I'll be your facilitator today. My name is Kobayashi from Corporate Communications. Thank you very much for attending our investors' meeting for FY 2024, first-half financial results, management priorities, and business strategies. First, the President, Mr. Iwata, will make a presentation, and later we will receive your questions. We plan to conclude at 5:45 P.M. Now, Mr. Iwata, over to you. Good afternoon. I'm Iwata, the President. Thank you very much for attending our investors' meeting despite a very busy schedule. I'd like to thank the investors for your daily support and understanding to our management. Thank you very much for that. This is today's agenda. I will try to focus my explanation as much as possible and leave as much time as possible for Q&A. Please turn to page three. First, this is today's executive summary. It is divided roughly into three sections. One is business performance. Core operating income of the first half of 2024 achieved a V-shaped recovery of more than JPY 120 billion year-on-year, with IT-related Chemicals reaching a record high for the first half and Pharmaceuticals resolving the losses. Unfortunately, there was a net loss of JPY 6.5 billion falling short of a positive income due largely to one-off factors such as foreign exchange losses and debt forgiveness of Rabigh. But there was significant improvement of about JPY 70 billion from the previous year. For FY 2024 full year, we forecast core operating income of JPY 100 billion and net income of JPY 25 billion, an increase of JPY five billion over previous forecast, including the one-off loss of Petro Rabigh. First, we will focus on achieving a V-shaped recovery in the current fiscal year and then aim to achieve core operating income of JPY 100 billion in FY 2025 based on actual performance. Secondly, immediate-term concentrated measures to improve business performance. We are first accelerating the upgrading of our business portfolio, and our cash generation target has been revised upward to JPY 700 billion, while interest-bearing liabilities are expected to be reduced by about JPY 300 billion from the end of the previous year. Lastly, fundamental structural reforms. Sumitomo Pharma is making progress as planned in reducing costs and expanding sales of its three core products. Rabigh is implementing the improvement measures announced in August. With regard to the domestic petrochemical restructuring, we have made one step forward. We agreed with Maruzen Petrochemical to consider operational optimization at Keiyo Ethylene. In October, we launched the new business organization, and we are now in the process of formulating a medium-term management plan towards next March. That is all for the executive summary. Now, I'd like to explain the financial results. Please turn to page five. Financial results for the first half of FY 2024: sales revenue JPY 1,241.4 billion, core operating income positive JPY 29.5 billion, net income minus JPY 6.5 billion. Core operating income will be explained in the next page. A significant V-shaped recovery was achieved with an increase of JPY 126.1 billion from the previous year, falling a profit in the first quarter. Unfortunately, the net income was slightly negative due to the significant impact of foreign exchange losses and the one-off loss from the debt forgiveness of Petro Rabigh, which was recorded in the second quarter, but there was great improvement compared to the previous year. Core operating income by segment is shown on page six. As you can see, all segments improved from the previous year. Segments with large improvements are as follows. Pharmaceuticals will be explained in detail later. With sales expansion of three core products and cost reductions, Sumitomo Pharma losses are almost eliminated, and there has been an improvement of JPY 66 billion year-on-year, which is plus JPY 500 million. IT-related Chemicals, display materials, and semiconductor materials were strong, and income increased JPY 20 billion year-on-year to JPY 37.5 billion. This is a record high for the first half of a year. Health and Crop Sciences improved significantly from the previous year due to recovery in the methionine market, increased shipments of crop protection chemicals in South America, and the effect of a yen depreciation. Next is the full-year forecast revision of FY 2024 sales revenue is ¥2,600 billion, core operating income ¥100 billion, which is the same as the previous forecast. Net income includes a large one-off loss of ¥46 billion consisting of a foreign exchange loss due to the assumed exchange rate of ¥145 per dollar at the end of fiscal year, which yen is about ¥6 higher than the end of FY 2023, and the expenses related to debt forgiveness of Petro Rabigh. But we still expect a profit of ¥25 billion and an increase of ¥5 billion. Core operating income by segment compared to the previous forecast. We expect the total to remain flat at JPY 100 billion, but there are some ups and downs by segment. In Essential Chemicals, we expect a decrease of JPY 24 billion from the previous forecast, mainly due to the downturn of Petro Rabigh's second quarter or April to June results due to deteriorating refining margins and an expected decrease in the gain on the sale of the business from the initial forecast. On the other hand, in IT-related Chemicals, we expect an increase of JPY 10 billion for the full year, mainly due to strong first-half results in display materials and semiconductor materials. In Others, although we are unable to provide details at the moment, we expect an increase in business sales and an increase of JPY 10 billion in profit. Page nine is a breakdown of core operating income by segment into first-half actual, second-half forecast, and full-year forecast. Although the first-half results account for about 30% of the full-year forecast, we expect core operating income of ¥100 billion for the full year, including gains on sales of businesses in addition to the usual seasonal nature of the Health and Crop Sciences business. As of the first of this month, we have reorganized our organization from five business divisions to four business divisions. This