Welcome to Dentsu F/I 2025's First Half Earnings Call. Thank you for joining us today. [Foreign Language] My name is Morishima from the Group IR office, and I'll be your moderator for the call today. This is a reminder that today's call is being recorded. [Foreign Language] 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 our website. [Foreign Language] Joining me today are Global CEO of Dentsu Group Inc. Hiroshi Igarashi. [Foreign Language] Global COO and Chairman and Acting CEO of Dentsu Americas. [Foreign Language] Giulio Malegori. Hi, everybody. It's Giulio Malegori here. Thank you. CEO of Dentsu Japan and Deputy Global COO, Dentsu, Takeshi Sano [Foreign Language] [Foreign Language] Global CFO Dentsu, Shigeki Endo. [Foreign Language] They will be responding to your questions after the presentation. Today's agenda will begin with business and strategic update from Hiroshi Igarashi, followed by financial update from Shigeki Endo. The presentation will end with F/I 2025 consolidated guidance and dividends by Hiroshi Igarashi. We will invite you to ask questions after the presentations. Mr. Igarashi, please go ahead. [Foreign Language] Thank you very much for joining us today for the F/I 2025 Q2 Earnings Call. Let me start with the highlights. In the first half of 2025, organic growth rate was - 0.2%, slightly below our expectations, owing to the challenging conditions that our international business is facing in all three regions, although Japan performed well. Meanwhile, operating margin was 12.0%, exceeding our expectations and the previous year. Efforts to rebuild the business foundation and internal investments are making steady progress, and we have begun to restore profitability and competitive advantage. However, assuming the challenging business environment of our international business to continue, our full-year 2025 earnings guidance is revised. Organic growth rate is revised down from the circa 1% to broadly flat, while operating margin guidance of circa 12% will be maintained. In addition, mainly due to the underperformance of our international business, goodwill impairment loss of ¥86 billion was recorded in the Americas and EMEA. To focus on capital enhancement, I very much regret to say that the interim dividend will be suspended and the forecast of the year-end dividend undetermined. To make fundamental improvements in our international business, early implementation of measures such as comprehensive and strategic partnership will be sought. Now, here are the highlights of the second quarter and the recent period. With regard to new clients, we won the MITSCOM pitch in Japan, ServiceNow globally, Dollar General in the United States, and BMW in EMEA, where we won media pitches. In CXM, we won Arrow Electronics in multiple markets, and in creative, we won Chery Automobile in APAC. In terms of industry recognition, we won 26 Lions at Cannes Lions, as well as numerous advertising awards from The One Show and the NAD. We are also enhancing our recognition in the field of sustainability. Next, our business update. In the first half of the year, we began rebuilding our business foundation with the aim to restore profitability in our international business. Our goal is to achieve an operating margin of 16%- 17% in F/I 2027 by reducing annual operating costs by around ¥50 billion. We have now identified opportunities to reduce costs by around ¥52 billion annually and are moving into the implementation phase. Headcount will be reduced by approximately 3,400 employees, which account for approximately 8% of our international business. This reduction will target headquarters and back offices with the aim of creating a lean corporate structure. It will be carried out so as not to impair our growth potential or competitiveness. The expenditure for rebuilding the business foundation, originally planned as a one-time cost of around ¥50 billion in 2025 as an adjustment item, will be partially deferred to 2026 or late. The effects are expected to be realized in 2027 as planned. [Foreign Language] The one-time cost in 2025 has been revised to ¥27 billion. In addition, approximately ¥6 billion will be recorded as a non-adjustment item, resulting in a total impact of ¥33 billion on the P&L for this fiscal year. Approximately ¥2.4 billion in costs have been recorded in the first half of 2025. At the same time, strategic internal investment for growth is also important. [Foreign Language] The midterm management plan announced in February explained about the ¥45 billion in internal investment over three years starting from 2025. Our original plan for 2025 was ¥20 billion, but we are monitoring usage and results every three months and narrowing down investment targets to initiatives that can ensure appropriate return. As a result, we are currently planning to spend approximately ¥17 billion. We have identified five priority areas for internal investment. First, data and technology, investing in products and platforms that seamlessly integrate market research and media planning powered by data. Second, IGS talent, our specialized talent, are delivering integrated solutions. Third, enhancing capabilities, especially in emerging areas such as new media, and leveraging AI to connect teams across the entire group. Finally, building a robust delivery operations organization centered on Dentsu Global Services. By steadily implementing these investments and achieving results, we will regain our competitive advantage. Although expenditures will be backloaded to the second half of the year, we have growing