Welcome to the Dentsu 2024 first half earnings call. This is a reminder that today's call is being recorded. This call will be held in Japanese and English with simultaneous translation for those joining online. Please choose your preferred language from the bottom of the Zoom screen. For those joining on the telephone line, you will only be able to hear the original language spoken. [Foreign language] Today's presentation materials are available on the Dentsu Group website. Joining me today are President and Global CEO, Dentsu, Hiroshi Igarashi. Igarashi [Foreign language] Global CGO and Global CFO, Dentsu, Yushin Soga. Soga [Foreign language] CEO, Dentsu Japan, Takeshi Sano. Sano [Foreign language] CEO, Dentsu Americas and Global President, Data and Technology, Dentsu, Michael Komasinski. Hello, everyone. Thanks for joining us today. The agenda for today will start with business update from Hiroshi Igarashi. Yushin Soga will then present the financial update, followed by strategic update from Hiroshi Igarashi. We will invite you to ask questions after the presentations. Mr. Igarashi, please go ahead. Good evening, and thank you for joining our first half Fiscal Year 2024 Earnings Call today. I will start our presentation with a summary of our first half results. The three months of the Q2 showed organic growth of 0.2% with continued sequential quarterly improvement, and our Q2 operating margin is 11.5%. The six months first half results are in line with our expectations, therefore, we reiterate our full year guidance of organic growth rate circa 1%, operating margin circa 15%, as we disclosed in February. Also, we will reiterate our underlying EPS of JPY 381.96. Let me start with our three months Q2 highlights. In Japan, we have been selected as the new lead agency for Google's AI Gemini service. In EMEA, Dentsu Creative won the content and social communication for BT. In the Americas, we won the integrated media and creative work for Honeywell and Medifast, alongside new media for other clients. In addition, in the Q2, GM reappointed Dentsu as its lead media agency, and we are proud to continue such an important relationship for the group. On sustainability and ESG, we launched our Integrated Report 2024, as well as ESG Data Book and TCFD Report. Also, due to our continuous effort, we have improved our ESG scores in MSCI and Sustainalytics more recently. In terms of industry awards and recognition, in Cannes Lions, we won 25 awards in total, including gold, silver, and bronze, as well as Grand Prix awards for creative and strategy. We also won Creative Agency of the Year by country at the Gerety Awards, and also won a total of 22 awards at the D&AD, including the top prize. I will hand over to Yushin to present the financial updates. Thank you, Igarashi-san. Hello, everyone, this is Yushin. I will now give an overview of the financial results for the Q2 of fiscal year 2024. First, I would like to explain our performance of the Q2 from April to June. The group returned to growth, reporting 0.2% organic growth. The group's consolidated performance has continuously improved since bottoming out in the Q4 of the prior year. Previously in May, we stated that we expected the Q2 to be slightly negative, but we exceeded that forecast. We reiterate our guidance of organic growth rate of approximately 1% in our full year forecast, as we disclosed in February. The group's consolidated operating margin for the Q2 was 11.5%, which is an improvement of 290 basis points on the prior year. This is in line with our internal forecast, and we reiterate an operating margin of approximately 15% for the full year. The underlying basic EPS for the Q2 increased by 47.7% year-on-year to JPY 65.02. We therefore announce an interim dividend of JPY 69.75 for the first half of 2024, reiterating our full year dividend per share of JPY 139.5, which is flat year-on-year. I will now move on to explain the first half results. First, the key items in profit and loss. The organic revenue decline was 1.8% in the first half, but net revenue increased by 8.6% year-on-year to JPY 573.8 billion, and underlying operating profit increased by 3.8% to JPY 63 billion, resulting in an increase in both net revenue and profit year-on-year. We continue to forecast fiscal 2024 as H2 weighted in terms of performance. On a statutory basis, net profit decreased by 63.7% due to lowered financial income, given the positive one-off last year and an increase in income tax expenses. The fall in statutory net profit is despite the group recording a 20% increase in statutory operating profit compared to the same period last year. In the first half of the year, the group recorded an impairment loss, mainly on intangible assets in APAC. Also, during the Q3 in July, the group incurred expenses related to the completion of the transfer of all the group's holding of the Russian operations. As a portion of these expenses were not included in the initial forecast, we revised our full-year consolidated forecast for operating profit announced in February, downward to JPY 107.1 billion, and for the net profit attributable to the owners of the parent, to JPY 36.7 billion. Moving on, I would like to talk about customer transformation and technology, CT&T. In the first half of the year, CT&T accounted for 29% of group net revenue, a