is an overview of a reorganization and an image of core operating income after the reorganization. Health and Crop Sciences will be Agro and Life Solutions, excluding CDMO business. IT-related Chemicals is integrated with mobility-related business of ICT and Mobility Solutions. Essential Chemicals is integrated with a part Essential and Green Materials. CDMO business of Energy and Functional Materials and a part of Pharmaceuticals will be reorganized into Advanced Medical Solutions. Sumitomo Pharma's small molecule drug discovery will be included under Others. Page 11 is an image of FY 2025 core operating income. FY 2024 core operating income, including one-time gain on sales of business, is JPY 100 billion. In FY 2025, we aim at JPY 100 billion based on actual performance. Core operating income is expected to be around JPY 40 billion in FY 2024 based on actual performance. The financial improvement plan announced in August by Petro Rabigh is expected to have a positive impact by reducing our share by 60% from 37.5% to 15%, thereby reducing the losses. In case of FY 2023 results, as an example, based on simple calculations, a 60% reduction in share equivalent to losses of JPY 1.3 billion results in a turnaround of about JPY 40 billion. So, JPY 40 billion and JPY 40 billion basis of Rabigh. In addition, it's not yet time for the FY 2025 budget, but we believe that the level is sufficiently attainable, including the increase in income from the growth drivers of Agro and Life and ICT and Mobility. Page 12 is shareholder returns. Despite the upward revision of the earnings forecast for FY 2024, our policy is to prioritize the strengthening of our difficult financial position, and therefore we maintain our previously announced dividend forecast of JPY 9 per share for this year. Next is the immediate-term concentrated measures to improve business performance. This is an update of the overall picture of this measure. The left-hand side shows the target figures set in April this year. The right-hand side shows the current revised targets. In general, we are making progress in almost all items exceeding our previous targets. The cash generation target was originally set at JPY 500 billion, but was revised upward to JPY 600 billion in April this year and now to JPY 700 billion. With regard to rebuilding business, we are accelerating the sale of non-core businesses from the viewpoint of the best owner, including the sale of aluminum smelting business in New Zealand and the sale of shares of Sumitomo Bakelite. Inventory reduction will continue to be based on JPY 150 billion and with the aim of further reducing inventory. In the area of selective investment, we are aiming for a reduction of JPY 200 billion, up JPY 50 billion from the previous JPY 150 billion reduction through further reduction efforts. In the area of asset sales, we plan to further increase the amount of sales to be sold, including the sale of wellness facilities. We are on track to achieve our initial cash generation target of JPY 500 billion. We will continue to work with a sense of speed without loosening our grip to reach our new target of ¥700 billion in the next five months. We are now conducting rebuilding of various businesses. This will contribute to a V-shaped recovery and cash generation in the short term, but it's not about shrinking. We believe it is important to shift to higher value-added business and upgrade our business portfolio. As shown on the right-hand side column in the agro area, to launch new drugs in the large pipeline and biorational-related M&As in ICT-related areas, expand our semiconductor materials facilities, next-generation displays, and also strengthen our CDMO business, develop technologies that reduce environmental impact. In general, investment has been reduced, but we are investing in management resources in a selective and focused manner. Page 16 is an image of the progress of business rebuilding. The newly announced projects since the last presentation are indicated in the bottom right in red. As I already explained in the executive summary, the cash generation target is now JPY 185 billion against JPY 150 billion in the previous presentation. Currently, we are on track to achieve about JPY 95 billion out of that amount. We are proceeding with many projects simultaneously and with a sense of speed, including those that could not be made in time for today's presentation due to the partner's circumstances. This is the progress of inventory reduction and selective investment. Inventory was JPY 712.4 billion as of the end of September 2024. We will work to further reduce inventory to below JPY 650 billion by the end of March 2025. We will reduce investment to less than JPY 500 billion over the current three-year period, a reduction of JPY 200 billion from the plan. This is a further reduction of JPY 50 billion from the previous announcement. Sales of cross-shareholdings are progressing well, with about JPY 50 billion sold as of September 2024. We expect to generate a cash inflow of around JPY 60 billion during the remainder of FY 2024, including those that are scheduled to be sold. In the use of surplus funds, we have already generated around JPY 70 billion through group financing and other means. In asset sales, sales of other assets is JPY 38 billion, up from the previous target of JPY 30 billion due to additional sales of welfare facilities. Interest-bearing liabilities at the end of FY 2024 are expected to be JPY 1,270 billion, a decrease of around JPY 300 billion from the end of the previous year. Cash flows from operating activities are expected to be JPY 160 billion, while cash flow from investing activities is expected to be negative JPY 190 billion. Against this, we will generate JPY 340 billion through short-term measures such as the sale of businesses, which will be used to repay interest-bearing debt. D/E ratio at the end of FY 2023 was 1.34. End of FY 2024 will go down to 1.12. Next is fundamental structural reforms. This slide shows the overall picture of fundamental structural reforms that were introduced in April. We have a strategy centered on rebuilding Sumitomo Pharma