Good evening. Welcome to Earnings Conference Call of Mitsubishi Chemical Group Corporation. We will now start the conference. First, CEO Jean-Marc Gilson will deliver the opening comments, followed by a presentation by CFO Yuko Nakahira on the results for the second quarter of the fiscal year ending March 31st, 2024. This will be a one-hour conference call, including the Q&A. Before we start, please note that the forward-looking statements are based largely on current company expectations and information, and are subject to risks and uncertainties, and that actual results could differ materially due to numerous factors. Also, please be advised that today's conference call, including the Q&A, will be recorded and uploaded to our company website. Jean-Marc, the floor is yours. Konnichiwa, and welcome to our Fiscal Year 2023 Second Quarter Earnings Presentation. My name is Jean-Marc Gilson, and I'm the CEO of Mitsubishi Chemical Group. Like usual, I will make a few introductory comments before I hand it over to Nakahira, CFO, who will conduct a detailed review of our results for the second quarter. Let me start. Two years ago, we shared with you our Forging the Future strategy. And again, as I shared with you about two weeks ago during our IR presentation, we can summarize this strategy through two words: first, fix, and then grow. I think this quarter, and for the first half of this year, you saw the results of our relentless implementation of the strategy. After a very strong turnaround, our gas and healthcare business delivered very good results through a mix of cost savings, pricing actions, and volume growth. Our Performance Products and MMA business showed positive Core Operating Income, despite extremely difficult trading conditions. As I shared, all of our attention is now directed at turning around these two businesses. The last quarter results also showed signs that our petrochemical business is turning the corner. Overall, as a company, we beat our first quarter forecast by about 10%. Most encouraging is the fact that our discipline is bearing fruits. Our cost savings reached JPY 54.2 billion in the first half of this year, largely on track to achieve JPY 80 billion by year-end, as promised. Our free cash flow reached JPY 800, and that is a result of solid results and high discipline in working capital management. And last but not least, our net debt ratio decreased by 0.11 points to 1.22. As we look into the rest of the year, we will maintain our JPY 2,500 guidance, even though the contribution of each business, that results will be different than initially envisaged. But more importantly, we are expecting in the second half to have all of our business segments to deliver positive Core Operating Income. In summary, more than ever, our team is determined to create value through the implementation of our Forging the Future strategy. Thank you for your attention, and let me now hand it over to Nakahira, CFO. Good evening. This is Nakahira, your CFO. Let me present the first half results for FY 2023. Severe business environment continues, but sales revenue decreased 5% year-on-year, and amid that, core operating income fell only 2% year-on-year. This is because of price management activities and cost structure reforms. The core operating income outperformed the initial forecast for the first half, which was JPY 108 billion by JPY 11.6 billion, or 11%. Sales volume declined significantly in special materials and basic materials. There was retreating demand in the semiconductor market and broader industrial materials. For basic materials, we recorded inventory valuation loss of JPY 7.2 billion, mainly due to falling raw material prices. It pushed down the income figure by JPY 33 billion on a year-on-year basis. Core Operating Income was boosted by continued brisk performance of industrial gases, significant growth in sales of RADICAVA in North America in healthcare, and cost structure reforms implemented in the previous fiscal year. Cost structural reforms achieved a reduction of JPY 54.2 billion in the first half this year, which is already 68% of the group-wide target of JPY 80 billion for the full year. Net income attributable to owners of the parent was down 9% year-on-year. However, it exceeded the initial forecast for the first half of JPY 43 billion by 56%. Going on to the forecast. Core Operating Income in the first half exceeded forecast. However, given that we expect continued lack of strength and recovery in the second half, the full year forecast remains unchanged. We have upward revised the forecast for operating income, net income, and net income attributable to owners of the parent, as we expect to record special items related to business divestiture. We plan to continue to steadily implement measures to achieve financial goals in line with the management policy, Forging the Future and associated action plans. In the first half, the exchange rate averaged at JPY 142.6 to the USD. The yen was weaker by 5% year-on-year. The price of naphtha was JPY 65,500 per kiloliter, down 22%. Sales revenue came to JPY 2,149.9 billion, that's down 5% year-on-year. Core Operating Income