Good afternoon. Thank you very much for joining us for the earnings briefing for Q3 FY 2024 for Mitsubishi Chemical Group. We would now like to begin the earnings briefing. [Foreign language] 本日は執行役員最高財務責任者、木田。 Our CFO, Minoru Kida, will present the results for Q3 FY 2024. [Foreign language]その後の質疑応答を含め、 After that, we will take questions. This briefing is scheduled for 60 minutes in total. Before we begin the briefing, one note of caution. Today's briefing may include forward-looking statements based on information available to the company at the current time. They are all subject to uncertainties and risks. Investors are advised that actual results may differ. Please also be aware that this briefing will be recorded and made publicly available later on our website, including the Q&A session. With that, we will begin the briefing. I will give the floor to Minoru Kida, CFO. [Foreign language] 皆さん、こんにちは。 Good afternoon, everyone. This is Minoru Kida, CFO. Let me present results for Q3 FY 2024. First, the business environment. The environment during Q3 remained generally stable, with some different levels of strength in demand among regions and industries. Display-related sales continued to strengthen in the first half, in the second half too, thanks to subsidy policies in China. Semiconductor-related sales continued on a moderate recovery path driven by generative AI-related demand. However, sales were sluggish in some regions and sectors, such as automotive and food-related markets. In the chemicals business, chiefly for MMA and Basic Materials and Polymers, we saw year-on-year improvement in price gaps. For Specialty Materials, we saw improvement in sales volume. Group-wide cost reduction efforts achieved 87% against the initial four-year target. Sales revenue increased 3% year-on-year. Core operating income rose 34% year-on-year. Net income attributable to owners of the parent fell 43% year-on-year, mostly due to business structure reform expenses under special items. [Foreign language] Core operating income for the first three quarters came to 85% of the full-year forecast revised in November, showing steady progress. Q4, however, there are seasonal factors for Specialty Materials and pharma, and we are also expecting a prICIS gap for MMA monomer to decline. We, therefore, maintain our full-year forecast of JPY 290 billion. Net income attributable to owners of the parent has exceeded the full-year forecast, mostly due to the weaker yen, but we still maintain our forecast of JPY 52 billion for the full year, as several business structure reform projects are considered for Q4, which may involve one-time losses. The dividend forecast also remains unchanged at JPY 16 per share for the year-end and JPY 32 for the annual total. We will continue to pursue portfolio transformation and profit improvement based on the three criteria for business selection and three disciplined approaches in business operations, in line with the Medium-term Management Plan 2029. [Foreign language] Slide 4 shows the profit and loss. [Foreign language] The first three quarters, the exchange rate averaged at JPY 153 to the USD during the period, with the yen 6% weaker year-on-year. Naphtha averaged at JPY 76,300 per kiloliter, up 12% year-on-year. Sales revenue came to JPY 3,331.5 billion, up JPY 86.4 billion, or 3% year-on-year. This includes a positive impact of foreign exchange by JPY 98 billion, selling prices by JPY 60 billion, and sales volume by JPY 16 billion. These three added come to about JPY 174 billion. On the other hand, business structure reform, like the divestiture of Kansai Coke and Chemicals shares that we had, led to a decline in sales revenue. All in all, we came to this number. Core operating income came in at JPY 247.2 billion, up 34% year-on-year. We will provide further details later. For special items, there was a net loss of JPY 57.7 billion. That is JPY 86.3 billion worse from a year ago. Operating income came to JPY 189.5 billion, pre-tax income to JPY 161.5 billion. Net income attributable to owners of the parent came to JPY 59.4 billion. This is down JPY 44.5 billion year-on-year, but actually exceeds the full-year forecast of JPY 52 billion revised in November. Slide 5 shows the sales revenue and core operating income by segment. For Specialty Materials, this reported a 5% increase in sales and a 77% increase in income year-on-year. Display-related market demand remained strong, and advanced films and polymers, as well as Advanced Solutions, both achieved results that exceeded the forecast of November. MMA and derivatives posted a 20% increase in sales and a JPY 30 billion increase in income. This comes from higher market prICISs of MMA monomer. For Basic Materials and Polymers, sales came down 6% year-on-year, but operating loss improved by JPY 2.8 billion. Materials and polymers delivered significant improvement year-on-year, and despite the scheduled maintenance turnaround in Ibaraki, managed to post double-digit oku yen in income. But carbon products kind of continued to suffer from inventory valuation, a year-on-year decline by JPY 10.2 billion this time, coming to an operating loss of JPY 21.3 billion. For the chemicals business as a whole, which we positioned as the growth driver in MTP 2029, results improved significantly, with sales up 2% and operating income up by JPY 49.2 billion year-on-year. For pharma, Radicava sales in North America continued solid. Sales were up 3% year-on-year. Core operating income came down 2% due to increased SG&A and other costs. Industrial gases continued its strong performance, with sales up 5% year-on-year and operating