confidence in the return on investment and will continue to update you on an ongoing basis. Next, I would like to talk about the progress in sports and entertainment. We have been promoting value creation in this field with approximately 1,200 industry insiders and supported nearly 1,300 clients in 21 markets worldwide. Going forward, we will expand globally as a single network by connecting bases in major regions. I would like to introduce three specific initiatives. First, we are expanding our sports data service, Dentsu Sports Analytics, to the Middle East and North Africa, building on its success in 20 locations worldwide. Second, we have globally expanded our Dentsu Anime Solutions brand to North America, China, and Southeast Asia. We will provide integrated business solutions to content owners and optimize IP licensing and marketing strategies with anime content as the core. The overseas launch of Japanese IP and product merchandising will be conducted. Third, as our new business domain, we are promoting the House of Creators initiative, supporting creators in partnership with Roblox, and have launched RobMix as a collaborative business label in partnership with Kodansha Creators Lab. Now, I will hand over to Shigeki to update our financial results. [Foregn Language] Hi, this is Shigeki. Let me take you through the financial results for the first half of F/I 2025. I will start with the key metrics. Organic growth for the first half of the year was a - 0.2%, which was slightly below our February expectations. For the three months of the second quarter, it was - 0.7%. Maintaining the momentum from the first quarter, the Japan business continued to perform strongly, exceeding our expectations for the first half. However, the international business continued to face challenges, with all three regions performing slightly below our expectations. This was due to the continued slower recovery of CXM in the Americas and in some EMEA markets, and due to creative performing slightly below expectations, mainly in APAC. As a result, consolidated net revenue of the group decreased 2.1% year-on-year to ¥562 billion. However, underlying operating profit increased 7.2% year-on-year to ¥67.5 billion. This was due to the strong performance of Japan, which recorded a ¥9.2 billion increase in underlying operating profit and the international business, partially offsetting the net revenue decline by controlling SG&A expenses, including staff costs, with the start of our effort in rebuilding the business foundation. In addition to the controlled SG&A expenses, phasing of internal investments also contributed to this higher-than-expected profit level. Operating margin was 12.0%, 100 basis points higher than the same period last year. Meanwhile, on a statutory basis, we posted an operating loss of ¥36.5 billion and a net loss of ¥73.6 billion. This was due to the ¥86 billion of goodwill impairment loss we recognized in the international business in the second quarter. The ¥86 billion of goodwill impairment loss is made up of ¥68.9 billion in the Americas and ¥17.1 billion in EMEA. There are three main factors behind this impairment. Firstly, the impact of downgrading the F/I 2025 forecast for the international business. While we included a level of conservatism in this year's full-year forecast at the February timing, the deterioration in the international business was worse than expected. Secondly, the impact of reducing the growth rate used in the impairment test for the Americas from F/I 2026 onwards, which was a reflection of the downgrade of the F/I 2025 guidance. Thirdly, the impact of the U.S. dollar weakening against the British pound. Because some expenses in the Americas are recorded in British pound, the weaker U.S. dollar caused the value of our business in the Americas to decrease. When we recorded impairment in February this year, it was due to the conservative estimate we assumed and used for the growth rates in the impairment test, not only for F/I 2025 but also for F/I 2026- F/I 2029. However, on this occasion, the impairment was driven by a complex combination of various factors that resulted in the value of goodwill being lowered, including the greater-than-expected deterioration forecasted in the international business for F/I 2025 vis-à-vis the assumptions made in February, revision of the assumptions used in the impairment test from F/I 2026 onwards, and the impact of the U.S. dollar weakening against the British pound. Even with the latest impairment, the balance of goodwill still stands at ¥583.8 billion across the group, mainly in the Americas. Since the goodwill is exposed to external factors, we cannot completely rule out the risk of impairment in the future. However, we remain committed to achieving the revised guidance. I will now explain the results by region for the first half of the year. Japan maintained a strong organic growth rate of over 5% in the three months of the second quarter, continuing the momentum of the first quarter to post strong performance for the half-year period. However, all international regions recorded negative organic growth. By market, the United States, the United Kingdom, China, and Australia reported negative organic growth, while Spain, Poland, Taiwan, and Thailand recorded positive organic growth. Japan, the largest region accounting for around 42% of the group's net revenue, posted an organic growth rate of 5.3% in the first half, with both net revenue and underlying operating profit reaching record highs. This was the ninth consecutive quarter