came to JPY 119.6 billion, that's down 2% year-on-year. Compared with the forecast that we announced on the 12th of May, sales revenue fell short by JPY 71.1 billion, but core operating income exceeded the figure by JPY 11.6 billion. Special items came to JPY 19 billion, and operating income came to JPY 138.6 billion, that's up 17% year-on-year. Financial expenses increased due to the higher interest rates on euro-based liabilities, and income before taxes came to JPY 130.2 billion, that's up 7% year-on-year. Net income attributable to owners of parent came to JPY 67.2 billion, that's down 9% year-on-year. The initial forecast was JPY 43 billion, so we actually exceeded that by JPY 24.2 billion. Now, the breakdown by business segment. For specialty materials, revenue was down 7% year-on-year. Core Operating Income was up- was down rather, 61%. The demand was slow, and the business environment continues to be challenging. But in the first half, all three sub-segments were profitable. Industrial gases continued to be strong. Revenue was up 7% and income was up 48%. Healthcare, the RADICAVA sales in, RADICAVA ORS, ORS sales in North America continues to be strong one year after the launch, and new adoptions are there. There's an additional contribution from cost structure improvement. Revenue was up 8%, and Core Operating Income was up 7.2 times. MMA revenue was down 17%, operating income was down 65%. MMA had been in a loss since the Q3 of last year, but in Q2 this year, turned profitable. The first half results were a positive income of JPY 1.7 billion. For basic materials, demand remained sluggish, and this time we had the recognition of inventory valuation loss in the amount of JPY 7.2 billion. The operating income was a loss of JPY 12.6 billion. That's down by JPY 30 billion, and 15% decline was seen in revenue. Of the operating income, JPY 33 billion was the impact of valuation of that inventory. This is the analysis of Core Operating Income, which declined by JPY 3 billion year-on-year. Quarterly figures year-on-year in Q1, the figure came down by JPY 21.3 billion, but Q2 was up JPY 18.3 billion, so we are closing the gap. The price differential had a positive impact of JPY 34.5 billion. Price management activities are continuing group-wide, and there was a good contribution, particularly for specialty materials and industrial gases, and the Core Operating Income benefited from that. For the volume, because of slow demand continuing, there was a minus or negative impact of JPY 26.9 billion. Cost reduction contributed in the first half for JPY 54.2 billion. In Q1, the figure was JPY 23.6 billion. The Q2 figure was JPY 30.6 billion. The full year forecast or target is JPY 80 billion, and we are already at 68%. We will continue efforts in the second half so that we can go beyond the target figure. The others include that JPY 33.3 billion impact of inventory valuation difference. For specialty materials, operating income fell by JPY 26.5 billion. The price factor was positive by JPY 20.8 billion. Demand was slow, but we conducted price management, and for all the three segments, we were able to minimize the impact on Core Operating Income, but there was a big impact from the volume, and that was because of the demand. For polymers and compounds, for the demand for additives, widely for coatings, ink, and adhesive remained slow, and then in Q2, the demand also slowed down for barrier material. But then, there is a recovery for use in automotive applications. For films and molding materials, the applications for display, the demand is recovering, but still slow with regard to volume compared with the same period last year. The high-performance engineering plastic for semiconductors or the label liners for Europe and North America, and carbon fiber demand for use in wind farms and sports, they are all slow in demand. Although we have some strength for use in medical and EV battery tanks. For advanced solutions, this was heavily impacted by the slow semiconductor market. For all the three segments, currently, we are trying to maintain margin and cash and prepare for demand recovery. With regard to portfolio reform, we have already announced the transfer of Qualicaps and the additional acquisition of CPC shares, and we are trying to follow up or follow on with more. Industrial gases segment remain to be strong. Operating income increased year-on-year by JPY 26 billion. Because of the business environment, volume is not growing, but we are implementing price management and productivity improvement to all the regions have contributed to core operating income increase. For healthcare, core operating income increased year-over-year by JPY 27.9 billion. In North America, the RADICAVA ORS is greatly contributing to volume growth. And the decisions made in the previous year, such as the exit from Medicago and the review of development portfolio and the consolidation of locations, all those cost structure reform efforts are now contributing. MMA was down by JPY 3.1 billion. The monomer market is down year-over-year. Volume is actually up year-over-year. Overall, the environment appears to have