income up 12% year-on-year. This shows an analysis of the year-on-year operating income difference of JPY 63.3 billion. Gaps had a positive impact of JPY 43.3 billion. Foreign exchange accounts for JPY 13.2 billion, mostly for industrial gases and pharma. Other than that, there were contributions from MMA and derivatives, thanks to higher market prICISs of MMA monomer, and from Basic Materials and Polymers from polyolefins. Volume had a positive impact of JPY 15.3 billion. Volume difference was positive for all sub-segments. In particular, Specialty Materials accounted for JPY 12.4 billion. Cost reduction had a contribution of JPY 41.1 billion. The annual target that we posted at the beginning of the year was JPY 47 billion, and we are on track to deliver that. Others had a net negative impact of JPY 36.4 billion. Inventory valuations had a negative impact of JPY 10.5 billion, mostly from carbon products. In addition, increased labor expenses and fixed expenses due to inflation affected all businesses. Let's now look at each segment. Slide 7 is for Specialty Materials. Core operating income was up JPY 15 billion year-on-year. The prICIS gap was a positive JPY 2.1 billion. PrICIS gaps deteriorated year-on-year for barrier packaging, but for other products, we generally managed to maintain or improve selling prICISs and brought the difference to a net positive. Volume had a positive impact of JPY 12.4 billion. For advanced films and polymers, demand increased in the first half for polyester films and optical films, as panel producers ramped up production, anticipating growth in television set-related demand in China on the back of a major shopping season and international sports events. We were expecting a reactionary fall in Q3, but this did not happen, thanks to the Chinese government policies, including subsidies. So high capacity utilization continued at our users, and the volume factor was positive. For Advanced Solutions, semiconductor-related demand recovered gradually, although there were differences between specific products and areas. Volume increased for materials used in the semiconductor manufacturing process, precision cleaning, and water treatment equipment. For advanced composites and shapes, sales volume increased as demand for high-performance engineering plastic recovered, mostly for use in semiconductor manufacturing equipment. For carbon products, volume increased for wind power generation applications, but the higher margin pressure vessels suffered a decline due to competition, and the net volume impact was negative. Production had a positive impact of JPY 7.6 billion, thanks to business structure reform, including withdrawal from acrylic fiber, procurement optimization, and productivity enhancement. Others came to a net negative of JPY 7.1 billion, that's due to increased labor and other fixed expenses, R&D, and the amortization of intangible assets associated with the consolidation of CPC. MMA and derivatives on slide 8 posted a significant year-on-year operating income increase of JPY 30 billion. PrICIS gap improved significantly by JPY 26.5 billion. MMA monomer market prICISs rose, and the spread was wider. In addition, prICIS gap improved also for coating and additives. The volume difference was also positive for both MMA monomer and coating and additives, for a net total of JPY 4.1 billion. Deficit in Basic Materials and Polymers shrank by JPY 2.8 billion year-on-year, with a positive prICIS impact of JPY 14.9 billion. Materials and polymers improved due to discrepancy in timing of revision of polyolefin prICISs. Carbon products' prICIS gap improved year-on-year due to coke spread turning positive in the Q3. The volume impact was JPY 0.7 billion in materials and polymers, where the impact of the previous year's troubles was resolved, but this was offset by the negative impact of Ibaraki Ethylene Center scheduled maintenance. Cost reduction impact was JPY 4.2 billion, with additional effects from structural reforms in the petrochemical derivatives business and optimization of equipment procurement and repair costs. Others, minus JPY 17 billion, includes deterioration of JPY 10.4 billion in inventory valuation. This is related to carbon products. Carbon products recorded a significant inventory valuation loss due to downward trend in coking coal prICISs. Pharma's profit decreased by JPY 0.9 billion year-on-year. PrICIS gap was negative JPY 1.1 billion due to the impact of the domestic NHI prICIS revision, despite the positive effect of foreign exchange. The volume impact was positive JPY 2.5 billion. Sales of oral Radicava in North America remained strong, supporting the profitability of the pharma business. Sales of Mounjaro in Japan and COVID pandemic-related vaccines also increased. Cost reductions amounted to JPY 1.1 billion, while other differences amounted to JPY three billion due to increased SG&A and other costs in Japan and the United States. Industrial gases' profit was up by JPY 15 billion year-on-year. The increase was largely due to the impact of cost reductions, such as the productivity improvement initiatives being implemented in each region. Moving on to special items. Special items for the nine-month period totaled negative JPY 57.7 billion, as the first-half result was minus JPY 35.7 billion. This means that new special loss of JPY 22 billion was recorded in the Q3. As announced last month, in the MMA business, we decided to discontinue the plan to build a new MMA monomer plant in the United States. As a result, a special item of special loss of JPY 16.8 billion was recorded. Of this amount, JPY 13 billion is