of positive growth for Japan and the third consecutive quarter of growing at more than 5%. During the three months of the second quarter, Internet media continued to support the strong performance of the marketing business, driven by business expansion with existing clients and revenue recognition from new clients won through pitches. In fact, Internet media recorded six consecutive quarters of double-digit turnover growth. Furthermore, in addition to BX, the business transformation domain continued to achieve double-digit growth. DX, the digital transformation domain, also recorded strong growth. Staff costs in Japan increased somewhat as we worked on strengthening our talent base. However, the increase in net revenue was much greater, and as a consequence, we were able to record a strong operating margin of 24.6%, maintaining the momentum from the first quarter. Having said that, this does include one-off effects such as a bonus provision being reduced at a certain subsidiary. The Americas, which accounts for around 28% of the group's net revenue, recorded negative organic growth of 3.4% in the first half. Despite improving from - 5.1% recorded in the first quarter, the six-month performance was slightly below our expectations. The organic growth rate of CXM in the second quarter recorded a quarter-on-quarter improvement, showing signs of stabilization. However, continuing uncertainties in the macro and business environments have partially impacted clients' marketing spend, and as a consequence, CXM recorded a high single-digit negative growth for the first half of the fiscal year. Media continued to remain relatively stable, with the half-year result more or less being equivalent to what we achieved during the corresponding period last year. Creative recorded a slightly negative growth in the six-month period. Despite the decline in net revenue, we were able to improve the half-year operating margin by 150 basis points year-on-year to 21.7% as a result of controlled SG&A expenses, mainly in staff costs. EMEA's half-year organic growth rate was - 2.4%, slightly below our expectations. CXM continued to face challenging business conditions, recording high single-digit negative growth for the six-month period. Media remained relatively stable with a slightly positive growth, and Creative recorded a low single-digit negative growth. During the three months of the second quarter, CXM continued to struggle in the UK and Northern Europe, with the UK recording high single-digit negative growth. In contrast, Spain and Poland posted mid-single-digit positive growth. Operating margin remained at 4.7% despite controlled SG&A expenses. APAC's half-year organic growth rate was negative 8.9%, slightly below our expectations. CXM and Creative struggled during the six-month period, both registering double-digit negative growth for the period. In contrast, media remained relatively stable. China and Australia faced challenges during the three months of the second quarter. A slowdown in Creative in China, in particular, due to reduced spending by Japanese clients, weighed heavily on the results. Meanwhile, Taiwan and Thailand continued to post solid performances, maintaining the momentum from the first quarter. Despite maintaining control over SG&A expenses in APAC, we recorded underlying operating loss for the half-year period, continuing from the trend of the first quarter. Next, I would like to explain the changes in the group's underlying operating profit from the corresponding period last year. Underlying operating profit for the first half of the fiscal year increased from ¥63 billion- ¥67.5 billion. Net revenue increased by ¥12 billion in Japan, however, decreased by ¥15.2 billion in the international business. As such, the group recorded a ¥3.3 billion decrease in net revenue. Staff costs increased by ¥5.1 billion in Japan, mainly due to the strengthening of its talent base, but decreased by ¥8.9 billion in the international business driven by the Americas and APAC. With a decrease of ¥1.1 billion in central costs, staff costs for the group as a whole decreased by ¥4.9 billion. Other operating expenses decreased by ¥3.6 billion, driven by a review of outsourcing fees and travel expenses. That is all from me, and I would like to hand back to Igarashi-san to explain our F/I 2025 consolidated guidance and our dividend outlook. [Foreign Language] Thank you, Shigeki. I would like to explain the revisions to our consolidated guidance. In the second half of the year, we expect our Japan business to continue to see positive growth. In our three international business regions, however, while the media business is relatively stable with new client wins, the challenging business environment is expected to continue due to the slower recovery in CXM, as well as project losses and budget reductions from existing clients in Creative. Furthermore, the uncertain macro environment is expected to continue. Therefore, F/I 2025 group organic growth guidance will be revised from circa 1% to broadly flat. Organic growth of circa 3% for Japan will be maintained. The international business organic growth guidance is revised down from aiming at positive growth to negative circa 2%. On the other hand, operating margin of circa 12% for fiscal 2025 will be maintained, taking into account swift cost control initiatives in response to the business environment and the partial realization of the effects of the rebuilding our business foundation initiative that we have been promoting since the beginning of the year. Reflecting the