bottomed out, but the recovery going forward should still be gradual. For basic materials, operating income fell by JPY 30 billion. We are reflecting the cost increases to prices, and the lag in timing for revision to polyolefin prices meant that the price factor was a positive. But because of slow demand and the inventory valuation loss pushing down figures by JPY 33 billion meant that the core operating income had to go down. In the second half, we only expect slow demand recovery, but the inventory valuation should not be that bad. Now, on a quarterly analysis. For core operating income in Q1, the figure was JPY 50.8 billion. Q2 was JPY 68.8 billion, so that's up JPY 18 billion Q-on-Q. For specialty materials, the demand remains slow, and therefore, Q2 was down compared with Q1. For industrial gases, price management contributed, and the results were solid. For healthcare, sales increase in North America from RADICAVA and the sales of the flu vaccine contributed, and Q2 operating income increased by JPY 12.4 billion from the previous quarter. MMA benefited from the price factor because of the low feedstock prices and turned profitable. Basic materials did get an impact of the valuation of inventory, but there was a less impact of the maintenance turnaround and disruptions in petrochemicals. Special items resulted in income of JPY 19 billion. In the second quarter, we had income from divestiture and costs and expenses related to business exits. Net result was an income of approximately JPY 100 million. Regarding cash flow, operating cash flow was an income of JPY 195.7 billion. Investment cash flow was an expenditure of JPY 115.6 billion. Free cash flow was an income of JPY 80.1 billion. Last year, free cash flow was -JPY 24.5 billion. Over the past year, we have made cash management a company-wide priority issue and have been implementing disciplined management processes, developing tools, and providing training. As a result of our employees' sincere efforts, improvements are beginning to bear fruit. We will continue to promote this to achieve our target level. Financial cash flow was an income of JPY 6.5 billion. Total assets were JPY 6,119.7 billion, an increase of JPY 345.4 billion from the same period last year, of which JPY 270 billion was in relation to foreign exchange changes. Total liabilities were JPY 3,911.6 billion, an increase of JPY 125.7 billion year-on-year, and total equity was JPY 2,208.1 billion. The net debt ratio was 1.22, an improvement from 1.33 at the end of the previous fiscal year. Next, full year earnings forecast. The forecast for the second half assumes the exchange rate of 145 yen to the U.S. dollar and the naphtha price of JPY 75,000. Full year revenue is expected to be JPY 4,455 billion, a 2% decrease compared to the initial forecast. Core operating income remains at the initial forecast level of JPY 250 billion. Although our first half performance exceeded our forecast, we continue to see no strength in the recovery from the sluggish business environment. So we are keeping our full-year forecast in line with our initial forecast. Special items are expected to be JPY 45 billion, an improvement of JPY 56 billion from the loss of JPY 11 billion forecasted at the beginning of the fiscal year, due to gain on the sale of Qualicaps and gains on step acquisitions related to the acquisition of CPC shares. As a result, operating income has been revised upward to JPY 295 billion, profit before taxes to JPY 263 billion, and profit attributable to owners of the parent to JPY 135 billion. This is the forecast by business segment. Specialty materials profit is expected to be JPY 35 billion lower than the initial forecast. The main factor is the recovery in the display and semiconductor markets in the three sub-segments being weaker than originally expected. Industrial gases are expected to increase profits by JPY 28 billion. In the healthcare segment, profits are expected to increase by JPY 38 billion, reflecting the continued strong performance of RADICAVA in North America. MMA's profit is expected to decrease by JPY 5 billion, as the recovery in demand and market prices is weaker than expected. For basic materials, although the recovery in demand is weak, return to profit is expected in the second half due to improved inventory valuation, gains and losses, and reduced impact of maintenance turnaround and disruptions. But full year profits are expected to be JPY 27 billion lower than the initial forecast. Lastly, but not the least, about the dividends. The board of directors resolved today that the forecast interim dividend per share be raised to JPY 16, a JPY 1 increase from the year-end dividend for the fiscal year ending March 2023, as announced on May 1st. Additionally, the year-end dividend forecast will be JPY 16, the same as the previously announced amount. That concludes my presentation. Thank you for your kind attention. We will now take questions. So first from Morgan Stanley MUFG, Watabe, please. Good afternoon, this is Watabe from Morgan Stanley. Thank you very much for the presentation. Given this environment, you have good results, and you are up while