impairment, including engineering costs incurred in the consideration of this investment plan. JPY 3.3 billion is due to contract cancellation penalties with external companies, and JPY 0.5 billion is due to other items. As stated in the three principles of disciplined business management of the new Medium-term Management Plan, we remain committed, both internally and externally, to upholding investment discipline. We will continue to pursue investment projects with a keen awareness of the need for return on investment. Moving on to cash flow statement, operating cash flow was an inflow of JPY 342.8 billion. Cash flow from operating receivables was a net inflow of JPY 10 billion. Cash flow from inventories was a net outflow of JPY 28.2 billion, and the total operating capital was an outflow of JPY 18.2 billion. The increase was mainly due to an increase in trade receivables for vaccines in Pharma and an increase of inventories of certain items, which enjoyed strong demand. We will continue to strive for proper management of working capital in each of our businesses. Cash flow from investment was an outflow of JPY 211 billion. Cash flow from capital expenditure was an outflow of JPY 243.8 billion, including gross investments, mainly in industrial gases and Specialty Materials, and repair of Ibaraki in materials and polymers. Cash flow from the sales of assets was an inflow of JPY 38.2 billion. The business portfolio was reviewed, and proceeds from the sale of shares in affiliated companies, strategic holdings, and unneeded assets were recorded. As a result, free cash flow increased by JPY 331.8 billion, and the cash flow from finance activities was minus JPY 153.5 billion. Moving on to the balance sheet, total assets stood at JPY 6.092 trillion, down by JPY 12.5 billion compared to the end of the previous year. Inflation again against other currencies compared to the end of March 2024 had an effect of pushing it up by approximately JPY 87 billion, but there was a decrease of approximately JPY 110 billion due to the sale of business, including the sale of Kansai Coke and Chemicals, resulting in a total decrease of assets. Net interest-bearing debt decreased by JPY 43 billion from the end of the previous year, and the net D ratio improved by 0.05 percentage points to 1.11 from 1.16 at the end of the previous year. Finally, on this page, I would like to provide some additional information on the development of operating profit in the second and Q3s, and also the outlook for the Q4. operating profit in the Q3 was JPY 74.8 billion, down by JPY 15 billion compared to the Q2. Looking at this by segment, first of all, in Specialty Materials, number was down by JPY 3.1 billion from JPY 13.0 billion in the Q2 to JPY 9.9 billion in the Q3. In advanced films and polymers, there was a partial reversal from the first half of growth in the films and polymers, films for displays. However, as I stated before, impact of Chinese subsidy policy and pre-emptive demand before the increase in the U.S. tariffs helped maintain volumes above expectations. Q4 is expected to see a decrease in profit compared to the Q3 due to the impact of a period of low demand and the concentration of costs at the end of the year. in Advanced Solutions, core operating profit increased in each business compared to the November forecast. Compared to the Q2, sales remained flat due to the impact of repairs in some businesses and the impact of the worsening prICIS in the electrolyte business for EV applications, despite the positive impact of seasonal factors in the infrastructure-related businesses. Q4 is expected to see lower profit compared to the Q3 due to the impact of lower sales of display-related materials and the concentration of expenses at the end of the fiscal year. Advanced Composites and Shapes saw a decline in sales volumes in high-performance engineering plastics and carbon fibers due to seasonal factors in Europe and the United States, specifically the holiday season, compared to the Q2 and with the assumption made in November. This year is expected to improve in the Q4, mainly due to the elimination of these seasonal factors and the decrease in amortization of the PPA expense of CPC, which became a wholly-owned subsidiary last year. This is in the carbon fibers business. The business environment for carbon fibers remains challenging due to competition. However, as mentioned in our midterm plan, we will continue to adopt new products to expand sales of high-value-added products, such as for mobility applications. MMA and derivatives' profit was down by JPY 9.9 billion, from JPY 15.8 billion in the Q2 to JPY 5.9 billion in the Q3. In the first half of the year, supply-demand balance for MMA monomer remained tight in Asia due to supply factors, causing market prICISs to rise, but the resumption of operation by other MMA manufacturers has loosened this balance, and the market prICIS fell accordingly. Although no major changes are expected in the Asian market from Q3 to Q4, the Q3 reflects some unfavorable market prICISs in the Q1 of the year, sorry, first half of the year, and profits are expected to decline further in the Q4 because of this reason. At the end of the lunar new year, so we expect the business environment to recover after this. We will continue to carefully monitor the market status. In Basic Materials and Polymers, the deficit narrowed by JPY 3.2 billion, from minus 4.1 to minus 0.8 billion in the Q3. Profit for materials and polymers remained flat from the second to the Q3, but this is expected to fall in the Q4 due to concentration of costs and falling demand and softer market