second quarter goodwill impairment loss of ¥86 billion and a review of costs for rebuilding our business foundation, we have revised our statutory operating profit guidance from ¥66 billion to a loss of ¥3.5 billion, and our guidance for net profit attributable to the owners of parent from ¥10 billion to a net loss of ¥75.4 billion. Turning to dividends. Today, we announced the recording of a loss on valuation of shares of subsidiaries and associates of Dentsu Group Inc. on a non-consolidated basis. This valuation loss is only for accounting purposes and does not affect cash. However, as a result of this valuation loss, on a non-consolidated basis, Dentsu Group Inc.'s retained earnings have decreased significantly. Therefore, it is deeply regrettable that we have decided to suspend the interim dividend for and to revise the forecast of the year-end dividend to currently undetermined. Originally, the interim and year-end dividends were expected to be ¥69.75 each, to result in an annual dividend forecast of ¥139.5 for 2025. Let us announce the year-end dividend forecast once we have decided its appropriate level based on profits from business, the progress of asset sales, which we have been consistently working on, and future capital allocation from a medium-term management perspective. We will strive to stabilize dividends as soon as possible from 2026 onwards. The Japan business performed well in the first half of this fiscal year, achieving record-high net revenue and underlying operating profit. Organic growth exceeded 5% for three consecutive quarters. As a result, group underlying operating profit also increased 7.2% year-on-year, demonstrating solid performance. On the other hand, due to the challenging business environment in the international business, we regret that we have revised down our full-year guidance, recorded impairment loss, suspended interim dividend, and remained the year-end dividend forecast undetermined. In order to restore our recovery and profitability at an early stage, we will further focus on rebuilding our business foundation and reevaluating underperforming businesses. Furthermore, for international business, we will explore and implement strategic alternatives, including comprehensive and strategic partnerships. As we consider more fundamental measures, we will review our current midterm management plan as needed, with the aim of achieving sustainable improvements in corporate value to maximize shareholder value. That is all for me. Thank you for your kind attention. I'll hand it back to the moderator. We will now begin the Q&A session. If you have a question, please use the raise hand function on the Zoom screen or press Star nine on your phone. I will ask you to unmute yourself and state your name and affiliation before asking your question. We are confirming the names of the people who are raising their hands. Please bear with us for a moment, and please keep your hands raised. Thank you for your patience. The first question will be from Abe-san of Daiwa Securities. Please unmute yourself, state your name, affiliation, and before asking your question. This is Abe from Daiwa Securities. Thank you very much for your presentation. I have two questions. One is about dividend. In the past, under ¥39 to be maintained. Basically, the direction was that you will not reduce the dividend level from next fiscal year. What was your mindset change leading to this revision, your thinking, and dividend payment for this year? Net income, 35% payout ratio on an underlying basis, is that the idea you have in mind? That's my first question on dividend. My second question, downward trend, I think, is being expressed in the international business, but including foreign exchange environment, do we still need to expect some downside impact going forward? Your view on that, please. [Foregn Language] Mr. Abe, thank you very much for your questions. Two questions with regards to dividend. That was the first question. The dividend has been revised down. What is the thinking behind it? Give us some color. With regards to the dividend payout rate level, 35% had been the guideline in the past, but is this still maintained? I will ask Shigeki to respond to this part of the question. If needed, I would like to also make some supplementary comments. As for the changes in the external environment, that was the second question. From the second half of the year, as risk, what kind of changes do you expect or anticipate? Give us some color in terms of the market environment, the external environment by market. I would like to give a response to that, but I would like to, first of all, ask Shigeki to respond to the first part of the question. This is Shigeki speaking. Thank you for your questions. As I explained, for the reasons, the full-year forecast has been revised down for F/I 2025. That's one reason. Because of that revision, 2026 and beyond growth rate, especially in the Americas, we had to revise that. Those two are the main contributing factors. In terms of value, Americas has had the biggest impact. As of February, we had quite a conservative number in mind, and yet the impairment has been conducted. Taking into account further growth beyond 2026, according to the impairment model, at least for the Americas, there was a need to further revise down. Therefore, in order to seek further growth, we have decided to change the capital allocation in order to ensure stability. That has led to us cutting our dividend. In terms of payout ratio, 35% is in our mind. Yes, this is Igarashi speaking. With