and more. The conventional is 300 and 400 compounds, but that is becoming more complex, and the precision is increasing. For the molecule itself, it exceeds 1,000 of small molecule APIs are being developed. The technology itself is not inhibiting the protein only, but it will actually guide the protein discarding, which is Protec. The technology ADC is also entering, and it is advancing. Within this advancing technology area, we would like to use our small molecule technology and grow this business as well. Another strength that we have is something that's already depreciated in Okayama, Gifu. We have a strong site in an oil as a plant. We have three sites, so stabilizing the supply. Regarding the compost requirement from the customers, we are able to respond to that. We do have those capabilities, and we would like to utilize these capabilities to further grow this business. Next is the guide RNA, which is used for gene therapy. This guide RNA for gene editing can cut and edit the genome, and it will guide the process. The size is far smaller than messenger RNA. Guide RNA, how it's made, is through chemical synthesis. It's not rewriting the genome, but it's suppressing the genome expression. The monomer usually is a 20 to 30 linked, which is the nuclei drug is 20 or 30 connected. A guide RNA has about 100 to 150 linked. Creating nucleic acid through that or making RNA is very difficult. Making it pure is very difficult. For us, from 100 to 150 nucleic acids with a high purity, we have a special monomer technology to realize it. Using this technology, currently, the startup companies are the mainstream in terms of the gene therapy drugs. We would like to enter that area. When it comes to the commercial production, we would like to rapidly increase the business. With our technology and with collaboration with a startup, we believe that that can be useful for developing new drugs. Our customers, a majority, have their sites in the United States. Recently, we have established a supporting site in the United States for this business. Therefore, moving forward, major players are starting to enter this area. Towards the startups and the major players, we would like to promote and appeal our technology is why we're thinking. Next, please. Next is essential ingredient materials. In this field, it's the Chinese players that we'd have to go through a very tough competition. Developing your product on your own, paying your CapEx, and fight, that is becoming even more difficult nowadays. On the other hand, in the past, we licensed out our technology to another company, and the catalyst could be then offered. We have been able to expand our footprint that way. Again, we'd be able to use our organic synthesis technology in coming up with a new process. Target would be next-generation type of technology that would be low impact to the environment. By developing this technology, it may not be a project that we'd have to pay capital expenditure, but we might be able to license out. We might be able to provide a catalyst in expanding our own footprint. For example, KBR and Lummus, we're partnering with these companies so that we'd be able to put some license agreement. We have not been able to exactly commercialize, but we still are trying to do some feasibility tests with the partners. We're hoping that we'd be able to, we would hope to be able to create some transaction through this initiative. Next, I'd like to talk about developing some new business portfolio. In the past, we had been focusing on chemical synthesis and trying to expand our business. However, when we speak of the new field, it may not always be about utilizing organic synthesis technology. For example, in terms of the regenerative medicine cell therapy, we do believe this is another winning story for us. It's almost 20 years ago, or around in 2003, when we started to study regenerative medicine or cell therapy for safety reasons. It was not that we started to work on something totally new. It was to make sure that we'd be able to address the safety of what we provide. It was really an extension of what we had been researching. We had been thinking whether or not this technology could be used for medicine or cell therapy. This is something that we went to iPS cells or neuroregeneration research. When iPS cells were developed in Kyoto University, we were also able to brush up this technology. Therefore, we now have a presence enough to lead this field. It does not use our organic synthesis technology. However, we do have a technology that has a great presence in the world in this area. Regenerative medicine or cell therapy that would be using this technology, we know that it has a high barrier for new entrants later on and generative products. We protect this technology through patent groups, and that is why we have this very high entry barrier. There is a tremendous amount of knowledge required to do this regenerative medicine. Compared to generic, there is quite a limited amount of capital expenditure required. Of course, there will be this specific patent cliff that you'd have to face. Whenever that happens, you'd have to put in a lot of investment when it's about small molecule drug business. Regenerative medicine business would be quite different. I even would believe