conditions. Because of the coke's prICIS down, coke spread is now turned positive, and from the Q2 to the Q3, due to improvement in the inventory evaluation, we have seen improvement, and we expect the deficit to narrow further in the Q4 due to the same improvement. Kagawa Plant is reviewing our sales portfolios and responding to reduction. Pharma profit was down by JPY 9.8 billion, from JPY 22.9 billion in the Q2 to JPY 13.1 billion in the Q3. Although sales of domestic products were strong, income decreased due to lower sales in influenza vaccines, which were sold early in the Q2. There was also an impact of lower sales of long-term listed products due to additional copay for originator products, and also the impact of lower sales in Radicava due to seasonal factors and lower gains on transfer of intangible assets. Q4 profits are expected to be lower due to restrained buying prior to the NHI prICIS revision, as usual, for prescription drugs in Japan, as well as the concentration of SG&A and the R&D expenses at the end of the fiscal year. Industrial gases increased in profit in Q3 compared to Q2, mainly due to an increase in equipment installation in Japan, and this business is expected to continue to grow steadily in the Q4 as well. That concludes my presentation. Thank you very much. Now we would like to open the floor for questions. If you have a question, please press the raise hand button at the bottom of the Zoom screen. If it is difficult to ask a question by voice, we can accept questions by text as well. Please enter your question in the Q&A box at the bottom of the screen. Please state your name and affiliation before asking the question. After being pointed by the MC, please ask only one question per time so that we can receive questions from as many people as possible, and this applies to pharma as well. But if there are no further questions, you can come back and ask another question. We have Executive Vice President and Head of Pharma Akihiro Tsujimura responding to questions related to the development in the pharma business, and if a more detailed check would be needed, please contact IR at a later date. First question. [Foreign language] 渡部様、ミュート解除してご質問をお願いいたします。 渡部さん from Morgan Stanley, MUFG, please. Good afternoon, this is Watabe speaking. I have two questions. First, on MMA. In the United States, you decided to cancel that project. There's a discussion about who would be the best owner. The United States is most competitive, and I understand your disciplined investment approach, but if you have a commodity product, can you really get commitment of the buyers? And that's probably a factor in your decision. Can you tell us about that? And you talked about the market, and the market conditions in China appear to be improving. How do you expect that to actually affect the overall Asian market? Thank you very much for your question. With regard to MMA, whether we are the best owner or not, we are confident that we are the best owner for MMA business. We have the technology, we have the quality, and cost competitiveness. All in all, we will continue to be a leading presence in the market. There will be no change there. On the other hand, as you rightly mentioned, if you think about the longer term and getting commitment for volume, as well as the prICISs from key customers, it is proving to be more and more difficult. Having said that, particularly with regard to anything in the materials industry, on the supply side, the supply side taking all the risks for the customers may no longer be the norm. I see a sea change happening, and we are operating with the money that the investors have given us and trusted with us, so discipline is very important, and we will have to think about ROIC, return on invested capital, and in view of the capital efficiency, we could not decide to continue on, but as you rightly mentioned, we still believe we are a best owner, and within our operations, we have a lot of intangible assets. We did take an impairment on the balance sheet, but we do have that intangible part that prepares us for the next opportunity for investment. For the current situation in China, in Q3, starting from Q3, prICISs are coming down. The prICISs had been quite high, and the feedstock had been short in supply, but the C4 method producers are starting up their capacity, and prICISs started to capitulate, and that effectively is continuing, particularly in China. Those competitors there will start their capacity as soon as the prICIS goes up and then stop, and then the prICISs will fluctuate. That happens. As was the case previously, there was this sea change during the Chinese New Year. If there's this big holiday, you will think about the balance of the products in the tank, and that is something that people don't really focus on, but that could change the market. After the Chinese New Year, people are a little cautious, and there probably would be some improvement. ICIS used to be at 1,600, but in Q4, we expect there will be a rise by about $100 or so. Not that we can be very complacent or optimistic, but obviously, the competitors are also learning, and we see that happening, or signs of that happening. So in Q4, I think the market will be rather improving than the other way around. My second question is about MTPC divestiture, and it appears that you haven't made any decisions, but suppose you were able to sell it for JPY 500 billion. How would you look at the balance and loss and the balance with the capital invested, etc.? Can you perhaps shed a little bit light on that? Thank you. Actually, that's a popular question. If you read papers, I