and Petrochemicals and growth strategy to remain a company with a global presence 10 to 20 years from now. These are the two strategies. Let me start from a revival strategy. Please turn to page 23. First is Sumitomo Pharma. In the first financial results section earlier, I mentioned that the company achieved solid results in the first half of the year. Let me explain one of the factors behind this, namely sales revenue trends for the three key products. The combined sales revenue for the three key products in the first half increased 70% year-on-year to JPY 66.7 billion, showing steady progress. In particular, sales volume of Orgovyx, a prostate cancer drug, has increased more than expected due to factors such as a reduction in patient copay for high-cost medical care in the U.S. and Orgovyx becoming a first-line drug for combination therapy in revised standard treatment guidelines. Gemtesa, an overactive bladder medication, has so far been largely unaffected by the launch of generic drugs, which was a cause of concern. Next is on cost reductions. We expect to achieve a reduction of approximately JPY 108 billion in FY 2024 year-on-year. The measures already taken last year, such as restructuring in North America, shrinking clinical trial costs, and impairment of intangible assets, are taking effect, and the cost-cutting measures implemented with the involvement of corporate restructuring experts are proving to be effective as expected. As of the first half of this fiscal year, SG&A and R&D expenses were reduced by approximately ¥55 billion year-on-year. We plan to achieve a positive core operating income for the full year by steadily reducing costs until the end of the financial year, along with the expanding sale of the three key products I just explained. In addition, the effects of the domestic restructuring will emerge from December this year onwards, which will increase our financial results by over ¥10 billion over the course of FY 2025. Next, let me talk about the progress of Petro Rabigh's rebuilding plan, which was announced in August this year. As for debt forgiveness, under the financial improvement plan, out of the total $1.5 billion, $1 billion has been forgiven, and the remaining $500 million is scheduled in January 2025. However, as explained earlier, the full amount has been treated in the first half of the fiscal year. Regarding the change in capital structure, we are currently in discussions with relevant parties to implement it in April next year. The method for recontribution of the proceeds from the sale of shares is currently under discussion with the local regulatory authority, Saudi Capital Market Authority, and depending on the outcome of the discussions, a method for the contribution of a total of $1.4 billion from both companies will be decided. As for the plan to strengthen earnings power, we are currently accelerating our consideration of both mid- to long-term measures, including upgrading our old refining facilities, as well as measures that will produce immediate results in close cooperation with Petro Rabigh under the leadership of Aramco. Next, page 26, please. This slide is an update from last time and summarizes the status of reorganization in Japan and Singapore. In the domestic upstream ethylene plant, we are aiming to rationalize existing ethylene plants and convert into a complex with reduced environmental impact, and we have now reached an agreement with Maruzen Petrochemical to study the optimization of Keiyo Ethylene operations. I will explain this later in the next slide. Behind-the-scenes discussions are ongoing on the downstream side as well, and an agreement is likely to be reached soon. As for Singapore, we have decided to reduce MMA production capacity, which I will explain in the next slide. As for PCS and TPC, I think it will take a little more time. We are currently in discussions with parent company Shell and Others and are considering the matter from a long-term perspective, including production capacity optimization. As we announced in a press release the day before yesterday, let me explain the rebuilding of our domestic cracker business. As you know, utilization of naphtha crackers continued to decline in Japan due to capacity expansion in China and other countries. We are currently being forced to export surplus low-profit ethylene and commodity resins in order to maintain minimum utilization rates. As rapid improvement in the supply and demand balance cannot be expected in the future, optimizing the domestic supply system has become a common challenge for petrochemical manufacturers. In this environment, Maruzen Petrochemical has decided to study capacity reductions, including shutting down a naphtha cracker, and SCC and Maruzen agreed to begin considering ways to optimize Keiyo Ethylene's operations. Currently, the two crackers at Maruzen and Keiyo Ethylene have a combined capacity of 1.3 million tons and are operating at 80%. But if one is shut down, the production is consolidated. We plan to reduce low-profit products and operate at 100% utilization rate. This will improve operating efficiency and reduce unit fixed costs, which is expected to significantly improve our performance. Next page shows the capacity reduction of Singapore MMA announced in September. Before the reduction, our MMA monomer production capacity was approximately 300,000 tons, ranking fourth globally. Like ethylene, expansion of production capacity is expected to continue, mainly in Asia, and various rationalization efforts alone have made it difficult to operate. Therefore, we decided to shut down two of the three monomer and polymer plants, respectively, in Singapore and reduce the scale of operations to a profitable level, which will result in the reduction of approximately 70%-80% of Singapore's production capacity. This will enable significant reductions in fixed costs, such as equipment and labor costs, and the effects of this improvement are expected to contribute to business performance from the second half of this year. From a medium to long-term perspective, we will advance recycling technologies' development that contribute to