this could be one answer to how Sumitomo Pharma, our business, would be able to find a growth passage, the winning business. That is why we do want to see what more we'd be able to do. Next page. In order to make sure we'd be able to spearhead this business, Sumitomo Pharma and us, for example, if it is about drug discovery, we have created Rakdera based on iPS cell. We're trying to see, for example, Parkinson's disease treatment therapy drug. In August, we have been able to obtain the pre-approval, and we hope to be able to obtain a final approval so that by 2030, it would be able to grow into a blockbuster after this obtaining approval. For CDMO, we also have high expectations to our CDMO business. There are many companies who would come into this field, but what is different from us? We actually do have a very strong basis for this medical business. By utilizing what technology we have, we have already been able to have a surplus for four years in a row, while other peers would have quite difficulty in trying to create a profit. We know there are various inquiries here. In order to respond to the growing need, it's not just about completing our third plan for this. We are now starting to build our fourth plan. The investment here is just ¥15 billion. Compared to antibody products, we know that this investment is quite small. We are leveraging METI subsidies to further limit the amount of investment required as we try to develop this business. Next, I'd like to move on to speaking about our structural reform. First of all, about Petro Rabigh. In August 2024, we announced a financial improvement plan. A total $1,500 million amount of loans have been written off. This is mitigating Petro Rabigh's interest burden. We have completed sales of 22.5% of our stake to Aramco. Including the proceeds from this, a total of $1,404 million is expected to be contributed to PRC, which again would further mitigate Petro Rabigh's interest burden. It did take some time, but at the end of this month, once we'd be able to obtain the approval from the shareholders at the end of this month, we should be able to complete this transaction. Therefore, our stake of Petro Rabigh would be 15% afterwards from October 2025. This interest burden is going to become much smaller. At the same time, it's not only that. We need to make sure we'd be able to strengthen the ability of Petro Rabigh to obtain our revenue. For example, ethane cracker or debottlenecking, or by changing oil type, we're trying to see whether or not we'd be able to find margin improvement. What we're trying to show here is just an example of ways to strengthen earnings power of Petro Rabigh. There are several other projects underway so that Petro Rabigh's earnings power would be improved in the short timeframe. Even in the mid to long term, the issues around Petro Rabigh, one issue was about refinery capacity. Upgrading the facilities is something Aramco would have experience in and would be able to take initiative in working this together with Petro Rabigh so that Petro Rabigh's refinery capability would be upgraded in, again, the short time. Next page. Now, domestic and PMP reorganization, this is also something that we did announce quite recently. The polypropylene and LLDPE business is now integrated into Prime Polymer. Through this integration, we expect there will be a cost reduction totaling to ¥8 billion. That is the amount to be enjoyed by Prime Polymer. This enables us to find a more resilient essential business. Next page, please. Here on this slide, I would like to introduce once again our direction of PMP business. The direction that we're trying to aim is exactly what you find on this slide. In other words, we're going to be concentrating on high-value-added product. At the same time, we will be phasing down commodity businesses. We will strengthen ties, reorganization with the peers, and we would like to accelerate shift to solution business that reduce environmental impact. That is exactly what we're trying to do. Within these efforts, if we look at the action plan execution status, upstream is optimized operations at KO Ethylene. At the downstream, having a business integration with Prime Polymer, and also Petro Rabigh, a financial improvement plan, and the performance improvement project. For Singapore, PCS cracker area, that is going to be considered in a continuous manner. Regarding MMA, we'll stop two lines and achieving profitability. As for downstream, polyolefin at TPC, high value-added grade by expanding the sales of it. This is the school year, and next is the school year. We would like to achieve this turning into a profit-making business. Next slide, please. Having said that, the PMP business direction, as shown here, will be divided into three phases. Phase one is to strengthen the competitiveness of Tebow Works. Ethylene, close the ethylene plant, and polypropylene oxide's capacity enhancement. Also, commodity resin, polyester, and PVC, and polypropylene, polyethylene, and ABS business, synthesized rubber. We will either withdraw or integrate with other companies and strengthen it. As for phase two, the collaboration with companies and optimize the production, we would like to further move forward with structural reforms. Following the structural reforms, the