see that JPY 500 billion figure, and our book prICISs, some people make estimations. Actually, we haven't really come to that specific level within us. So I'm afraid it's very difficult to answer your question here and now. Thank you very much. Thank you very much. Let me introduce the next person. SMBC Nikko Securities, Miyamoto-san, please unmute and ask your question. Thank you for the presentation. I am from SMBC Nikko Securities. My first question is about specialty. When you explained the company policy, you emphasized the importance of a pricing policy. And in the Q3, how did you increase the prICIS? Looking at the spread over the last three months, I don't think that's been a big change, but what was the reality? And you have also announced some divestiture as well. So how do you see the profitability improving according to that? Advanced composite shapes, the deficit, it looks like this is quite tough against the plan still. And the optimization of the capacity for the carbon fiber, when do we see the benefit of this in profitability? So carbon fiber and composite, these are facing difficulties. So how do you intend to improve them? What is the path? Thank you for your questions. Pricing policy, as you have mentioned, in Q3, maybe we are not seeing a big impact. So the end of the Q3, more specifically within the organization, myself and Chikumoto-san, with strong initiatives, started removing negative margins. And we started this in Japan. Now, at the end of the Q3, we could eliminate many, I could say. However, we do eliminate a lot, but many others start to emerge as well. So it's like a Whack-A-Mole situation. And this means that we have to be stronger with these initiatives, implementations, and we have just embarked on that in the Q4. We believe that we can see a bigger benefit from this in the Q4. That is our expectation. Now, advanced composite shapes, I'm sorry that we're causing concern for you, but as you have said, there is a mismatch of balance between the upstream and downstream, as we have explained in November. Details are still being worked out as we speak, but before the end of this fiscal year, excess capacity may have to be worked on. So this is already set up as an action. So this is how we want to reduce the fixed cost. And upstream has to align with downstream. In other words, we have to do some transformation. That's the first step, I believe. And also in parallel, at the same time, we have to think about realigning the portfolio. So there were certain things that we were doing in the past, but I don't think that is the trend now, looking at what competitors are doing. We want to leverage our strength. We want to produce high-quality products and bring them to the market. We want to accelerate this process, leveraging our strength, and this is how we want to make a recovery in FY25. That is our plan. Carbon fiber capacity optimization, when can we see the benefit of this starting? It's going to be a step by step. And I cannot really comment on the specific timing at this point in time. I understand. I have expectations for your pricing policy in the Q4. Second question is also about specialty, page 26. Market trend was explained. And compared to the Q2, how did the different segments do in the Q3? Was it positive or negative? And on the right-hand side, we can see the outlook, including a long-span outlook. But if we limit this to the Q4, how does it compare to the Q3? You have already explained some of the segments, but looking at the markets, how do things change from Q2 to Q3 and then to Q4? Explain based on the key areas, and this is more of a summary. And I have already stated some of this, but display from the second to Q3. We thought that this would be a decline, and the biggest factor was subsidy in China. And this is still supporting the business. Business is stronger than we had expected, and there is a dynamic movement with the products as well. On the other hand, semiconductors, polymer for resist, still enjoy strong demand. Sales is strong. Starting from Q3, silicon wafers inventory adjustment basically was completed, and we have synthetic quartz. Basically, it's used for the ingot for the silicon wafers, and we were expecting recovery in this business. It seems that the inventory adjustment has not been completed at the wafer level just yet, which means that the actual development is slower than we had expected. Moving on to mobility, one of our concerns right now is batteries, specifically electrolytes. The basic competition is tougher than before, and also, as you can see in the media, EV had excessive expectation, maybe overinflated expectation, and is now declining, and we believe that this decline will continue for a while, including the Q4. Now, looking at Q4 specifically, I have already covered some of this already, but display will still be challenging, meaning compared to the Q3. This is not just the market, the status, but also supply. And also scheduled repair and maintenance. For semiconductor, I don't think things will change very much, but still, there are uncertainties. Like I mentioned in the wafer explanation, there are still things that we cannot foresee. Now, for carbon products, there are seasonalities, as I have said before, and new products launch are now within sight. So we believe that we can make recovery in terms of profit. And the market outlook, well, it's not that the market prICIS is not improving. It's more like we are losing against the competition. So we have to make the recovery, and that's going to be the key for growth in the Q4. Now, on this slide at the bottom, we are talking about