decrease of 4.4 percentage points from the same period last year. Approximately half of this decrease is due to the impact of internal realignment of revenues, as we highlighted last quarter, and this impact will continue for the rest of the year. The revenue realignment supports our simplified structure under One Dentsu. Although this business area remains challenging, with the sales cycle remaining extended, there are pockets of strong performance seen in local businesses. Firstly, in Japan, BX is showing double-digit growth, while in the Americas, the data and technology area of CT&T showed growth of +3.5% year-on-year. We consider this data and technology area to be one of the most critical areas in our internal investment strategy. The strong performance in CT&T strategy work in international market remains a positive leading indicator for clients considering activating larger projects in the future. Let's move on to the regional slide. In the first half, the Japan business delivered robust organic growth of 2.1%. On the other hand, the three regions of the international markets continued to experience organic revenue decline in the first half of the year. However, a full recovery in performance is expected in the second half of the year, partly due to the cycling out of client losses from the prior year. Among the key markets, positive organic growth was achieved in Canada, France, Germany, India and Spain. In contrast, the U.S. and the U.K. reported organic decline. In Japan, the largest region, accounting for around 40% of group net revenue, growth remained robust and net revenue reached a record high for the first half of the year. This was mainly due to growth in the advertising business, particularly in internet media, which outpaced market growth and led the area with double-digit growth in the Q2. We saw increased client spend from existing clients and new client wins. CT&T, on the other hand, was largely flat, with CX customer transformation area impacted by high comparisons from prior year. BX business transformation grew by double digit, and the larger business, DX, digital transformation, achieved high single digit growth. Overall, performance in Japan is in line with full-year forecasts, with visibility on continued strong growth in the second half of the year, given an improving client win rate. In the Americas, the region accounting for around 30% of group net revenue, organic revenue continues to show quarterly recovery after reaching a trough in Q4 of 2023. In media, the pipeline of opportunities is strong, and many of these are offensive. The offensive rate in the international market reaches 85%. In the creative area, our client win rates continue to improve, driven by our compelling full funnel offering, covering consumer awareness, purchasing, and commerce capabilities, backed up by consumer data and our CXM offer. CT&T continues to face challenges due to the prolonged sales cycle. However, there is momentum towards recovery as we continue to develop the service infrastructure we provide to clients, including the new launch of Merkury in April, the main product of our data platform. Our performance in the first half of the year is within our initial forecasts. High client retention rates, the highest client satisfaction levels in the past two years, and new client acquisitions should enable the company to achieve its full-year forecasts. EMEA experienced positive organic growth in the Q2, a significant recovery of more than 10 percentage points compared to the Q1. However, this is partly due to the low comparative, due to one-off financial impact in the DAC cluster last year. Excluding the one-off DAC financial impact, the fiscal 2024 first half organic decline in EMEA would be 7.5%. For each practice, media, which accounts for a particularly large proportion of business, performed better than expected, offsetting declines in other areas. In Southern and Eastern Europe, performance has been strong since the Q1, particularly in Spain and Poland, due to local client wins, resulting in growth in the media business. Creative also saw new wins in the Netherlands and an increase in the deals with existing clients in Spain. In CT&T, recovery is slower than expected. However, the pipeline is increasing, indicating that future demand from clients is expected to be strong. Regarding the full year forecast, we maintain the level we set at the beginning of the year, as we expect the positive trend in media to continue in the second half of the year. In APAC, excluding Japan, organic revenue improved from the Q1, despite the client loss from last year continuing to impact results. In media, the Southeast Asian region is performing well, particularly in Thailand and Indonesia. Creative also saw steady spending by large clients, with increment of client spend in sectors such as automotive and food. CT&T, on the other hand, continued to face challenging conditions with client losses in Australia. There are some encouraging signs, including positive organic growth in all service lines in India after a long period of underperformance, as client losses have bottomed out. China is performing better than internal expectations. In the second half of the year, we will focus on strengthening cross-selling across the region as we roll out the One Dentsu strategy