direction that we will be heading towards is, as mentioned before, R&D and implementation to society that has a reduced environmental impact. Within phase one and phase two's recently upstream and downstream structural reforms, or withdrawing from the commodity products, in the most recent situation in Japan, we're able to move this forward in the fastest speed. Next slide, please. Next, the issues of the small molecule drugs. However, this business area in the most recent situation, FY2023, it has occurred with a large amount of losses. However, in a rapid manner, the business is recovering for the key three products against our original expectations. They are increasing their sales and very successful at it. The next generations and new drug development, Enzomenib and Nuvisertib, the two drugs in the oncology area, the development of that is also accelerated. In the recent situation, they are achieving quite a strong recovery. However, on the other hand, moving forward, this small molecule drug, at some point, the LOE, it is going to come about to LOE. The small molecule drugs are a blockbuster. It is going to require an enormous amount of development investment. Even though we are going to licensing in it from a different separate company, outside company, it's going to require a large amount of investment. Whether that ability to make those investments exist in Sumitomo Chemical, this is something we need to consider. Also, the new drug discovery of the small molecule drugs, the synergy of that with our company business is limited. Therefore, for the small molecule drugs in a short-term perspective, these three key products and the two drugs that will develop moving forward, the stability of the profitability is what we're going to aim for. From the medium to long-term perspective, we are going to explore partners. We need to pursue these two routes. Within the medium to long term, we would like to show a clear direction of this business. Lastly, I would like to talk about the improvement of the financial and capital efficiency. In the past, if we look back to our company's performance, the impairment ratio was high. The process of investment or the governance of it, whether that was adequate or not, those are the reflection points that we have. The investment management process, we are going to further strengthen it and enhance the probability of investment success. There are three key points in this effort. First will be data-driven, next objective, and the agile response. As for the data-driven, based on diverse scenarios, we are going to assess the risk in a quantifying manner. When we can do it, we will not miss the opportunity. We are going to make a decision based on quantitative data. The other one is objectivity. This investment matters for the business units. We do, we have been respecting the proposal from the businesses. Regarding that, bring in the external experts' perspective, or always bringing the external experts' assessment or the Corporate Planning's involvement. We would like to increase that involvement. We would like to make an objective decision. For the last part, agile, and this goes more for the CapEx or capital expenditure investments. For the large-scale investments, when the project is ongoing, there are times that the business environment will change. Once we say it's a go, it's not necessarily the case that we will continue to make that investment. However, in a timely and appropriate way, grasp the changes of the environment. Depending on a case, depending on how the environment changes, we need to make the decision of halting that project in an agile manner. Through these three factors, we would like to enhance the investment management and investment efficiency. That is going to lead to the improvement of ROIC as well. As for the shareholder returns, FY2023, we had a poor performance. From the perspective of shareholders' return, we ended up with an undesirable result. This year, we are planning about ¥12 of a dividend. It is not a sufficient level yet. In the future, the payout ratio of 30%, annual dividend ¥24 per share is what we would like to realize as soon as possible. The image we have in mind is ¥200 billion of core operating income. The net income is ¥140 billion. If we can achieve that, EPS is going to exceed ¥80. The payout ratio of 30% and ¥24 per share is going to become possible. At that level, the final net income, that target we have, we would like to achieve that as soon as possible. We'll put efforts towards that. Lastly, towards enhancing enterprise value is something that I would like to share with you. Conventionally, in this session of the meeting for current priority management issues and business strategies, we did not touch upon this that much. It's my impression. This is the ROIC tree. It's a textbook diagram. It's showing how a company can improve its corporate or enterprise value towards the capital efficiency by thoroughly focusing on improvement of capital efficiency. ROIC and ROE will improve. Through that, enhance the enterprise value is what we would like to do. I believe the next slide is the last slide. If I may summarize today's explanation regarding the upgrade of the business portfolio, as for the crop protection products, we have expectations