something that is still lacking visibility: food, especially packaging materials. We know that over the long term, we will see recovery, but looking at the economy in the developed nations, especially Europe, we are affected by that, which means that the Q4 will still prove challenging for us, according to our estimation. I see. EVOH, Soarnol, compared to Q1, Q2, saw a growth, and in the Q3, again, it grew Q on Q, but there are seasonalities. So in the Q4, this will be lower. Is that correct? Seasonality is one factor, yes, but a bigger factor than that is weaker demand. Towards the end of the fiscal year, the customers tend to adjust their inventory. So this is not really seasonality. It's more of a one-time impact, but the customers' factor pushing the numbers down. I see. You think that this is going to be weak, but from Q1 to Q2, there was an increase. There's a Q3 increase as well. So it has hit bottom. Is that correct? In terms of volume or quantity, yes, we are already beginning to see recovery, but not as fast as we had expected. I see. Thank you very much for your detailed explanation. Thank you. [Foreign language] それでは次のご質問者の方を紹介させていただきます。 Please take the next question. From Mizuho Securities, Yamada-san, please. Please unmute yourself and ask your question. Good afternoon. This is Yamada from Mizuho Securities. My first question is on Basic Materials and Polymers. For carbon products in Q4 or rather Q3, the core operating income was a loss of JPY 5 billion, and so it's still loss-making. And we understand that in Q4, you're expecting an improvement, and you're also reducing coke ovens by 100, so you're not forcing the sales at a loss. So that should improve your profitability. So at this rate and going into the next financial year, I'm sure you're planning for that. Would you be profitable from the first half, or are you saying that you'll have to negotiate with customers and things will take longer? Could you give us a timeframe there? And then with regard to materials and polymers, I understand that there is improvement, but compared with others, you have a higher capacity utilization at your crackers, but it's still rather low. So going into the next financial year, other companies may not have so much maintenance turnaround, and that could be a risk for you because you could be further squeezed. So if you could tell us about that segment, please. Thank you very much, Yamada-san, for your question. First, on carbon products and Coke, in December and onwards, the coking coal prICISs came down. So the spread between Coke and coking coal is now reasonable for us. So if you look at all the prICISs that we get now, and if that continues, we would have had better results and maybe even breaking even. But then we have coking coal for several hundreds of thousands of tons. So that's a factor. But then over time, we are using up all that previously built-up inventory. So in the next financial year, maybe a little bit of hope included. We would hope to get profitable in the first half, but it may be once in the second half, but sometime in the financial year, and probably by the middle of mid financial year, we should turn profitable. And then it's not just about the coking coal, but it's also about the sales portfolio. The Coke business, based on market prICISs, we'd like to pull out of. So we are trying to move to a tooling-based business, so charge for the consolidation. And we are negotiating with some of the customers. Some are more understanding, some are less understanding, and so the results are still mixed. But we will continue our efforts there. And then for some parts of the business, if things are not going as we hope, we may need a further round of capacity reduction. That would be the very pessimistic case, but that could happen. To face your question squarely, we believe that by around the end of the first half or maybe in the second half, that business should turn profitable. That's our outlook, And on the coke, what was that name? Materials and polymers. Let me say petrochemicals here. With regard to petchem, the cracker capacity utilization domestically is about 70%, but currently, our utilization is about 90%. So petchem feedstock, the olefin feed, that's doing quite well. The polyolefins are also okay, but the others, liquids, are actually suffering. There are a lot of liquids, obviously, like 1,4-BD and sulfuric acid, and not liquids, but ethylene. So the non-polymer parts are suffering, but then the customer needs are not necessarily changing, but the customers are reorganizing their supply chain. So we used to sell this, and then the customers would produce that, and that products may now come from other countries. There is a structural part to this, but it's not that we are just letting things happen. We are right-sizing our capacity to get to the optimized capacity utilization and also be profitable at that reduced operating rate. And we are thinking about various ways to do that. I see. So improving flexibility would be part of what you're going to do going forward. So even for petrochemicals, you will get the appropriate ROIC in perhaps three years' time. Yes, but the ROIC will not probably be as high as Specialty Materials. In three years, petrochemicals will still be falling behind, but at least we won't be posting losses. If not for any major plant stoppages, etc. All right. So in the MTP, you talked about, you said that petrochemicals won't grow to the level of Specialty Materials. So don't worry, I'm not expecting that. Now, let me go to my second question. So this is about pharma. The volume difference isn't really there. And