in the region and continue to expect results to be in line with our initial forecasts. Moving on to profitability, this slide shows a breakdown of the change in the group's underlying operating profit from the prior year. On year-to-date basis, underlying operating profit of JPY 63 billion increased from JPY 60.7 billion in prior year. As for the breakdown, the increment of the net revenue contributed to profit with JPY 8.9 billion compared to prior year. About half of this revenue increase belongs to Japan. The remaining increase in revenues came from international business, which included a reversal of the one-time financial impact of DAC last year, as well as a net increase from Tag and other subsidiaries acquired last year on a currency neutral basis. In addition, SG&A expenses increased by JPY 7.6 billion. This exceeded the level of the first half of last year, as this also includes the cost of subsidiaries acquired last year. Over the second half of the year, cost management will be continued to be implemented, ensuring our cost base is at an appropriate level, reflecting our top line growth. I will now wrap up with a final summary. This year, we will continue to focus on a return to growth. In the Q2, organic growth was positive, and we believe that we are in the very first stages of return to growth... We see an improving underlying performance with our full-year organic growth of approximately 1%, and our guidance of an operating margin of approximately 15% reiterated. We expect relatively high levels of net revenue and underlying operating profit in the second half of the year. We see an easing of competitors and the cycling out of client losses, but also we expect the business opportunities of Japan and the continued strength of the media business in our international market to boost performance. Based on these full-year forecasts, we maintain our basic adjusted net profit per share of JPY 381.96, and announce an interim dividend of JPY 69.75, reiterating a flat dividend per share year-on-year of JPY 139.5. Besides, the share buyback announced in February has been completed to the maximum extent of JPY 20 billion. We will continue to focus to differentiate ourselves through the integration of marketing, technology, and consulting, while promoting Integrated Growth Solutions as One Dentsu. I will now hand back over to Igarashi-san. Thank you. Thank you, Yushin. Let me now explain our group's strategy. We continue to pursue our One Dentsu strategy, and this is supporting the continued improvement in our quarterly results as we return to growth. Continued business growth is expected from the Q3 onwards. Momentum of growth can be seen in the increase in net win in our international market, and the improvement in the pitch win rate in Japan. I will also introduce our unique capabilities that increase our competitiveness globally to provide and accelerate Integrated Growth Solutions to our clients. First, we have significantly improved net new media wins in the international market, bottoming out from the first half of 2023. We believe that this is the result of our collaborative mindset through One Dentsu and our internal investment in data and technology. The relaunch of our proprietary data solutions product, Merkury, which I explained in the Q1, has enabled us to propose integrated solutions of data and media, particularly in the United States, leading to the new media win. Furthermore, in Japan, integrated services and the strengthening of the organizational structure led to a recovery in performance, with the pitch win rate improving after bottoming out in the second half of 2022. This momentum is encouraging as we look forward. Next, I will explain by region. Japan recorded the highest net revenue in both the Q2 and the first half of the year. We expect strong growth in the second half of the year. In particular, we continue to outperform the market and our competitors in internet media, and strong performance in BX and DX is driving performance in Japan. Americas organic growth rate continues to show quarterly recovery. Also, our accelerator clients' year-on-year net revenue growth rate is exceeding that of Americas as a whole. In addition, as I mentioned earlier, we see a momentum in the media and data and technology, and we will continue to focus on our integrated solutions to increase our business. EMEA, we expect the positive trend in media to continue in the second half of the year, thanks to local client spending. We see recovery in CT&T slower than initially expected, but the pipeline of CT&T year-on-year is increasing. In APAC, we still see challenges, but performance has improved since the last quarter. We will continue to simplify our cost structure based on our client strategy, with a focus on the accelerator clients and Japanese clients that are aligned with our Japanese business. Next, I will outline two initiatives to accelerate our unique Integrated Growth Solutions to enhance our competitiveness. The first is the global expansion of BX practice. BX is Dentsu's consulting service that provides business transformation with the aim of supporting clients' sustainable growth. We have developed this as a unique service that differs from the traditional consulting model. We provide a consulting service as a solution to solve various