for three blockbuster chemicals. For ICT, we will have a world-class semiconductor and display material business. We have that. For the pharmaceutical area, we have the advanced small molecule APIs and gene therapy, regenerative medicine, cell therapy. We have the strong CDMO business that is representative of these. As for the regenerative medicine and cell therapy, Sumitomo Chemical as a whole group, it is one of the segments of the overall pharmaceutical business that the whole Sumitomo Chemical Group should focus on. Also, from the commodity, the resin product business, we will withdraw ourselves as soon as possible. We will pivot towards developing the technologies to reduce environmental impact and can be deployed into society. For restructuring, the PMP business restructuring that we are doing right now, we believe that it has made significant progress domestically and internationally. The other issue regarding the small molecule drugs, recently, it is showing quite a strong recovery. However, in the medium to long-term perspective, being prepared for the patent cliff, we need to come up with a clear path towards that within the medium to long term. That concludes my presentation. We will now start the Q&A session. If you have any questions, please use the raise hand icon in Zoom. We will call your name. Once you are nominated, may I ask you to unmute yourself and start asking your question? You can ask two questions each time. You can raise your hand as many times as you like. If possible, it would be very good if you'd be able to turn your camera on when you ask your question. First of all, from Morgan Stanley MUFG, Mr. Watabe. This is Watabe from Morgan Stanley MUFG. Allow me to keep my camera off. Thank you for the presentation. My first question, I'd like to ask around the major change that you are going through. For the past few years, I think you had been working on enhancing your profitability, for example, PMP business, or perhaps Petro Rabigh, as well as pharmaceutical areas. That is exactly where you had been putting a lot of resource. I think there was like a lost one or two years. Now you're coming through some improvement. You talked about how you're trying to go for a winning passage through your organic synthesis technology. You said you also mentioned about Elephant in the Room. You have been going through some town hall sessions. You probably have spoken to many people. Do you feel any change within your organization? That is what I would like for you to share with us. That's my first question. Yes, thank you very much for your question. Ever since joining this company, I had basically been in the agrochemical business. For example, PMP or ICTM, or perhaps the medical area. I did not have much chance to engage with the members there. Ever since I have assumed this post as CEO, I have been able to have a lot of dialogues with these people. I realize what great talent we have, what great technology we have in this company. Another thing I would like to talk about is enhancing engagement. It is something that I have been pointing out many times. I do believe there are many highly engaged employees. It's just six months ever since I assumed this post. With all these great employees, great technology, and with great motivation by everyone, if we'd be able to have all these, I am very confident that Sumitomo Chemical would be able to come back to a growth trajectory. I am very confident about that. On the other hand, there was this very difficult time during FY2023. The damage there still has not been recovered fully. If you look at our financial performance, D/E ratio, our target this year is 1.1 times. Hopefully, we'd be able to have this even be better controlled. It is still over 1. ROIC, ROE, it's still within the 2% range. It is still low. Capital efficiency or financial status, I do have to believe we still are very vulnerable. This is where we need to have a sense of urgency so that we'd be able to improve our financial status with speed. What I feel the most challenging at the moment is how we'd be able to pedal through. We have great seeds for growth. We have great people. If it is really about creating financial improvement, we have to also understand that we do not have much ability to invest as much into these growth areas. How to keep the right balance is going to be very difficult. I hope I'd be able to do my best here. You mentioned about the ability to invest. You talked about Sumitomo Pharma, a small molecule business. You're trying to make sure you'd be able to create some result during this year and next. For example, any divestiture of the business so that you'd be able to use that amount for a more stronger business. Of course, that's exactly what the capital market is paying attention to, what you'd be able to do. I guess that is something that you're trying to hone into. Can you also share with us a little more about what you think about Sumitomo Pharma? Yes. In terms of what options we have, I'm sure there are various options at this moment. Compared to a year ago, the conditions behind Sumitomo Pharma have changed drastically. I will say many times this, but it is making a truly strong recovery at the moment. Amidst this situation, the small molecule pharmaceutical business, what