reducing environmental impact and their social implementation, including licensing and focus on solutions business as MMA division. Next, I will explain our growth strategy. As mentioned last time, this is an image of what our company aims to achieve in the long term. In the four areas of social issues that we consider important: food, ICT, healthcare, and environment, we will utilize our unique core technologies and important assets of Green-GX, Digital-DX, and Bio-BX. Our four newly established business divisions will contribute to solving social issues with innovative technologies. By so doing, we hope to remain a company with a global presence as an innovation solution provider. These are the long-term goals for each sector. I will skip this as I explained it at the strategy briefing in April. Each segment is currently working on fleshing out and considering medium to long-term action plans in line with this goal. From here, I will introduce the growth strategies and topics of each segment. We are planning to hold a business strategy briefing for agro and life ICT and Mobility Solutions on December 4th of this year. So I will leave the details to that meeting and limit today's explanation to just a brief overview. First is Agro and Life Solutions. The vision of this segment is to contribute to the realization of a society that includes regenerative agriculture based on the two pillars of our organic agrochemical technology that we have cultivated over many years and chemicals with natural matter, such as biorational and botanicals. We will continue to expand our business with both chemical and biorational agricultural materials armed with our world-leading capabilities in developing new agents with low environmental impact and our unique biorational product range and a global footprint that covers key customers' regions such as South America, North America, India, and Japan. We have previously introduced South America, which has the largest market size. So today, I will provide an overview of our strategy for Europe. The size of the European market is approximately $15 billion, which is actually larger than North America, as shown in the line graph on the left. The region is characterized by longer registration evaluation periods and higher costs due to strict regulations. The hurdles for maintaining registration of products with a high environmental impact are increasing. This situation can be seen as an opportunity to expand sales of new agents with a low environmental impact and to increase opportunities for biorationals. In addition to the fungicide Indiflin, which is growing its sales in South America, we will focus on launching biorational fruit thinner Accede. In Europe, where we have relatively small presence, we will also use M&A to further expand our biorational business. next is ICT and Mobility Solutions. In terms of business strategy, in next generation EUV resists, we aim to achieve the top share in the market with its proprietary organic molecular resist while expanding its semiconductor materials business by actively introducing semiconductor back-end process materials where technology is transitioning. The newly established Texas base for semiconductor chemicals in the U.S. is scheduled to start operations at the end of this financial year, and we aim to use this as a foothold to expand our semiconductor materials business in the U.S. In existing business areas, display materials will shift its portfolio to OLED and automotive applications. In semiconductor materials, we will strengthen our supply infrastructure in advance of demand growth, which will be explained on the next slide. Regarding photoresists, our ArF resist plant in South Korea began mass production in February of this year as planned. Over the past few years, we have invested a total of approximately JPY 20 billion in Japan and South Korea, and the overall production capacity next year will be roughly double that of FY 2021. In semiconductor chemicals, following our base in Texas, we secured land in South Korea for a new plant of the same size as our current main factory with an eye toward the 2030s. Regarding the semiconductor back-end process, we are focusing on targeted development, which will be elaborated in December. The semiconductor materials revenue currently stands at around JPY 100 billion, and we aim to grow it 2.5 times higher by 2030. Next is Advanced Medical Solutions. The strength of this segment are the comprehensive capabilities developed in the life science business, strong organic synthesis capabilities that can handle small and medium-sized molecules, and synthesis technology in high-purity long-chain nucleic acids. Under our business strategy, we will continue to develop and nurture regenerative medicines and cell therapies while actively expanding our CDMO business. Page 37 is our CDMO business. CDMO market enjoys abundant demand for small molecule drugs, CDMO, due to the horizontal specialization of pharmaceutical companies, multi-sourcing at customers, and increased need for stable supply. In order to meet the growing demand, we are expanding our production regime, positioning Oita Works as the third manufacturing base for our small molecule drugs CDMO business after Okayama and Gifu, and are strengthening the production infrastructure. This year, in addition to taking over Sumitomo Pharma's drug multi-plant, we constructed a new small molecule drug plant and held the completion ceremony just yesterday. In addition, a new CDMO plant for nucleic acid medicine was built and started operation at the Oita plant last year. Furthermore, we will combine the knowledge and know-how of both Sumitomo Pharma and ourselves on CDMO business for regenerative medicine and cell therapies, and we'll maximize group synergies to expand the business through S-RACMO, whose investment structure has now Essential and Green Materials. we will make a major shift away from conventional petrochemistry and focus on creating value through technologies that reduce the environmental impact. Leveraging our strength in the development of environmental impact reduction technologies such as chemical