challenges that clients face by combining all the strengths of Dentsu, namely creativity, execution, data, and technology, and with a marketing perspective. Consulting services focused on business transformation, corporate transformation, and sustainability strategy are opening new doors to the C-suite and creating new business opportunities beyond the marketing budget. We have positioned BX as an integrated growth solution practice alongside media, creative, and customer experience management, or CXM. We have offered this consulting service in Japan for more than 10 years, helping clients transform and create new categories. In recent years, we have continued to grow at a double-digit rate each year, and we anticipate client demand in markets outside of Japan. We have also provided consulting services in the international markets. We consulted with Learning Care Group in the United States around their marketing and technology structure, helping to map out a future state vision of their business based around transformation of their data infrastructure, organization structure, ways of working, and brand hierarchy. This expansion reiterates our differentiation positioning at the convergence of marketing, technology, and consulting. Second, the global expansion of the Dentsu Lab, a creative R&D organization. Now, please watch this video. Dentsu Lab is a creative R&D lab that has been developing in Japan since 2014. We have worked on a number of globally acclaimed innovation projects, including All Players Welcome, which provides the tools and capabilities to enable all people, including those with ALS or other disabilities, to express themselves via video games, music, and dance. This was introduced at Cannes Lions and received a lot of positive feedback. With offices in London, Amsterdam, Warsaw, Mumbai, Bengaluru, and Tokyo, we will continue to use our creativity to explore the possibilities of new technologies and develop expressions and experiences that move people's hearts, grow our clients' businesses, and solve social problems on a global scale. We are currently receiving numerous inquiries from diverse clients in various regions, demonstrating the demand for this unique capability. To conclude, although we still face a challenging business environment, we see continued improvement in our performance and expecting to continue our recovery in the second half of the year and beyond. Clients are continuing to invest in marketing, seeing it as a driver for growth. While we remain conscious of the less certain macro environment within which we are operating and with a less confident consumer, we believe clients are continuing to invest in innovation and marketing to drive volume growth within their businesses. Now more than ever, clients need Integrated Growth Solutions, including integration of data and media, and our One Dentsu approach can support the delivery of this.... Investments in data and technology have contributed to a recovery in our performance, especially in media, in international markets, and we will continue to focus on measures to increase our competitiveness. Under the One Dentsu strategy, we strengthen the organizational structure, which enables to provide Integrated Growth Solutions globally to increase the value we can provide to our clients. We will continue to focus our management efforts with reiterating our full year guidance. We continue to prepare our next mid-term management plan, including our strategy and mid-term forecasts, and we will come back to you with more specifics, with more specific timings later in the year. Thank you. I will now hand back to the operator and welcome your questions. We will now begin the Q&A session. For questions, please use the Raise Your Hand function on Zoom or press star nine on your telephone. I will ask you to unmute, then please introduce yourself. We are confirming several hands being raised. Please keep your hands raised as we are confirming your names. Thank you for your patience. Mr. Kishimoto from Mizuho Securities, please unmute and introduce yourself. Kishimoto of Mizuho Securities. Thank you for this opportunity. I have two questions. First, this time, APAC impairment losses have been incurred. In Q1, impairment was also accounted for, and in December 2023, some part of that had not been incurred. That's why in Q1 it was incurred. But what's the backdrop of the review in incurring impairment losses this time around? That's my first question. Should I ask for your response to this first question, or should I go ahead and continue with my second question? Please conti- Let me continue with my second question. The results are in line with the assumption. Please continue your questions. Apologies for ending your questions. We had difficulty hearing your voice. Our IR team will get back to you if you could send us your question later. Igarashi-san, please, could you comment on the first question? Thank you very much, Kishimoto-san. There had been some connectivity-related problems. You were about to embark upon your second question, but let me just respond to the first question regarding impairment losses for APAC. What was the reason for the review this time around? Since December last year, review had taken place, and you want the backdrop. Regarding that issue, Global CFO, Yushin will respond. Thank