can we do with this? At the same time, how do we want to be is also something that we have to think about. Especially during this presentation, I talked about what we'd be able to do within the regenerative medicine or cell therapy. This is an area where we don't use our organic synthesis technology. It does have to do with our long years of development and experience. Finally, we're starting to bear fruit. As I have mentioned, there is this issue of a patent cliff. In terms of this regenerative medicine cell therapy, there isn't really much patent cliff that we'd have to worry about. R&D expense, the clinical trials, for example, in Rakdera is not going to cost too much. Regenerative medicine, I know I have said this many times, but I feel like this is one answer to how we'd be able to proceed this pharma business. What we do with Sumitomo Pharma, this pharmaceutical business, the foundation of Sumitomo Pharma is very much living in this regenerative medicine and cell therapy business. With that experience, we also can create this aspect of how we'd be able to now grow our small molecule business. It's going to be important that we find the right response. There are various options to find a capital partner that we'd be able to have a capital alliance with. Just like you mentioned, another option is perhaps to divest this business. It's really these aspects that we need to have in analyzing the current status of Sumitomo Pharma. It's really about making sure we find an answer, the optimal, the correct answer in the end. Thank you very much. Thank you very much, Mr. Watabe. Next, from Mizuho Securities, we would like to invite a question from Mr. Yamada. Yamada from Mizuho Securities, thank you very much for your explanation. I have two questions, please. The first, regarding focusing on the business area that you can win, I think it is quite rational. Within the question and answer with Mr. Watabe, your company's D/E ratio, ROIC, and ROE, you have not reached a satisfying level. Therefore, you are in a situation where you cannot make investments in various areas. Having that as the condition you're in right now, sorry that I'm repeating. In this situation, why this regenerative medicine, in this financial situation, in this management business management situation, why are you going to go into that area? I question that. Currently, at this point, the clinical trial, the reason why it's not costly is because you're doing it in Japan and you don't do placebo. Also, the expansion size is not that large. Therefore, the IPS, which has the oncology risks or the ophthalmology risks of that IPS, you don't have to roll it out at the mass production level. That is allowing you to do so. I believe your achievement till now is wonderful. However, I think you should look at where it has a more affluent management capital. It's better to sell the business. I think it is going to be better to provide the growth opportunity for your employees and the company and your employees as well. What do you think about that? Thank you very much for your question. The question that you have asked and the points that you have pointed out, I think is quite a rational statement. Having said that, our company's strategy, excuse me, investment strategy or that investment capability, allow me to explain it once again. I did mention this in the medium-term explanation as well. Our company's depreciation cost on an annual basis is around ¥150 billion. Recently, it is showing a slight decrease, but it's around ¥150 billion. Let's say it is, and then in three years is ¥440 billion, and maintenance is ¥190 billion and ¥130 billion for strategy. Excuse me, ¥230 billion for strategy. The majority of this ¥230 billion is called AGL and ICTM. These are two growth areas, and that is the plan. Within the AGL, in the past, it's enhancing the footprint mainly in India and Brazil and developing new drugs and strengthening the vital rational. We bought a biostimulant company, and through that, we're able to take care of the legacy negativity. Regarding the ¥230 billion for the regenerative medicine, we can also invest that in ICTM, in a rational manner without increasing investment. We will be able to invest them in the new areas such as the regenerative medicine or ICTM is our way of thinking. Medical products and development, as you have pointed out, require quite an amount of capital. That is true. Therefore, we would like to make thorough management of the investments that we make. Furthermore, you may scold me for this, is that we are really focused on this, meaning that in the year 2025, for the 20-several years we have spent for development. This is something that we can be proud of to the world. This is the first attempt of utilizing IPS cell from Japan. We would like to realize that we are focused on that. Thank you very much. Related to that, I would like to ask my second question. Personally, your strength as a company is within AGL. You have been talking about that for 20 years, and now you're having capital to move it forward. I'm really happy for you. The gene editing area, I think maybe you should be putting more investment there in ICTM, the semiconductor-related, a rather more broad solution to be provided. You need various measurement equipments, and