regards to payout ratio, stably keeping 35%, this has been our policy in the past. This time around, with regards to year-end dividend, it is undetermined at this moment. I would appreciate if you could bear that in mind. Now, with regards to risk factors, the second part of your question, for the first half, risks in the external environment basically had little impact. We were not under any kind of pressure from the changes in the external environment. From the second half onwards, macroeconomic factors had to be factored in as a risk factor. That was reflected in the guidance. With regards to specific markets, the Americas, I would say, is quite big. For 90 countries, the tariff measures that were announced on the 7th of August in all these respective markets, I expect there will be some impact one way or the other. Risk factor-wise, inflation in the Americas had to be taken into account for the second half of the year. Apart from that, AI across various fields, it's becoming very prevalent. Needs from our clients have become very sophisticated with the advent of AI, and we have been facing the need to address that. Therefore, AI's impact in marketing is, rather than seeing this as a risk, this is something that we need to address. I hope that responds to your question. Thank you very much. Thank you very much, Mr. Abe, for your question. The next question is from Mr. Julien Roch from Barclays. Please unmute yourself, state your company's name, your name, and please ask your question. Hello, can you hear me? Yes, we can hear you. Please go ahead. Thank you. My question is, in the presentation, you say you aim to expedite the implementation of comprehensive and strategic partnerships for your international business. What do you mean by that? What are those comprehensive and strategic partnerships? Would you be open to selling emerging international with another company? Thank you. Thank you very much, Julian, for your question. What does the comprehensive and strategic partnership mean? Does it include a potential sale of our international business? I think that was your question. As we have explained in this earnings announcement, in our midterm management plan, we have been talking about rebuilding of our international business. We have been working on enhancing our competitiveness. For this, we are going to rebuild our business foundation, and we are going to also reevaluate our underperforming business. We are making steady progress on this. On that basis, when we look at the current situation, the current structure of the organization or the capital structure of what we have right now, we are not going to take those as a given. Depending on the environment and the circumstances that we are facing, we need to consider a bold effort. In that regard, we are continuing with the study by retaining external advisors who have expertise and knowledge. If it is to achieve rebuilding of the business in the early timing, there is an option for us to accelerate business rebuilding through partnership with a third party. In regards to the divestiture of the international business, we are not at a stage of being able to give any clear response at this point in time. I am not in a state of being able to talk about anything specific right now. To give you an example of a partnership, in regards to some of the underperforming business, we may accept external capital or what we are considering right now, the corporate function. This could potentially be subject to quite a bold outsourcing. These are the things that are included in the study right now. At this point in time, nothing has been decided as yet. Once we reach a decision, we intend to make disclosure and communication quickly. I hope you understand. Thank you. Thank you very much for that question. Next question is from Nomura Securities. Mr. Harahata, please unmute yourself, state your company name, your name before asking your question. Thank you very much. I am Ryohei Harahata from Nomura Securities. I have just one question. About impairment risk going forward. For international business, you will be scrutinizing for the year, and you will decide on the region and the size. With this impairment, have you been able to conduct the impairment that will be required? Therefore, there will be no impairment required in the future. I would like to hear your views on that. Mr. Harahata, thank you very much for your question. In of impairment risk, what is the view of the management? Is the question. I will ask Global CFO Shigeki to respond to this question. This is Shigeki Endo speaking. Thank you very much for the question. Regarding impairment, in the impairment test, 2025 net revenue growth rate, not only that, but also medium-term gross profit margin and also external factors are also factored in, or foreign exchange, among others, are involved in a complex matter in the impairment test. It is discussed with the accounting firm. 2025 sales growth, revenue growth alone will not determine the outcome. Having said that, the guidance that we've revised this time, it's very critical that we achieve this revised guidance in Q2. If we do not revise the forecast of impairment risk for the next fiscal year, we are not expecting any further impairment losses. There are other external factors that will have an impact. Therefore, I will not deny the possibility that there could be additional impairment losses. Understood. Thank you very much. Thank you, Mr. Harahata, for your question. The next question is from Mr. Maeda from SMBC Nikko Securities. Please