recycling and material recycling, we aim to stabilize earnings by expanding our licensing and catalyst business while also advancing GX technology development with the aim of commercializing the technology and licensing it by around 2035. Next is an update on the development of the Green Innovation Fund business on chemical recycling, a future pillar of the sector. Today, let me briefly explain the technology for ethylene production from alcohols shown at the bottom. Bioethanol is one of the important biomass raw materials, but producing ethylene and propylene from ethanol using existing technology requires multiple reaction stages, resulting in huge capital investment. On the other hand, by using the catalyst we developed, it is possible to easily produce ethylene and propylene in a one-step reaction, and yield of 80% has already been achieved on a bench scale. A pilot facility is currently under construction at Ehime Works and is scheduled for completion and start of trial operation in the first half of 2025. We want to quickly implement these environmental impact reduction technologies in society and develop them into our Essential and Green Materials sector's business. A new research building innovation center, Meguru, which will serve as the development base for technologies that reduce such environmental impact, was completed in the Chiba region, and completion ceremony was held in June. Our Chiba region has traditionally been a manufacturing and research base for petrochemical-related businesses, and in addition to technologies such as polymer design and catalyst, we also have scale-up facilities for commercialization in the laboratory, which is a key point. In the future, Meguru will use these technologies as a foundation to accelerate the development of innovative chemical recycling technologies that reduce the environmental impact. Finally, outlook on our long-term business performance. Over the past six months, we have set a direction for the restructuring of Sumitomo Pharma and Petro Rabigh, and have also been pursuing various business reorganization efforts. As a result, I believe you can see that there is a high degree of certainty that we will achieve a V-shaped recovery in FY 2024. Going forward, in order to increase the likelihood of returning to growth in 2030 and 2035, our performance in 2025 will be an important point. As I explained in the first part of my presentation, in order to achieve core operating income of JPY 100 billion in 2025 based on our actual real-term organic capabilities without one-off gains, we will work to formulate a new medium-term corporate business plan under a new structure starting in October with the aim of improving the profitability of each of our four sectors and at the same time building a new growth model. That concludes my presentation. Thank you for your attention. We would like now to start the Q&A session. The first question is from Morgan Stanley MUFG Securities, Mr. Watanabe. Thank you. And Watanabe from Morgan Stanley. Thank you for your presentation. Profit in terms of core operating income, congratulations for that. First is on page 11 of the material, FY 2025 core operating income to achieve ¥100 billion. I have impressions that this is still low. Increased profit of non-petrochemical business. Does that include Pharma or not, as Pharma has moved under Others? And ¥600 billion of a one-time gain on sales of business by segment. I think there are such impacts, but in terms of variations, what are the major components and what's the difference between first and second half? And for Rabigh, $1.3 billion negative figures. You assume this negative figure will continue, but still you aim a total of ¥100 billion. Could you explain further details? That's my first question. Thank you for your question. For FY 2025, core operating income JPY 100 billion may still be a little low, as you have mentioned. But for FY 2025, we have not yet made our budget. From now, we will include the various factors and come up with the figures for FY 2025. On extra performance, core operating income JPY 100 billion is the minimum level that we want to achieve. On page 11, the non-petrochemical business Pharma is included for non-petrochemical business, but how much is that included? I don't have such figures, but the concept is that this is included here. And for Rabigh, in FY 2023, based on that, there was a loss of $1.3 billion. This starts from the figures of FY 2024, one-time gain of sales of businesses. Then excluding that, core operating income is JPY 40 billion. That is the starting point. From there, how much Rabigh's change in the share, how much will that be impact? I have explained that as an example. In FY 2024, compared to 2023, if the same performance continues by reduction of our share, about JPY 40 billion burden will be reduced. Original JPY 40 billion and plus reduced burden of Rabigh, which is JPY 40 billion, and the addition to that, plus JPY 20 billion or so, will come from other areas. FY 2024 performance, how much is a one-time gain and how are they included? It is quite difficult. By each sector, there are not so many one-time gains included. As for the actual figures, maybe that can be provided later. Yes. In the current forecast, in the sector, in the segment, for each sector, a few hundreds of millions are included. For Pharma, it may be slightly more than ¥10 billion, but for Others, it is at the level of a few billions, and there's also some included under Others. I see under Others, compared to last year, it's not that large. Oh, I understand the point. Thank you. My second question is about Health and Crop Sciences. Now, from next fiscal year, I believe this is a growth driver for next fiscal year onwards. Results of the first half, is that growing or not? It's not very clear. Looking at the financial results material, not this material, but on page 22, increasing sales, volume variance is negative, and operating income volume is positive. Could you explain this difference and the current situation and Rapidicil situation, including the market of methionine in Health and Crop Sciences? What is the current