you talk about positives, but I'm sure there would be some negative factors there. And ND0612, the regulatory preparation for the filing, is that going okay? And with regard to R&D, from this financial year to next financial year, my guess is that there won't be a major increase. Is that correct? Thank you very much. This is Tsujimura speaking. Thank you for your question. With regard to the volume, the negative factor is related to that government policy to promote generics over long-listed drugs, and that is hurting the long-listed drug business. So that would be perhaps the only negative factor. So that's for Remicade and the prICIS decline, but it's not volume, is it? Actually, other than that, we have a number of long-listed drugs, and they are now within the scope of that new government policy to promote generics, and it began in October last year, as you know, and we hadn't expected that at the beginning of the year, so there's that shortfall, so for the long-listed drugs, and if you go to page 31, if you look at the overall sales in Q3 cumulative, you actually see an increase, and then Remicade, the prICIS is going down, so obviously that's there, but some would also be affected volume-wise. Yes. Mounjaro is in the list, so it's kind of masking what's happening. All right, so Mounjaro has a kind of a similar marginal income rate. Yes, so it says long-listed drugs, etc., and that includes Mounjaro. As you mentioned, we did get the CRL, and in the first half of the calendar year, we will be resubmitting our applications so as to get the approval from the FDA. We don't really expect a marked increase year on year with regard to R&D. Oh, yes. And sorry, I asked a question before about Mounjaro. Sorry about that. Thank you very much. [Foreign language] では次のご質問者の方を紹介させていただきます。 Moving on. UBS Securities. Omura-san, please unmute and ask your question. [Foreign language] お世話になっております。UBS証券の大村です。 Thank you. This is Omura, UBS Securities. [Foreign language] 確かに2点あるんですけれども、 I have two questions. First question is related to the pricing policy or pricing strategy that was mentioned by a previous speaker. [Foreign language] 追加でポコポコ出てくるというような形でおっしゃってたので、 Thank you. Thank you. That there will be more additional measures. In November, what we heard was that you will be basically making a list with all of the products and start working on the list from the bottom. So my understanding, my impression was that you had a very thorough strategy, but now you're talking about additional ones. What are they? And in terms of impact, my understanding is that it's not immediate, but before the end of March, you will maybe conclude the discussion with most of the customers, and the profitability should gradually start to improve from the beginning of the next fiscal year. That was my expectation. Is that the correct expectation? [Foreign language] もともと大村さんがどういうものをイメージされてるのか、ちょっと分かりません. I'm not quite sure what you were visualizing, Omura-san. What we're doing is, let's say we have a combination of SKUs and customers for the certain quarter, and we look at the sales. And if something is producing a margin, we will try to make improvements. So in the Q2, we identify those, and then we implement measures in the Q3. That's what we have done. We have covered most of them. In the Q3, we saw new combinations that we did not see before. We need to identify all the different possible combinations over a longer term. Otherwise, it would be very difficult to address all of them. This is something that we have learned as we added this exercise. That is the explanation about the mechanism. Now, as for the timing, I may have talked about the timeframe before, but this is a build-up exercise. We start doing something, and we cannot expect a linear improvement over time just because we have started this exercise. The benefit should be bigger in the Q4 compared to the Q3. As I've just explained, we need to look at this over the long term and identify all the potential combinations and cover them, which should take about 12 months. The benefit will continue to accumulate over time. It will take about a year for us to enjoy the full benefit. This is my understanding of the timeframe. That's very clear. Thank you. My second question is about advanced composites and shapes and the carbon fiber. For wind power generation, what is your outlook? Please tell us again. Under the Trump administration, investment for wind power is facing headwinds. Exposure in the United States and the outlook for this business. What is your view on this? And also, in mobility, looking at the long-term plan material that you provided to us, your plan includes a big growth in mobility in the future. What progress have you seen so far in terms of a strategy of growing mobility business? [Foreign language] 今のお話は、アメリカという話と風力発電の話、2つ。 The United States and wind power generation. I think you're talking about two things at the same time. So as far as the United States is concerned, I cannot share too much details with you, but wind power business has always been mostly centered around Europe, not so much in the United States. We're not really focused on renewable energy business in the United States so much. Now, wind power, as you may know, [Foreign language] ラージ島っていうのは、品位があまり高くないです。 This means that low quality, but low cost, and small profit. We are definitely going for the volume of the business. [Foreign language] 中国であるとか、そういったところでも炭素繊維を焼く人が現れてきて。 