you. This is Yushin speaking. Kishimoto-san, I'm not sure whether you're listening to my response, but thank you for the question. As you have rightly pointed out, in the results just announced, I touched upon this slightly, but Australia and other areas in APAC still is troublesome, struggling with regards to the future results. Therefore, since the last announcement for Asia, APAC region, our forecast or guidance has been revised downwards. To date, goodwill accompanying acquisition had been the main reason for the impairment, but this time around, intangible asset is the reason. At any rate, APAC region's visibility since end of last year has become more challenging, and that is reflected as we recognize the impairment losses. That concludes my response. Kishimoto speaking. Sorry, I think I was cut off when, as I was going to my second question. My second question was, Q2 result is in line with forecast, but what's the breakdown between region, outperformance in certain regions and down performance in certain regions? Kishimoto-san, this is Igarashi speaking. Thank you very much. Your second question is, although the global results are in line with forecast, what are the reasons that were in line with the forecast and regions that were not in line with the forecast? So far, progress has been made within our forecast. This is Igarashi still speaking, and I will respond to that question. And the performance in Japan is robust. But as I spoken previously, in Q2 and first half, net revenue was a historical high, and therefore, the performance outperformed our assumptions and forecasts. On the other hand, Americas, EMEA, APAC, if we look at these regions, in Q2, we have seen certain improvements in all of these regions. And in the first half, the performance of all of these regions were within our forecast, but the recovery in the Americas is slightly slower than our assumption. But as far as, as the other regions, including EMEA, is concerned, recovery is in line with our forecast. APAC, we're still seeing challenges, but performance is in line with our forecast. That concludes my response. Thank you very much. Mr. Maeda from SMBC Nikko Securities, please unmute and introduce yourself. I'm Maeda from SMBC Nikko Securities. I also have two questions, and I would like to pose these two questions all at once. First, about expenses. According to the presentation material, page 33, in the first half, in comparison to the previous year, same period, Japan business and international business are not separated, since it is now under One Dentsu structure, but could you add some color, if possible? OP margin 15% on a full year basis is the forecast. To achieve this in the second half, do you expect a stronger cost control, or do you think the pace will be maintained, or will there be increase in pace? As for underlying SG&A, could you comment on that? That is my first question. The second question is related to the previous question by Mr. Kishimoto. By region, in the second half and beyond, what is the outlook of advertising market, and what is the position of Dentsu? Advertising market appears to be recovering in Japan, but there are some concerns about the U.S. economy and in the stock market. Globally, there may be concerns that may be spreading. So could you discuss the outlook of the market prospect in each region and positioning of your company? Thank you, Mr. Maeda, for your question. This is Igarashi speaking. Regarding the first question, expenses, first half in Japan and in international markets, regarding expenses, if there are additional comments, in particular, request was to comment on, including on trends. As for a full year and forecast in the second half, is there going to be stronger cost control to achieve full year forecast? The question will be addressed by Global CFO, Yushin. This is Yushin speaking. Mr. Maeda, thank you for your question. Expenses, when we look at the four regions overall, in comparison to the initial forecast, there has not been much divergence in terms of expenses overall and by region, there has not been any surprises. To begin with, when we had earnings call in February, we discussed this, that in this fiscal year, top line growth will be brought back to growth trajectory, and we expected positive spending in the Q2, up to the end of the Q2, and I have presented the performance up to the end of the Q2. The top line results are in line with our expectations, and therefore, and perhaps since the performance has recovered to this degree, you might be expecting that there might be an upward revision of our performance guidance. But we have to also look at the macro environment, and given the risks. We believe that to achieve appropriately the initial year beginning of the year guidance is the responsibility of us as the management. So as Igarashi mentioned, and I presented, we reiterate our full year outlook. As for cost control in the second half, to repeat, our costs support the top line, and looking at the changes in the top line, in appropriate fashion, we will control costs. 