situation? For these two products, what is the potential? On page 10, Health and Crop Sciences, results compared to the previous year. Sales is not increasing, but profit is increasing. Even compared to page 22, could you explain that? I don't have the detailed figures with me right now, but the methionine market price increase is greatly affecting the price variance. And in terms of cost, the depreciation methionine has reduced, and that is another factor. And there's also volume variance, and increase of shipment of Indiflin is a major factor. However, in the first half, one negative factor is that in the first half, usually South America, the southern hemisphere is the demand season. And in South America, there was quite a widespread drought. But timing to sow the seeds and at the same time, agrochemicals are used. But there seems to be a few months' delay in the first half. So results of the first half were supposed to be higher, but was not that high. The man responsible for South America is here today. It seems that finally there's rain and the market started to move. With a delay of a few months, the South American market has started to move. That is the situation of Health and Crop Sciences for the first half. This is one of the reasons for the instability. And about Indiflin and Rapidicil, I don't have the figures with me right now. But registration in each region is proceeding, and following that, volume will increase. The main market is North America. Registration in North America will be 2026, so it will take a few years. For Indiflin and Rapidicil situation, I would like to send you a memo later at a separate occasion. Yes, thank you very much. Thank you. Thank you very much, Mr. Watanabe. Next, Mizuho Securities, Yamada-san. Please go ahead. Yes, this is Yamada from Mizuho Securities. Thank you very much for the presentation, and congratulations for turning profitable and the progress of the structural reform. I have two questions. First is a rather long-term perspective, the business portfolio strategy. In your presentation today, you said Sumitomo Pharma's growth strategy. You did not touch on the growth strategy of Sumitomo Pharma, and the allocation is in Others. It is positioned as non-core. It will not fall under Advanced Medical Solutions and Essential Green Materials. Expected ROIC is 4%. It is lower than WACC. So what is your view on the long-term Essential and Green Materials? in the past, with the basic ethylene, caprolactam production, and propylene oxide, these very low environmental impact products have been launched, but you've not made much profit out of it. And I personally think that is not needed by the society. People think they want these low environmental impact products if they are low cost or free, but not if it's expensive. Will ROIC exceed WACC in the long term? So what is your Essential and Green Materials? thank you very much. Thank you for the question. So both questions are very much to the point. First of all, Pharma. It is categorized as Others. This may be a disrespect to the Pharma people, but in the long run, we have four priority business areas, and it is not included in the four. And as I've mentioned in the past, the regenerative and cell therapy group is doing R&D and cultivated as a growth business. As a group, we will cultivate this business. But for the small molecule drug discovery, Sumitomo Pharma in drug development and the in-licensing, we do not have the discerning eyes, unfortunately. And so it is difficult to find the target. And introducing a new drug costs money. And so given our financial position, that is difficult. And so given these circumstances, the Pharma, small molecule, and drug discovery, we made this decision. The sustainable long-term growth of Pharma, as I mentioned in April, we will consider the most desirable form for the Pharma and explore all options and continue studying Essential and Green Materials. you said return may be too low, and you are exactly right. There are two reasons. One is the low environmental impact product business. We do not have a clear view on what business this will be like, and as you mentioned correctly, Yamada-san, the technology that we thought is effective were not implemented in the society on a full scale, so the return from the new technology cannot be foreseen yet, and there are businesses that we need to retain and sustain, so for those two, the target profitability is a difficult challenge, so first, we need to maintain this level. Otherwise, there's no point of having this business. So this is the minimum level that we plan to keep as this business division. So that is the line of thinking. No disrespect, but your chemicals' strength is precision, synthetics, and high purity, and the molecule modification and life science. So the bulk-type polymer science may not be so meaningful for you. Other companies, I would not say this to other companies like Mitsubishi. Mitsui and Mitsubishi, I would not say this, but you can sufficiently survive and transform into specialty chemicals. But am I wrong? So bio and fine chem, Sumitomo has strength there, that's for sure. But essential and petrochem, Sumitomo Chemical has strength in the catalyst. And one example is ethanol, ethylene propylene from ethanol. And the other two, green innovation, GX fund catalyst is the key technology in both. And so it Essential and Green Materials is part of Sumitomo Chemical. If this leads to lower environmental impact, there is ample value for the company to hold on to this business. What is the probability for this low environmental impact product to unlock its value? We need a little more time to ascertain that. Thank you very much. I am sorry. This is long, so I will just keep this one question. In your case, catalyst technology is great. Inorganic, I know I understand this from the inorganic technology, but other life science and the precision synthesis and the high-purity chemicals and the regenerative medicine and cell therapy, it seems that there's little synergy between the other businesses. Is there bioagro? Not much synergy there, but the IT-related Chemicals, for example, film, IT-related