There are Chinese manufacturers who are making carbon fibers now. Even at a lower technical level, they can produce products that can sell. The competition is stiffer than before. So, Trump versus wind power and our wind power business, they're not really connected. They're not really related. That is our understanding and another thing we can say about mobility. Well, we have already shared things with you, and we have already shared our focuses and basically, they remain the same. We have not really changed those and in this field, as I have explained before, as you can see, luxury sports cars are the main focus, but we should be going after new mobility. I'm not talking about something but something that takes a long time, like flying vehicles. I'm talking about driverless taxis, for example, robot taxis, and that's always been our target. So like pharmaceuticals, we have a pipeline for this business and some of the items in the pipeline progress faster or slower depending on who we're working with. But we have made definite progress, according to our understanding. Thank you very much. With regard to new mobility, can you expect some project contributing already in the next fiscal year, or are we talking about a longer timeframe? We will see visible impact. We need about maybe one year soon. Maybe not within the next fiscal year, but in the following fiscal year, we should be able to show you how much we are selling. I don't think we can show you anything definite in the next fiscal year. I see. Thank you very much. That's all from me. [Foreign language] それでは最後のご質問者の方を紹介させていただきます。JPモルガン証券。 One last question from Nakada-san of J.P. Morgan Securities. [Foreign language] はい、JPモルガンの中田でございます。 Thank you, Nakada. I do have two questions, actually. The first about the reports about the potential sale of MTPC. If that is true, your MTP talked about the three criteria, and what about your target figures? If you're introducing various actions, the environment can change. The point is, which numerical target is really what you are focusing on? Is it the core operating income of JPY 570 billion, or is it more about profitability or ROIC? What is the real key priority metric that you will be looking at? Thank you very much. First, it's ROIC, return on invested capital. Okay. That really needs to be delivered. [Foreign language] そう、事業ポートフォリオが変わってきた場合は、この。 When the business portfolio changes, the growth number may change, but this ROIC, 8%, will be maintained, and you will be implementing measures to realize that. Yes, in a nutshell, but once the business portfolio changes, the ROIC target would have to be adjusted. It may have to go up or down. [Foreign language] はい、ありがとうございます。 Understood. Thank you very much. Another question, and that's related to the way you look at Q3 and your outlook for the next financial year. So up to Q3, you have a good achievement per full year, and the demand appears to be stable. So you're pretty much at a good place. But in Q4, you were expecting all segments to be down in core operating income, and you explained that. And is it because you are maintaining the full year forecast, or are you really expecting this JPY 42.7 billion in Q4? And if we believe that from Q3 and Q4, what about next financial year? You will have rationalization benefits, but it doesn't paint a picture of growth once in the new financial year. So what are you looking at with the slow recovery in the business environment overall? Well, so I think why are we thinking Q4 would be weak? It's both. And if you look at the next financial year as an extension, that's what you think. But with regard to MMA, the external factors are so influential. So there's a limit to what we can do with our own efforts. And for Specialty Materials, particularly for films, advanced films and polymers, that is, those for use in display, there will be some dips. But for other applications, for ceramic composites, we are expecting some growth in the next financial year. And with regard to Advanced Solutions, we do have some products for which strong demand is back. Some have yet to recover. I think I discussed that earlier. But once in FY25, we do expect those laggards to start recovering too. The key would be composites and shapes, the carbon fiber composites among Specialty Materials. This is the only loss-making part. The point is about turning that into profitability. We do have confidence, but the rate of progress and the probability of success needs to be maintained at a sufficiently high level. That's really the challenge for us. Thank you. With regard to the rate of change, would it be Specialty Materials, or would it be more about Basic Materials and Polymers because you have carbon products in that? Yes, it's probably Basic Materials and Polymers. You know, it's a little special. Change rate-wise, it's probably Basic Materials and Polymers that would have the largest change rate. Thank you very much. [Foreign language] それでは、 Thank you very much. With this, we would like to close the Q&A session. [Foreign language] 皆様、本日は大変お忙しい中、決算説明会。 Thank you for taking time from your very busy schedules to join us for this earnings call. The chemicals business faced difficulty last year, but now we have seen improvements. And we should feel relieved that we want to accelerate and improve profitability and capital efficiency. This is something that we need to do. And under the new midterm plan, we have identified many measures that need to be executed and also discipline. And by holding to these disciplines, we will try to continuously meet your expectations, and we appreciate your kind support going forward. Thank you very much. This conference will be uploaded online for your viewing anytime. This concludes the earnings call for today. Thank you very much for your participation.