revising your forecast, so that's great. First, on specialty materials. You have two segments that have quarter- on- quarter decline, but then in the second half, it appears that you are expecting a recovery. Can you explain why the Q-on-Q figure is down, and why you're expecting a recovery in the second half, please? Thank you very much for the question. So compared with Q1, Q2 is down, but then actually, Q4 was the bottom, and compared with that, Q2 is actually better. So overall, there is an upward trend, but then compared with Q1, the Q2 figures are down. Well, actually, between Q1 and Q2, if you look at Core Operating Income, Specialty Materials, in reality, hasn't really changed. That's our view. So the market condition-wise, the automotive market is recovering, starting from Q1 and continuing into Q2. Semiconductors, no. But displays, perhaps until August of Q2, there was some recovery in the Chinese TV market, and so the benefit was there. But basically, the difference between Q1 and Q2 isn't a major difference. And if you look at the first half and the second half, and our view, actually, again, we are not expecting much of a market recovery. It's more about our efforts on pricing and cost management. And so effectively, it's like gap filling, for the most part. But at the same time, towards the second half, we do see some businesses improving, like our barrier packaging materials, carbon fibers, for which we expect some recovery towards Q3 and Q4. But with regards to our outlook, we are not really expecting a big positive or uptick in Q, in the second half? Particularly for films and, moldings, we do expect, an improvement. That's because, for example, for polyester films, the business was very, weak for label liners, and that's recovering. But overall, it's not that we are expecting a major difference or major improvement, at least not at this point in time. The recovery we expect or we anticipate would be, only weak and gradually. But your inventory is now smaller, so in Q2, maybe the utilization was down, but in the second half, there will be recovery there. Right, that is also a factor, and we are continuing efforts, and we're also working on pricing. Some of the feedstock prices are coming down, so there is some downward pressure on pricing, and we are trying to fight that and maintain margin. Thank you very much. Oh, I actually had to have two in one question. So the second question is about MMA, and this is turning profitable in Q2 against this environment, so I'm kind of impressed. So you talked about feedstock prices coming down. What about capacity utilization, and what do you expect and assume for the market and overall business environment, please? Thank you for your question. This time, the profit, the turning to profit is, as you explained, the prices remain depressed, but the margin or price difference with the feedstock is more favorable for us. In addition, to be honest, last year, we decided on the closure of the Cassel Works, and we are now without those associated costs, and that's has been the case from Q1. With regard to China, there's some household appliances recovering. We hear stories like that. But then, as with the case with specialty materials, we're not expecting that strong recovery. And with regard to, pricing, we hope that the prices can be higher in Q3, maybe around, $1,650, and Q4, $1,700, but then we don't really know. So for MMA, we are not really expecting a strong recovery. Thank you very much. The third question is on pharma. So RADICAVA is further growing further and doing much better than expected. Why is that the case? And can you tell us about, what's happening with Mounjaro now, perhaps briefly? Thank you very much. This is Tsujimura speaking. Thank you very much for your question. First, on Mounjaro. Yes, it's been steady since its launch. New adoptions continue at hospitals as we expected, and so, it is going very well. RADICAVA in the United States, the RADICAVA ORS was launched in the United States in June 2022. In the same year, in October, a competitor drug was also launched. We had anticipated the impact, and we were quite conservative in our assumptions. The initial target was for ALS surgeons specializing in ALS, but we actually expanded our breadth, and we are actually targeting the neurosurgeons more widely, and that has proven positive. Once the patient is diagnosed with ALS, we want them to be able to have access to RADICAVA as soon as possible. We have been trying to educate and promote the drug to more people. Those activities have also borne fruit. Thank you very much. Thank you. Next is Miyamoto from SMBC Nikko Securities. Thank you for your presentation. Miyamoto from SMBC Nikko Securities. I also have two questions, plus one on pharma. First, about pharma, regarding Mounjaro, it's a limited shipment today. Going forward, with further supply capability, could you not sell more? So, would that be a factor for the upward revision? And for RADICAVA, do you expect further momentum going forward? Initially, you had patents for the injection type, so can you talk about the projection for next fiscal year? First, Mounjaro. Limited