Chemicals, semiconductor and display, it's a key technology. It is strongly linked with petrochemical. From that raw material, we produce films or coating. So there's linkage there. But the precision synthesis and bio, you are right. Thank you very much. Thank you. I look forward to your reasonable decision and your upgrading of your business. Thank you very much, Yamada-san. Next from SMBC Nikko Securities, Mr. Miyamoto. Thank you. I'm Miyamoto from SMBC Nikko Securities. Thank you for your presentation. On page 33 and 34, I want to ask questions on growth strategy. As for the details, I hope I can hear for your business briefing, but related to M&A, you mentioned about agro. You referred to M&A in Europe. The new Pharma, South American business was acquired before, which was a scale of less than JPY 100 billion. Is that the scale that you assume? What is the overall image of M&As? And for ICT, you say great shift of portfolio. The polarizing film business, a peer company is trying to sell that business. So what is your view about the polarizing film business? What is your view about this business? The first point. In the crop protection chemicals centered in Europe, M&A, in particular biorational business. I'm not specifying any actual company, but generally speaking, in biorationals, there are not major large companies in this industry. Large scale company of a level of JPY 100 billion, they do not exist in terms of a size of a deal is not that large. If you combine several deals, it may be different, but we are not even thinking about combining several deals. So the level might be about tens of billions of JPY. And for polarizing film, in particular in China, panel manufacturers of China, there's an increase of such manufacturers in China. Chinese polarizing film manufacturers supplying to these companies are increasing, in particular for large displays. Competition, I know, is getting more severe. Centered on smartphones, OLED type, which are small in size and the technology, not LCD, but OLED. Centered on this, we intend to promote our optical business. In accordance with that, we are suddenly proceeding with a change in organization in Japan, South Korea, and Taiwan. Large scale lines have been shifted to smaller size products. We are steadily proceeding with that. As a part of such efforts, what is the best format in China? We are also considering that. We hope we need a little more time. Yes, thank you. M&A for agrochemicals in Europe, rather than to increase footprint, it is mainly to approach biorationals or for R&D purpose. Yes, that is one reason, but also in Europe, presence of Sumitomo Chemical is not that strong in terms of our presence, not only the share, but governance management. Compared to other regions, we are smaller. So I think it is possible to enjoy synergy. It is up to the counterparty. I understand. My second question is about the dividend. On page 12, you said your aim at more than 24 JPY per year. And it says here previously it was 24 JPY, and corporate income at that time was about 235 billion JPY. And if it is 100 billion JPY, you have to have performance for the next fiscal year. It may take time to reach a profit level that you can provide 24 JPY. 24 JPY. Is it possible to achieve by 2027 to have a next medium-term plan? Not only improvement of income, but are you also trying to raise the payout ratio? What's the background of trying to achieve ¥24 per year? What is the probability of achieving ¥24? It's very difficult to say. 30% dividend payout ratio is our basic stance. Looking at the data, there are many years that the level was higher than 30%. So it looks as if the minimum level is 30%. So the basis of a dividend payout ratio is 30%. And core operating income JPY 200 billion, then net income is about 70%, JPY 150 billion. And core operating income, if it is at a stable level of JPY 200 billion, then ¥24 is not a mere dream. This is something that we can aim for. We are aiming at more than this level. It is more than JPY 200 billion based on 30% rule. It is possible to have a higher dividend. I understand. Thank you very much. Thank you, Miyamoto-san. Next, Daiwa Securities. Mr. Umebayashi, please. Thank you very much. This is Umebayashi from Daiwa Securities. I have two questions. First is the latest financial results, ICT, the IT-related Chemicals in first Q1 and Q2 and first half and second half. The changes there. Q1 and Q2 was flat on a profit basis. So what was displayed on a Q-on-Q basis? So if you could give us the status there. And from the first half to second half, FX, yen appreciated by around ¥8, but profit will go down by 50%. So from first half to second half, display and semiconductor, what is the image of the volume? Thank you. In ICT, we have semiconductor and display. There are two main groups. For semiconductor, FY 24, first Q1. From Q1, the market is coming back again, picking up chemicals. Regardless of the utilization rate, there are materials that we need stability. So the utilization rate and the sales are not directly linked, but resist is strongly correlated with utilization rate. So as time goes by, resist sales is becoming stronger. Of course, some clients are fast, some clients are still struggling. And so depending on which raw material we supply to, it depends. But in general, as time goes by, semiconductor is becoming stronger on a QoQ basis. Display, on the other hand, has seasonality. And in the end, it's the Christmas season. So how we ramp up towards Christmas season is the key. After Christmas season, sales season, January-March quarter, by October, we will complete for the Christmas season. And so October, December, January, March, display in Q3 and Q4 have low financial results. So this year in IT-related Chemicals, first half display was strong. It was record high, but in the second half, it's not a reactionary fall, but there's seasonality and we will see lower numbers in the second half. So that is the general situation. Thank you. So from the first half to second half, will decline, but you are looking at the decline in display. And in semiconductor, volume-wise, it should not drop