you need investment in the open innovation as well. Including those investments is ¥230 billion, is all right. For regenerative medicine, you want to do it on your own. Related to that, Sumitomo Pharma is something that you would like to make considerations, is what I thought. Is my understanding correct? Personally, especially towards AGL, I want you to specialize in that more, and you'll be able to downsize the conglomerate discount. You will be able to show the demonstration that you're focusing on that area. I believe that is going to be quite a strong positive factor for the shareholders and the market. As for your company, in a long-term perspective, it's better to have a regenerative medicine and cell therapy. Can you actually explain your thoughts towards that more? I myself, as you, Mr. Iwata, pointed out, the conglomerate discount, the criticism regarding that towards our company or comments towards our company, I think that does make sense. However, one of my responses to that is technology-wise, the organic synthetic technology is a consistent foundation of all of what we are saying. Within that, are we going to go into the medical pharmaceutical area? Yes, it is true, and I am aware that such a criticism does exist. Right now, you mentioned three businesses right now in your question: AGL, ICTM, which is pharmaceutical, AGL crop protection products. Outside Japan, in the global arena, there's the new company that does both together. That is a fact, true. If I may say, the medical CDMO and the ICTM have an affinity, high level of affinity, meaning that both require a high level of quality. With the customer, it requires a very close communication to roll out the business. From that perspective, both have an affinity, a high level of affinity as businesses. Crop protection products for AGL, using the organic synthesis technology, using that, it also has a high level of affinity with ICTM. Currently, if we look at the world, the global companies, the majority of them are the specialty companies for crop protection products. Therefore, I am aware of the fact that such opinions do exist. For the medium to long term, with this structure and plan that I have explained right now, using the backbone technology and also the technology that we can be, we are proud of towards the world, how we can utilize that moving forward to grow the businesses is what I would like to focus on. Thank you very much. When I introduce your company, the diagram of page nine, based on that, I say that you're not a conglomerate. I think I can do that. However, for regenerative medicine and Sumitomo Pharma, I have to think that is a conglomerate. Including that within this current running medium-term plan, I hope that you will revisit this area. Thank you very much. Thank you. Thank you, Mr. Iwata. Next, we'll take a question from Mr. Miyamoto from SMBC Nikko. Yes, thank you for the presentation. This is Miyamoto from SMBC Nikko, and I also have two questions. My first question, I think AGL is your strongest business that you would have. Now, when it comes to your crop protection products, you have a great pipeline. I look forward to what you people do. If I look at the past 10 years' revenue growth, I feel like it's not really growing on a dollar basis. I know Indiflin is really growing, but still, you're not really finding much growth in your revenue. Mr. Mito, how do you take that? That is something I would like to hear from you. Also, if we're trying to go for non-selective herbicide, don't you think you need to go for a select? When you try to go here, is this not what you're trying to look into? For example, if you look at the Grand Life past track record and what do you see into the future? First of all, going back to your first question, if we look at the dollar-based revenue growth, you're not really finding much positive track record. I think that is what you're trying to point out to. First of all, yes, that is a fact. We talk about B20, A2020? Until we are able to complete the development here. There was a time for like 10 years where it had been really difficult to come up with a new product. The final hit product was fumioxidine and a protein engine herbicide and pesticides. These two products, their patent had expired. Therefore, we find a lot of pressure from generic products nowadays. Because of that, there was some time when the revenue growth had been stagnant. That is true. That is true. Again, the investment that we made in the past to develop new products are now finally bearing fruit. A2020, B2020, the five products, by making sure that we'd be able to find growth, that is going to become a milestone for the next growth trajectory. Now, your second question, if I may point to the point of your question, if I may speak a bit of what has been happening internally, Rapidacil development, this goes back like 20 or 25 years ago. Roundup Ready succeeded. Therefore, in this Roundup area, we wanted to create a herbicide that would have a different mode of action. We wanted to create some herbicide resist system. Together with that, we worked on this. It was a major project for us. There had been many events that happened, and the product development itself had been stopped. I feel like there already is like Bayer and