shipment impact on sales is limited. That's not a big factor, in other words. Currently, lifting the limited shipment is not yet clear. With Eli Lilly, in many ways, we are engaged in various consultations. We're hoping that we can shift to the normal shipment as quickly as possible. As for RADICAVA initially, the injection type, in 27 August launch, and then in June of 2022, the oral formulation was launched. That transition was very successful. More than we had expected, transition progressed. The ALS patients go to hospitals and get the intravenous injections, and that was too cumbersome, both for the patients and their families. Whereas with this oral formulation, 5 ml per dose. With the oral formulation, patients and family are seeing the burden on them being relieved very much, and that is having a major impact, and I think that is resulting in this quick expansion. For next fiscal year, through many different activities, we would be promoting this product to maximize the value of this product. Thank you. How about Mounjaro? It's not part of your upward revision. It's not a factor? Mounjaro is not a major part of the major factor for the upward revision. I see. Thank you. My next question is on specialty materials. Full year, JPY 35 billion, downward revision on the full year basis. You talked about the slow recovery in display and semiconductor market. I'm looking at page 39. Compared to the previous forecast, in addition to display and forecast, I'm afraid you are downward revising the industrial, consumer, and construction applications as well as EV and mobility. Could you elaborate on that? Thank you for your questions. Industrial consumer goods, building and construction is rather broad, and there are some others as well that are common to different segments. That's part of the reason, but, more practically in Europe and North America, things that are related to consumer goods are weak and construction as well. Paints and adhesive agents, you know, we are supplying to many different applications, which are all weak. As for EV and mobility, overall, our business is, rather steady. And in fact, in many different business areas that we are in, within the specialty materials, the automotive related, business, is all doing very well. As for automotive applications, EV and mobility, how about the impact of, strikes, the labor disputes, with UAW? Yes, some impact, but much smaller, than we had originally anticipated. I see. Thank you. My third question is on MMA. In February, maybe this is for February, strategic portfolio reform. What is your current plan, and how about the investment for expanded production in Louisiana and the U.S.? Anything, any updates? For MMA, the market situation is not strong right now, and therefore, in this environment, we want to be profitable as much as possible, and we are implementing various measures for that purpose. Last year, Kashima factory was closed, and in addition, we will continue to implement structural reform so that regardless of the environment, we will be profitable. We want to be in that regime. As for the investment in the U.S., we are continuing to look into that possibility. In the state of Louisiana, currently, there are many permission-related procedures that we are waiting for. For example, the environmental assessment and others. We are filing accordingly, so we're waiting for the permits to be granted. Until those permits are obtained, we can't really finalize our decision on this big investment. So, the limiting factor is those administrative affairs, and we'll continue to address that. In the industry journal, I think you made a comment that MMA would not be excluded from your business portfolio transformation, so MMA could be a candidate? Well, as mentioned at the very outset, fix and grow policy is being applied to all areas. And so in MMA, we are working on that as well. On a broader terms, as a corporate going forward, what will be the state to be is our starting point, looking at all business areas. So operation and the overall strategy, I'm afraid are different. We're talking about different layers. Got it. Thank you. Thank you very much. Next, from Daiwa Securities, Umebayashi, please. Thank you very much. This is Umebayashi speaking. I also have two + one questions. First, on basic materials, particularly on petrochemicals. In the second half, at JPY 7.5 billion, is your forecast for a Core Operating Income, which is, recovery or improvement from the first half? The disruption at Kashima, the disruption impact will be lost, and then in the first half, you had the inventory and, that was, expensive, but, in the second half that won't be the case. Or would there be other factors such as higher capacity utilization or improved market conditions? Could you explain that, please? That's my first question. Thank you very much. First, on the demand side, we don't expect a major improvement. For the second half, the recovery or the improvement is due to two factors. One is about inventory valuation difference. In the first half, this was a negative factor, but in the second half, that will be a positive factor. The