15%, which was the year-beginning of the year guidance, is to be achieved, and that will be the first focus. So as necessary, we will control cost, but to increase top line, we will also make necessary spending. As for the second question, this was about the outlook of the advertising market and positioning in each region. In particular, how Dentsu will be positioned. Overall, I would like to respond, and regarding EMEA and APAC, I will also comment. This is Igarashi speaking, and we have America CEO, Michael, and CEO Japan, Takeshi. So regarding the U.S. and yeah, I would like to ask Michael to make a comment afterwards. As you rightly commented, we see increased volatility in the market, so we have to be cautious in our outlook. On the other hand, when we look at the clients' activities, there was a COVID pandemic and inflation, and they have almost run their course. And we, clients, it has become clear that our clients want to capture new consumers, new customers, and therefore, regarding marketing spending, I believe overall there is a trend to make necessary spending, which we expect to continue going forward. Against this backdrop, as for us, at Dentsu Group, we have integrated a solution offering called IGS. In particular, right now, with a CMOs of, each client company, these, CMOs are, looking to capture new consumers and are increasing spending on media, and, therefore, more than 80% of our pipeline, including media, are offensive, and, therefore, we are, proactively addressing this. As for client satisfaction scores, we, remain in top quartile, and based on this high level of satisfaction, we will maintain our accounts. At the same time, we believe that we have great opportunity to increase new accounts. As for the, U.S., I would like to ask, Michael to comment, after that, Takeshi to comment on Japan. Thank you, Igarashi-san. Yeah, just to comment a little bit, on the U.S. market, right? So, demand for, marketing services, we think, we can see as healthy. We see that expressed through our pipeline and through the demand that we have with current clients. And as was said earlier in the presentation, a lot of that manifests around marketing transformation initiatives with media at the core of those transformation initiatives. And in particular, most clients around media transformation are looking to sort of balance their brand and performance initiatives with an idea towards ensuring that they're cultivating, true incremental customers. And, ensuring that, you know, they've got new demand, truly new incremental demand coming in for the next couple of quarters. And our set of services are really well geared towards that. The relaunch of the Merkury platform allows clients to identify new growth audiences, and a way to activate and measure those, I think, in a very differentiated way. And it really supports, sort of that initiative to ensure measurable incrementality, and that's part of why I think we're more competitive with our offering than we had been in the past. Next, on Japan, Takeshi, please. This is Takeshi speaking. I would like to comment on Japan market. First, about market overall. Just the other day, we have seen volatility in the stock market, and inclusive of that, the recent economic trends are not clear. They are murky, but clients' activities are also healthy, and we believe that there will be a healthy trend to continue. On our part, as it was presented earlier, we have seen improved pitch win rates, and in the Q2, large volume TV and internet domains are areas where we have achieved higher scores than the market. We believe that this trend will continue, and at the same time, as presented earlier, in BX and DX, we are still growing, and that will have a positive impact on traditional advertising market, and we expect this solid trend to continue. Thank you. Thank you for your questions. Mr. Nagao from BofA Securities, please unmute and introduce yourself. Thank you. Hi. Thank you, BofA Securities. My name is Nagao. I have two questions. First, the situation in the United States. My question is against peers, comparison against peers. Sorry to mention by name, Publicis, WPP, Omnicom, Q1 to Q2, these agencies' organic growth had significantly improved. Now, your group had seen improvement, but you haven't fully turned positive. So in comparison to your peers, you are somewhat behind. What are the factors behind? And last year, there had been major client losses, so towards the second half, can we expect a stronger recovery in the United States? So my first question is U.S. in comparison to your peers. Coming to my second question, true, that as Mr. Sano pointed out, the recent economic situation is rather uncertain, but there were the Olympic Games, which was, so I hear, a great success in terms of advertisement demand. Also, what was quite impressive about Dentsu is international growth was double-digit. So in comparison to your peers, you were able to achieve more robust growth. What was so popular amongst your clients that led to more significant success on the part of Dentsu? If you could break down and give us more detailed factors behind. Thank you. Thank you, Mr. Nagao, for your questions. Your first question is on the United States and comparison to Publicis, WPP, and other competitors. The pace of recovery in comparison to our peers is rather slow, relatively speaking. What are the factors behind, and how should we look at the second half? What initiatives will be put into place? Let me comment first, and then I will hand over to Michael. Regarding the U.S. situation, as