Syngenta, Corteva, they already do have all these products in place. They already do have the market. If we're trying to go into this business now, it's almost impossible. It is quite difficult. That is why we have decided to partner with Bayer. That is how we have been able to develop Rapidacil. That's exactly how we changed our course through the years. Your final point, I guess your point of the question is, is there not going to be any M&A within our AGL business? As we try to look into the further future growth of AGL business, I do believe we have already been able to put in all the necessary actions. Again, I have been speaking to the investors ever since I was responsible for AGL. If there is any missing piece, it could be how we'd be able to enhance biorational within Europe. Maybe there could be acquisitions required for there because Europe, there is this farm-to-fork strategy. In other words, it's about using more, it's going for a more organic procedure in this agro business, using less chemicals. Therefore, our biorational business seems to have great potential in this time, in this environment. It's not just about the product portfolio, but it could be about production method, or it could be about registration. It could be about the supply chain. We have to make sure we have that foundation. If we wanted that foundation, it's not about creating this from scratch. It could be about acquiring a company that would already have these functions. That could be one strategy we may want to opt for. We do want to see what investment capacity we'd be able to have in thinking what options are on the table. Thank you very much. My second question is about Chinese chemical manufacturers. Now they're becoming more advanced. Can you share with us your take on this part? In your case, in life science or agro areas, AGL, this is an area where we do have quite a good capability. For photoresist, I think you do have a strength here. For example, photoresist, I feel like there's a lot of Chinese players really coming into this play. We know that there could be some risks behind some of the development in high-purity chemicals. Especially when you look at the Chinese peers, Chinese players, how could they impact your performance in the end? That is a very tough question, but it is also a very important, significant question that we have to really identify. We underestimate Chinese players, if I may, and that will hurt us in the end. When it comes to advanced technology, Chinese players, many of them would have a lot of areas that would exceed, excel the capabilities of Japanese players. How could we keep on winning in this environment? It's really about always managing what could be the worst-case scenario. In the end, perhaps the golden rule could be something that I've already mentioned. For example, when it comes to organic synthesis technology, we do have a top capability globally, a top capability in the world. The golden rule is to make sure that we be able to have like a linear type of ultimate novel innovation in this organic synthesis technology. That's exactly what I would tell to our researchers. It's not just about trying to come up with something that is slightly better or slightly easy to use because it will take no time for the Chinese players to catch up. It's going to be important that we have something ultimately different, ultimately innovative. One another thing, if I may. Chinese players certainly are a threat, but on the other hand, it's also important to think how we'd be able to partner with these Chinese players. I think that thinking is also important. For example, when it comes to autonomous driving for automobile, I think that's a great example. Toyota and Honda would have their own technology development going on. There are a lot of Chinese players that would be using startup capabilities, and I think there's something we can learn from there. For example, if there's any technology made by some startups in China, I'm sure there are some geopolitical issues that we'd have to resolve, but there could be an opportunity in aligning with these people. Of course, we have to make sure that we comply with all the regulation in each market. If there's any way we'd be able to partner or collaborate with Chinese players, that could also be one option down the road. Thank you very much. Thank you for the detailed explanation. Mr. Miyamoto, thank you very much. I would like to take the next question, Mr. Okazaki from Nomura Securities. Please go ahead. Mr. Okazaki, can you hear me? This is Okazaki from Nomura Securities. Thank you very much. My first question is regarding AGL, the agro part, Indiflin, and the biorational, the strategy of your company. I heard it very well. However, the market is difficult to predict. North America, Asia, South America, some markets, especially for the tariffs and inventory adjustment. Since you became the President, Mr. Mito, the morale of the business units is increasing, is what I've heard. Including all these points, what is your take on the business environment right now? Thank you very much for your question. First of all, I would like to explain about the business environment. The largest market for us is Brazil. From FY2022 to 2023, they experienced quite a volatile up and downs due