naphtha prices are higher. Then another factor is that the maintenance turnaround and the disruptions in the first half, the impact of those would be gone in the second half. And obviously, we need to monitor the naphtha prices going forward, but we are actually taking a quite conservative view on our forecast, so the figures should be solid. Thank you. My second question is a similar one. For carbon products, Q1 and Q2 was struggling, but then you are expecting profit of JPY 100 million. So why is that? How is the market in your view? Why would the second half be better? Thank you very much. With regard to carbon products, for a while, our markets had been depressed and we had been seriously affected by that condition. But now, well, actually, Q3 will continue to be challenging with regard to the environment, but then, from Q4 and onwards, in China, we believe that the coking capacity would go down and the supply-demand balance would be improved. And that's how we came up with this forecast. In addition, in Q3, until about this time of the year, the coking coal prices had been quite high, so our margins were squeezed, but that should be gone going forward. So those are all factored in. I see. Thank you very much. Now on pharma, just seeking confirmation here. So if you could go to Slide 35, and you are looking at SG&A here, and the development expenses, RD expenses. Compared with the previous forecast, the RD expenses are slightly up, but the SG&A expenses overall are to go down. So there must be SG&A expenses reduced other than RD. So is that something that you did intentionally as part of your cost reduction initiative? Thank you very much for your question. Yes, this is intentional. We are really working hard to contain SG&A. Thank you very much. Okay, so that would mean going forward in future years, this could also happen? Well, you know, if there's a new product about to be launched, there will be a necessary SG&A, and we won't shy away from spending there. But there are other parts where there could be measures to optimize the expenses. It's not just MTPC, but the whole of the MCG would go with that, as we heard from Jean-Marc and Nakahira. It's a group-wide initiative, and so we will continue with this effort. Thank you very much. I'm looking forward to all that. That's all from myself. Thank you. Thank you very much. Next is from Nomura Securities. Okazaki, please. Thank you. Okazaki from Nomura. Hope you can hear me. Yes? While many things are uncertain, congratulations on very positive cash flow. I have two questions, plus one on pharma. One, specialty materials. Slide 26, second half. You're thinking on second half. Nakahira, you talked about a recovery in the barrier of packaging materials, but on the slide it says the soft situation will continue. So can you explain that? And as for LCD, for OP film, for example, what are the assumptions for the second half? And also for F&M, the performance engineering plastics, you're expecting recovery. How likely is that? I know automotive is strong, but medical and maybe semiconductor, you're not expecting recovery. So can you give us the details? Okay, thank you for your question. The packaging and materials. In the second quarter, slight decline, and for Q3, we are expecting a slight recovery from that low Q2 level. That's what I meant. So for first half versus second half, well, since Q1 was strong, given that, maybe not much difference between the first half and the second half. Overall, packaging materials, pretty good, with good margin. But, demand, has been strong, but in the second quarter, that came to a halt, so we are a bit worried about that. But compared to that, we are expecting some recovery. That's for the packaging materials. As for OPL Film, since the beginning of this fiscal year, the large, flat, TVs, LCD, panels, had some movement, but, since August, September, that has halted. So for the second half, in terms of sales volume, we don't expect the same level as in the first half. And performance engineering plastics, semiconductor not likely to recover, so that is the basis of our projection. But for instance, in the U.S., in non-semiconductor areas, we expect the third quarter to be the bottom. And as for Europe, some recovery trend continuing. As mentioned earlier, medical, pharma use, and battery pressure tank, these were strong. And in addition, in Europe and North America, some signs of improvement, but not a strong one. I see. Thank you. A follow-up question. Soarnol and optical OPL, especially Soarnol. It's been speculated that your competitor is encroaching your market share. So, is that a market factor or is it a competitive factor? Well, overall, this is strong, but if you look at the details, in terms of pricing to reflect higher material cost, for those factors, in terms of overall demand and supply, the tight supply is, still, the macroscopic situation, so we don't expect... We, we're not, feeling that we are losing the market share. Same for OPL Film? Yes, same. When our panels get momentum, we should see the sales go up. Second question on healthcare, RADICAVA. The competitive products are on