much. You're right. Thank you very much. My second question is on the Keiyo Ethylene reorganization that you announced the other day. So as much as you could share information with us, according to what's disclosed, so 3EP and 4EP of Keiyo will be consolidated. So given the age of the plant and the size, the older, smaller size EP will be closed and will be consolidated to 4EP. I think that is the general trend or the flow. What I want to know is the timing. According to the mass media, they said FY 26, as early as 26, but Maruzen Petrochemical's next scheduled planned shutdown is four years later, and Keiyo Ethylene is FY 26, two years later. So 3EP of Maruzen is going to be closed on that basis, FY 28 scheduled shutdown. It's more understandable. If it's FY 26, I'm not sure if you can make it in time. I know this is not decided yet, but if you can do it in 26, Idemitsu is taking three-to-four years. If you can do this in such short time frame, what is the background? Nothing really has been decided yet, 3EP, 4EP, which will be what has not been decided yet, it's not us that decide. Maruzen Petrochemical will decide, and then think of what to do with Keiyo Ethylene, that's the order, we're before that. So the scheduled shutdown in which year has not been discussed yet. So that is subject to our decision, discussion going forward. Thank you. One related question on your thinking. Singapore, compared to Keiyo, compared to Japan, olefin, polyolefin, it is still slow. But in the future, when the capacity in Japan declines, will you bring the product from Singapore to Japan? Is that an option? So the progress in Singapore, compared to Japan or Saudi Arabia, is slow. You're right. And we are trying to aggressively push this forward. So as an option, can we bring Singapore monomer to Japan? Depending on the grade of polyolefin, yes, it's possible. But we cannot bring a large volume to Japan. The scale will not be that large. But we have not done a full-scale study on that. So it's still early to make a decision or come to a conclusion. Thank you very much. Thank you very much, Mr. Umebayashi. So next, Nishihira-san from Okasan Securities. Thank you. I'm Nishihira from Okasan Securities. I have one major question. In terms of selection and concentration of business areas, Advanced Medical Solutions for CDMO and Pharmaceuticals, I understand the point that you mentioned, but looking at the trend of other companies in this business area, to keep achieving appropriate level of profit seems to be difficult. There is also a lot of CapEx needed, depending on whether it is possible to get bigger projects that may affect the performance. So do you consider this to be an attractive business sector, and do you believe you can win in this sector? And about ICT, the electronic materials, are you going to look for an exit in terms of selection and concentration? From that perspective, could you tell me? Thank you for your question. For advanced medical, CDMO and regenerative cell. Well, after 2030, I believe regenerative cell will come in a full-fledged manner. Until then, about JPY 10 billion will be needed for development. But I think that is for the future. Within Sumitomo Chemical Group, we want to develop this business sector. Organization may change. Pharma and Sumitomo Chemical jointly. We'll keep developing this business. And for CDMO, Sumitomo Chemical is being engaged in this business for a longer term. This was called custom synthesis before. This is a CMO. We are ordered to do this business, but now it is CDMO. In case of CMO, it is true that we manufacture based on orders. So it may not be that profitable if there's profit. The counterparty will be manufacturing by itself. So it's not such an attractive business as a business model. But now with D, in case of CDMO, it is possible to differentiate, and also engagement with the customer will be deeper. It's not only to manufacture based on the orders by the customer. It's no longer such a relationship. CDMO is an area that it is possible to enjoy profit. But in that case, then what is D? Most of the D is done by the pharmaceutical companies. As a chemical manufacturer, how can we contribute to the D? You must think in depth about it to make it a profitable business, as you have mentioned. And in case of CDMO, we are engaged in small molecules for a long time, but we are not engaged in antibodies. CDMO of antibodies, many companies are entering the sector. That is the situation. So nucleic acid, the most advanced areas, and regenerative cell, CDMO, that is a very niche area. The customers are mostly the academia and the startups. That is a type of CDMO that we are starting, and the academia of our startups, when this turns into drugs, as they say, this will be a big business. That is the type of CDMO that we are starting with. This is a difficult path, but this is something we want to try. Thank you very much. In case of battery materials, what is the situation? For battery materials, this is also a difficult area. For cathodes, we tried very hard, but as a latecomer, we were not able to have a unique technological development. So we gave up, so that is an area very difficult, cathode materials, but the next generation, solid or the soft materials for batteries and direct recycle for cathodes, we are developing next generation for the surrounding materials. But for the actual cathode materials, it is no longer our domain. And for separators, base films, we gave up base films at an early stage. And for coating, we have a business model for coating. This area doesn't need so much CapEx. It is possible to increase capacity by increasing the line. So there's not so much risk. It's possible to increase the line if a business increases. I don't know how long this will continue, but for instance, companies like Asahi Kasei, which is investing a lot of resources to separators, it's not like that. We have to think more about our engagement. That is all. Thank you. We still see some more questionnaires, but we've come to scheduled time. So with this briefing, we would like to bring this to a close. Thank you very much for your attendance. Thank you.