to the effect of COVID. They actually ran to build up the inventory. They had accumulation of the distributable inventory, and they crashed. Looking at the past, in the case of Brazil, they have a cyclical environment. When it's good, each manufacturer puts a lot of products in the market. From then, several years, they face a stagnant time. The market growth going through this cyclical trend repetitively. For the last two years, 2023, 2024, and this fiscal year, this distributable inventory situation has been improving. We thought that the market will move. That area is still not resolved. Continuing from last fiscal year, Brazil is still facing quite a difficult situation. Next, North America, which is another focusing market for us. Originally, the Trump administration tariff due to that and with the relationship with China, the corn and soybean export to China is going to decline, is what was predicted. That is going to have a negative impact on the farmers. Therefore, have a negative impact on the purchase of the crop protection products. In fact, China does not buy soybeans or corn from the United States that much at all. The impact of a tariff, the U.S.-manufactured soybean and corn sales, I believe there's a minimum impact on that, is my personal opinion. Also, on the other hand, the bioethanol demand is increasing quite a bit. If that is so, even though the price for soybean and corn from feed goes down, it will go over to the ethanol usage. Therefore, in that case, with that type of a relationship of this, the U.S. market this fiscal year, it's not at its best, but it is going to proceed steadily, is how we look at it. The next important market is India. There's quite a large impact from the climate. When they have sufficient amount of rain during the monsoon season, then the agricultural activities will be quite active and will be able to sell agricultural products. During the monsoon period or season, if there's not a sufficient amount, there was not much of a sufficient amount of rain at the start. Since then, up to now, it is raining in a steady manner. In a total perspective, the largest market of Brazil is facing difficulty. We need to keep paying attention to the markets, but we would like to thoroughly respond to the situation. Regarding the tariffs, it's very difficult. For example, it's 15% for Japan. For crop protection products, even though it is in the same crop protection products, depending on the particular product, the tariff rate will differ. We do need a close management of it. We have three supplying sites for crop protection products: China, India, and Japan. We are looking at the tariff rate in detail. When it's more advantageous to export it from Japan, we will export it from Japan. If it's more beneficial to export it from India, we will do so depending on the product. By doing such these movements, we will minimize the impact. Thank you very much. My second question is regarding P&P business direction on slide 28. I wanted to confirm Prime Polymer for domestic business. The comprehensive direction has been solidified and for Arabic as well. For Singapore, for upstream and downstream, I believe there's various discussions. As like a farmer, a way of thinking, do you have a similar way of thinking? If you can give us a clue of what your thoughts are on as for P&P business. As I have mentioned, right now, KO, ETLIN, and POLY, Prime Polymer within the domestic combinates, we are able to do this in the fastest way. This is not the end of the story. Moving forward, in addition, the collaboration with other companies is something that we need to have a forward-looking perspective. That goes for Japan and also the combinate for Singapore as well. The stakeholders, there are quite many stakeholders in Singapore. There's going to be importance on the communication we have with the Singaporean government. All the complex of Singapore or the complex in the KO area, for all of them, things don't move forward unless we have all the agreement through the collaboration. It should not be the case. With Mitsui and Idemitsu, where we were able to have a collaboration agreement and move things forward, that is one good outcome. The way of thinking regarding the anti-monopoly law is also one of a positive outcome as well. Regarding the remaining areas, in a parallel manner, of course, we're going to work on strengthening our competitiveness. A further collaboration with other companies is something that we would like to accelerate as well. You are starting from where you can start for upstream, downstream Singapore, yes. Okay, that is all. Thank you very much. Thank you very much, Mr. Okazaki. It is now close to the time to end. With that, we'd like to conclude the investors' meeting for the current priority management issues and business strategy. Once again, thank you very much for your attendance today. Today's session, you'll be able to see the video stream within our website. Please pay attention if that is going to be helpful. At the very end, I'd like for you to. This concludes today's session. Thank you very much for your participation today. This concludes today's session. Thank you very much for your participation today. This concludes today's session. Thank you very much for your participation today.