unmute yourself, state your company name, your name, and ask your question. This is Maeda from SMBC Nikko Securities. I do have three questions. Is there a limit to the number of questions that I can ask? No, you can ask the three questions. The first question is related to the previous person's question. In regards to thinking going forward, the organic growth rate for this year has been lowered by some 2%. For next fiscal year onwards, the organic growth or the net revenue for international business next year onwards, what was the number you have set for that in calculating impairment on this occasion? That is a hint for us to think in terms of the external factor environment. That's the first question. The second question is for the strongly performing Japan business. Three months ago, you were saying that the first quarter was good, but you were saying that there were some uncertainties in the second quarter indicating some conservatism. You have achieved strong results as you did in the first quarter in the end. The background to that, and also the second half of the year onwards, can we expect sustainability of this strong performance for the rest of the year? For next year onwards, can you continue to structurally grow the business in Japan? The third question is regarding sports and entertainment. Recently, there's been a lot of news flow from your company. I feel that you are putting a lot of emphasis in this area. For this business, the value of this business, how much earnings will it likely to generate? When we are forecasting your performance, I think this is going to be a quite important factor. I wanted to get some clarity on that. These are my three questions. Thank you very much, Maeda-san, for your question. Three questions in total you have asked. For the international business going forward, and there was an explanation about impairment, from next fiscal year onwards, what is the organic growth the international business is expected to achieve? What's the assumption used in conducting the impairment test on this occasion? I think that was your question, if this can be disclosed. For that question, Shigeki will respond. The second question is in regards to the Japan business, where we have maintained a strong performance in the second quarter and the reason for that and the forecast for next fiscal year onwards. That was what you have asked. For that, I will ask Mr. Sano from Dentsu Japan to respond. The third question is regarding sports and entertainment. What is the value of business that we are assuming in this regard? On that question, I will respond. Shigeki, please respond to the first question. This is Shigeki speaking. From January to June, the organic growth rate was -0.2%. For the full year, we are expecting 0%. Impairment next year onwards. For impairment, impairment is not for the international business overall, but what we refer to as the cash-generating unit, which is essentially a P&L unit. We consider the Americas as one cash-generating unit, EMEA as one cash-generating unit. That is what we use in evaluating impairment. Because of that, I need to explain the forecast for each of the regions. For the Americas and for F/I 2026, the organic growth is 1%. For F/I 2027 onwards, 3%. For EMEA, for F/I 2026- F/I 2029, 2.4%. That is the assumptions that we have used. That's all. Thank you. For the next question, Mr. Sano. This is Sano, CEO of Dentsu Japan. Thank you, Mr. Maeda, for your question. Three months ago, we did give somewhat of a cautious explanation. At that point in time, the impact of tariff was somewhat unclear, and I did respond with a bit of caution. For the past three months, our integrated solution has been assessed highly, and we have been able to capture new clients in competitive pitch, which has continued to perform well from last year. The restaurant, the last services, HR, everyday clients, automotive-related, or the government offices, in many of these areas, we have been able to acquire the handling of new clients. The advertisement media in the second quarter was 14.7% for a very high growth rate. In this year, too, we have been able to achieve double-digit growth again. Also, in Creative, we have been able to obtain double-digit growth, or H Media too, or H Media as well. We have been able to achieve double-digit growth. In the business solution area, we have continued to achieve double-digit growth again, steadily. Because of these, we have been able to achieve this growth. The third quarter onwards, based on what we can say at this point in time, we should be able to maintain a certain level of strength. As to whether we are able to achieve high growth that we have done for the first half of the year or not, that remains to be seen. We do expect to be able to achieve the growth, and we are still maintaining a high pitch win rate. Next fiscal year onwards, we should be able to expect a certain level of growth. That covers my response. In regards to your third question, regarding sports and entertainment, please allow me to respond. The expected size of this business, in this area, we consider to be an area where we will be making reinvestment. This is an area that we are going to focus on, and that is how we started our midterm management plan. Conventionally, we have been working on the initiatives in this area, and as I've explained before, in terms of the conventional sport area, we have been able to execute various sports projects with quite many clients. On that backdrop, sports and entertainment, we are needing to think about