the market, and yet you expect the high level to continue next fiscal year. Would that be a fair statement? Also, looking at Page 29, EBITDA margin is being shown, and the target for the year ending March 2026 will be achieved this year. Is this thanks to a very strong performance of RADICAVA? So for next fiscal year and year after that, what is your projection? Anything you can share about this future projection? Thank you for your questions. RADICAVA, for next fiscal year, we expect the situation to continue, since we were continuing the programs and the measures that we have been implementing. But there are competition, and we will be keeping a close eye on that. We will be implementing various measures to maximize the product value. For fiscal 2025, we need to invest in R&D in this business to manage the pipeline altogether. That's critical. So investment and return, the balance between the two needs to be carefully looked at, and the EBITDA that we are committing to FY 2025, we'll be making every effort to achieve that. Compared to some time ago, at the initial, maybe 15% EBITDA for FY 2025 will be difficult, was what you indicated, but now, you're becoming more optimistic, correct? Well, we would not be complacent with that. Thank you. My third question. In the market, Ozempic, the diet drugs, but a GLP drug, the competition, and the actions that you are taking? Mounjaro. Regarding Mounjaro, we are seeing the product being ramped up as expected. Globally, as you said, GLP-1 receptor agonist is growing in number, but type 2 diabetics. Indication for that, we are making new promotions to promote Mounjaro. So, there is some impact of limited shipment, but including that factor, we would like to respond to the situation squarely together with Eli Lilly. Got it. Thank you. Thank you very much. Yamada from Mizuho Securities, please. Good afternoon. This is Yamada from Mizuho Securities. I have three questions, including a question for healthcare. My first question, someone talked about SG&A and R&D expenses increasing. In your case, the R&D currently is mostly spent outside of Japan. If that's the case, and if your yen to the dollar rate has changed from 135 to 145, that would mean the R&D expenses are actually quite squeezed. Usually in the even quarters, you will have more R&D, but if you think about the exchange rate, the effective R&D expenses are actually not increasing. Obviously, there you have to think about the progress in trial, and you are done with NeuroDerm. And so the expensive ones are gone, and so that's maybe just down for temporary reason. But then if you have MT-7117 or 0551, there will be more activity there, particularly for 7117. So do you actually expect an increase there for R&D, and have you budgeted for that? Or is it possible for some structural reduction of R&D or pre-phase 1, preclinical trial? Are you kind of perhaps holding some of such activities off? Can you tell us about the R&D strategy in line with those figures? Thank you very much for your question. For next year and onwards, depending on the pipeline progress, the R&D expenses will be spent as appropriate. As you rightly mentioned, this time, ND0 612 development has, you know, passed a certain phase, so it's not that big now, and so the numbers are coming down there. But the largest factor is really the Medicago that we decided to halt and exit, and that led to a lot of expense reduction. With regard to pipelines, from next financial year and onwards, if you want to grow business in the United States, you would really need to have the right pipeline, and we are reviewing our current pipeline. With that, we are also thinking about resource reallocation. That probably shouldn't need to lead to a sudden increase in R&D expenses. We obviously need to manage the overall figure appropriately as well. So with regard to the Medicago and the impact, that's about $250 million. So on a quarterly basis, that would be like $60 million or $70 million, and then you have some grants. So that was my ballpark figure. Would that be correct? And then for preclinical and phase I and licensing in, that won't be in this list. Do you have a good pipeline that's not showing up here? With regard to Medicago, I think your assumption is right. Correct. For preclinical activities, my view is that we do have something pretty good. Obviously, it's about pharmaceutical R&D. You have to be mindful of the success probability, so we are actually trying to get more in the preclinical pipeline. And so including business development-ish activities, we are thinking about increasing our activities because if you want to be successful in the United States, you need that scale and bench strength. And so area-wise, immunization and circulation are those the focus areas? Yes. So our focus areas are central nervous system, immunoinflammation, and oncology, which is just in Japan now, and we will continue to focus on these three areas. Oncology remains there. With regard to oncology... I like your questions. Very good questions. You know, there has been one progress, one step forward with regard to our oncology activity. We are also monitoring