I've already mentioned, we are seeing certain growth, steady growth. As you had mentioned, there had been client losses last year, and that impact still existed in Q2 last year. Michael assumed the CEO position of the Americas in July, and therein after, significant reform had taken place through his leadership. One Dentsu IGS model was very quickly introduced in the United States for reform. One great example is Merkury, and that has led to higher win rates. But there is some lagging effect, time lag, in terms of recovery. That's the truth and reality. So what are we doing? We are offering group-wide support to strengthen our performance in the United States, so that policy will remain consistent. Michael, would you like to comment on more detailed factors? Yeah, sure. Thank you, Igarashi-san, and thanks for the question. Yeah, it's worth reiterating, right, that the progress in the Americas is really shown through our sequential quarterly improvement. You'd have these figures, but as a reminder, we were -9.3 in Q4 of 2023, -6.6 in Q1 of 2024, and now -3.7 in Q2 of 2024. We expect to continue to see sequential improvement in this business, which will minimally get us to parity with what I would say, the sort of second tier of our competition. You do see a bit of a bifurcation in the competitive set, with one or two competitors outpacing the rest. And, you know, because of our higher exposure to CT&T, as well as the points that Igarashi-san mentioned of cycling past client losses, and some of the lower win rates experienced in late 2022 and early 2023. We're getting past those factors, which I think minimally we expect to catch up to the sort of second tier of the competitive set. And then eventually in 2025, we'll set our sights on retaking the top tier in terms of our organic growth. And that'll be continuing to execute well around our integrated growth approach, as well as deepening and enhancing our platform capabilities, primarily through Merkury, although others will be coming online later this year as well. Thank you. Regarding the second question, regarding factors of the robustness in Japan, especially the double-digit growth in internet, what are the factors behind? Nagao-san, thank you. This is Sano speaking. I said we are seeing growth in TV, but digital and television both. Integrated planning is being proposed to our clients to offer optimum solutions to our clients, and that's the reason behind the higher win rate. And also, not only in media, but Marketing for Growth was released most recently. From strategy making in the initial stage to execution, evaluation, measurement, from recognition, purchase, to commercial stage and post-purchase, we are being able to offer integrated solutions, and win rate is going up, and we are being appointed by more clients. And as a result, that has led to growth in especially television and internet. That completes my response. Thank you very much. Thank you. As a reminder, if you would like to ask a question, please press the Raise Your Hand function on Zoom, or press star nine on the telephone line. Ms. Fiona Orford-Williams from Edison Group, please unmute and introduce yourself. Hello, it's Fiona Orford-Williams from Edison Group. My two questions. First of all, on BX, you say you're expanding the services globally, globally. Does that involve any sort of organizational restructuring, or is it more presentational? And more broadly, within CT&T, at the Q1s, we were talking about lengthened sales cycles. Are we still seeing them pushed further down the line? And then my second question is about Dentsu Lab. It was obviously a very impressive video and feedback from Cannes. You're talking about expanding that globally, putting more behind it. What sort of timescale are you looking for payback? And is it more that it enhances the offering rather than as a separate service? Thank you. Thank you, Fiona, for those questions. There were two questions. First, about expansion of BX. Is this restructuring or not? And about the expansion of our offering, to clarify, about the direction and on CT&T, it appears to be that business cycle is lengthening. Is sales cycle continuing to become longer? Is continuing to become longer. About BX expansion, I, Igarashi, would like to respond, and I will also respond regarding CT&T before turning the microphone over to Michael for additional comments. Regarding expansion of BX service within our overall IGS, and as I presented earlier, we believe this expansion of BX. BX is a very important factor. Marketing challenges themselves, how can we commit to them? What solutions can we offer? As presented earlier, we would like to open the doors to C-suite with these solutions, and therefore, we... Whether BX alone will generate a large revenue immediately, that is not what we assume that with this as a starting point, we would like to continue to offer services and solutions to help clients address their challenges. Therefore, we believe that BX is a very important offering for clients' growth. This is not merely for cost reduction. That is how we view BX, and this is for marketing growth, a very important core strategy. Regarding CT&T, about the lengthening of the business in North America and EMEA, we have robust pipelines. But from the pipeline to actual conversion into business, the time