the preclinical landscape and to look at the resource allocation as well. As you are well aware, the oncology field, we have new modalities coming one after another, and so if you want to be serious, you would obviously need a lot of investments. So we will obviously have to consider that over a longer term and the contribution to our earnings figures. Okay, thank you very much for all that. Now, my second question, that's on specialty materials. So I understand that the external environment is not so good. Yes, I do appreciate that, but at the same time, your specialty materials business is about food and medical, which are relatively stable. Should be relatively stable. And nevertheless, if you look at the overall picture, there appears to be a major decline. So you talk about the business portfolio reform, and back in February, you made this presentation, and so are you doing that to reduce that or more of your exposure, or do you actually have some improvement measures under the sleeve that you are implementing? So with medical and digital, you mentioned that you are going forward for very proactive about M&As, but what about construction materials and industrial materials and EV? What are you not thinking about you know exiting and adding new businesses, et cetera? What about your portfolio idea for specialty materials? Okay, actually, if you could turn to Slide 39. The obviously we would want to focus on medical and food, which are less susceptible to cyclicality, and that's what Randy mentioned earlier in the Investor Day presentation. As of now, as you can see from these figures, EV, digital, those areas, which are more susceptible to cyclical movements in the markets, those are actually larger in scale. And so we want to be more stable, and that's why we would want to increase the medical and food part of this list. So obviously we are trying to realize that. Unfortunately, we are not there yet. The percentage of these stable areas now is much lower, and so the digital market, the semiconductor market actually had a big impact on our results. But with all that, we talked about those four areas and how we're focusing on that, and we are also aligning our product line up, and we have identified where we are growing. So, we've been talking about, fix and grow, and specialty materials is in this fixed, fixing phase. That's part of that fixing involves the portfolio adjustment to make sure that we have good earnings capability and, growth capabilities as well. So as CFO, when you think about the portfolio change, like digital, medical, you're buying something, so that would be expensive, and then others will have to be sold off. But then, what you're selling, you want to... You will have to sell something that's attractive, otherwise it, it doesn't make sense. There's no balance. So as CFO, for basic materials carve-out, that will be at a loss, and then specialty materials, you will have some ins and outs and, that would be have an impact on intangibles. Financially, that won't be a problem? Well, for the second half forecast, we have looked at that, and the transfer of Qualicaps, that wasn't really about that business not being attractive and not performing, and we sell at a fire sale. We just found the best owner, and they were willing to pay the right price. And, so that was a positive. That generated income for us. And, we're trying to do it things that way. So selling or divesting business is not always at a loss, and buying a business is not always at a loss either. We are trying to sell high and buy low. But in the case of Qualicaps, you've done impairment, so obviously that should be beneficial. And you also have step acquisitions, but going forward, will that continue to be the case? Yes, we will make utmost efforts in that regard. Now, on carbon products, against this backdrop, I don't feel like you can find a buyer. But for the second half, you said qualitatively that you are confident about earnings recovery. That means you have high confidence, and you actually have a very good picture about a potential buyer. Well, there's not been much change. We are continuing the negotiations and discussions, and there's nothing to add from what we've already said. It's obviously a negotiation. We... Anything can happen, and if there is something that we can share with you, we will do so. But, aside from that, your forecast is that this business will turn profitable? Yes, that's our forecast. Thank you very much. I'm looking forward to that. Thank you very much. Now it's time to close the Q&A session. Before we close this call, I'd like to ask Nakahira for the closing remarks. The environment that we're in, very difficult, but we had been anticipating this from the beginning. And price, cost, cash, in those areas, we are promoting activities which are now showing effects, reflected in our financial results as well. And we will continue with these efforts. So Forging the Future will continue to be driven. Thank you for your participation. Thank you. This concludes the conference call, and today's call will be archived, and you can go back anytime. Thank you for your participation.