it takes is becoming slightly longer. That is how we see this. This trend of requiring a slightly longer time may not recover so quickly, and I would like to ask Michael to supplement. Thank you, Igarashi-san. Yeah, so as Igarashi-san mentioned, the sales cycle in CT&T continues to be longer than what we'd like. Our pipelines, although healthy, I would characterize them as modest in that spectrum. We continue to think that this is largely due to two effects, right? One, the normalization of demand that we see kind of after a really strong performance in this area in 2021 and 2022, as clients kind of digest the transformation programs that they undertook during that two and a half year period. Then also the impact of interest rates on cost of capital and the resulting hurdle rates that these transformation projects have to get over, because they typically involve some large portion of CapEx for software development, change management, et cetera. We can see that as evidenced in some of the growth rates for our more significant MarTech partners, Salesforce, as an example. So while we're confident in the long-term growth of this segment of our business, it has been surprisingly impacted by interest rates, and we do think that that will correct itself in the next year or two, as you see central banks, in particular, the U.S. Federal Reserve, potentially start to cut rates. That should bring down hurdle rates. We also get sort of past that normalization period that I spoke of, where some of the major transformation projects in 2021, 2022 have sort of run their course. Clients will need to reinvest in those types of programs to drive their business in later this year and into 2025. So while we're confident in that long-term growth of our business, it has been surprisingly elongated, and we're definitely not out of the woods just yet. Hi, as for your second question on Dentsu Lab. Finally, after the start in 10 years ago in Japan, this creative R&D initiative, as I presented earlier, are now deployed globally in five markets, initially, as the first step of a global deployment. In the medium term, we will expand further globally. This initiative merits a global expansion. Of course, Dentsu Lab by itself, whether it will generate a significant revenue or not. We may not expect a significant recoupment, but with our clients, we will be embarking on ambitious initiative of addressing social problems, and we have to expand this initiative. Including social good, creating a social value is something that we are doing in various markets in addition to Dentsu Lab. And within that overall trend, Dentsu Lab and its activities will have accelerating effect. Together with clients, we will address social problems to create new values, and we believe that that is a major resonator for our group. And we believe that that will also help our clients achieve growth and solve their challenges. And we believe that significant impact can be brought about. And through that, we would like to make sure that we are a true growth partner for our clients. That is the aim, and therefore, not on a standalone basis, but totally within IGS as one of the core social offerings, we position Dentsu Lab as such. Thank you for your questions. As we have already reached the closing time of this call, the next will be the final question. Mr. Harahata from Nomura Securities, please go ahead. Please unmute the microphone and introduce yourself. Thank you. Thank you. It's gone beyond the closing time. This is Harahata of Nomura. Just one question. It overlaps with the previous questions, sorry for the repetition, but organic growth rate guidance was reiterated. Again, what are the reasons behind Q2? You did better than forecast, and it's been better than the second half of last year. You could have given us a more bullish tone. Is it because of a specific product or specific markets you have concerns over? Is that the reason that you are reiterating your guidance? Thank you. Thank you, Harahata-san, for that question. This is Igarashi, and I will respond to your question. True, our progress is within our assumption. That's what I've been saying. In terms of the context and forecast, progress is positive, so I think you're asking why not revise our guidance. But as we have commented previously, we are seeing slightly heightened market volatility, so we want to be on the safe side, and vigilance is required. That's the major assumption. Do we have any specific concerns in specific markets? In all of the markets, the progress is as assumed, but recovery isn't easy. Recovery isn't significantly beyond and better than our assumption. We took initiatives we assumed, and so the performance is within our assumption. And we will be reviewing our costs, and we will be implementing cost control, and for organic growth. We reiterate our guidance that we announced at the beginning of this year, so that we can steadfastly deliver results. We're doing well in media, and in Japan, win rate has improved, but there is time lag in some areas. So those factors included, we will do our best efforts to recover in the second half. That concludes my response. Thank you very much for your response. With that, I would like to conclude today's earnings call. Thank you very much for participating today. You may now disconnect. Thank you.