our growth strategy separately to an extent. It's difficult to communicate the business size for these efforts together, but by 2030, we want to make this business one of the main pillars of our business going forward. On that basis, we'll continue to roll out our investment strategy. The important point here is that many clients in regards to this area would like to see clarity on ROI, in other words, the impact or benefit they realize. In that regard, as I've explained before, the area of sports analytics, Dentsu Sports Analytics, is an area that is essential. By that, we are able to accurately verify the benefit of the client's investment appetite. You'd like to see something like this will enable us to achieve further acceleration. In regards to entertainment, it's mainly to do with the Japanese IP holders. How to roll out from Japan to overseas would be the kind of focus area where we will be forming various alliances. Southeast Asia, Middle East, Europe, and also North America, we feel that there are possibilities in all sorts of different markets in this regard. On this occasion, not just IP, but the creators in the entertainment area. How can we organize these creators? How can we utilize and leverage their creators? That was the thinking behind the formation of House of Creators together with the IP holder in Japan, Kodansha Creators Lab, and Roblox. With various IP holders in Japan, we're looking at what we can do in the games area. Not just a trial, but we have started practical business. I have explained in some detail, but this will become a new pillar of earnings for our business. By 2030, we want to grow this business to a sizable business. I do apologize for not being able to share with you specific numbers, but that concludes my response. Thank you very much. Mr. Maeda, thank you very much for your questions. Next question is from Tokai Tokyo Intelligence Lab, Mr. Yamada. Please unmute yourself, state your name and affiliation before asking your question. Yamada from Tokai Tokyo Intelligence Lab. Thank you for taking my question. I have two questions. My first question is for Japan business, Internet business. This is fairing well compared to your peers. I think the growth rate is quite significant. What is the background? Why is it that you're able to demonstrate such a strong growth? Please give us some color. That's my first question. My second question Impairment risk going forward. In the Americas. Short-term macro impact. Macro economic conditions have been taken into account in the second half of the year. In terms of internal capabilities, when you compare your own capabilities with other companies, what difference is there and to what extent that internal factor was factored in? If you could give us some sense of that. Thank you very much. Those are my two questions. Mr. Yamada, thank you very much for your questions. We have received two questions. One is with regards to Japan business, why the Internet business is faring well. I will ask Mr. Sano to respond to this part of the question. Regarding impairment risk, Americas macro situation was factored in. That was explained. With regards to capabilities, would that be a factor for impairment? That was the second part of the question. Our capabilities in the Americas, how do we see the current situation? I think that's how I can interpret your question. Therefore, I will ask Giulio, our CEO in Americas, to respond to this part of the question. How do we view our capabilities in Americas? What is the current situation? Whether there are any risks associated to internal capabilities that we need to take into account. Starting with Sano-san, Mr. Sano, over to you. Mr. Yamada, thank you very much for your question. Compared to industry average or compared to our peers, we are demonstrating strong Internet growth. Why is that? Is your question. From last year, there has been a number of big presentations where we have been able to gain big wins. That has had a big impact. It's not just for Internet. Our comprehensive solution has been valued highly, and that has led to wins. Internet was part of the package solution. If I could respond to your question, our comprehensive solutions have been valued highly. Therefore, we have been able to win the bids and be able to win big accounts. That has led to the strong performance. I hope I answered your question. Next question, I pass the microphone over to Giulio. Thank you. Thank you, Yamada-san, for the question on the capabilities and the outlook for 2025. The way we see that is that when we look, we need to look at the practice area. When we look at the media practice area, we remain cautious because of the macro scenario that we quoted before. We look at that as relatively stable, unless, of course, there would be the external environment accelerating in a negative way. When looking at CXM, we are seeing the business stabilizing. Igarashi-san mentioned the last few months, we are still seeing organic decline for the full year, but there is a month really showing stabilization. When we look at the, to your specific question on the capability, we are accelerating within the Media++ strategy, our effort in that area. We are considering scale platform with direct client activation within and beyond media. Stuff like retail media, social, or content supply chain, together with integrated enablers on analytics, will permit us to continue our journey. You asked specifically on comparing to our peers. I think that these areas are linked, especially with the client-centric position, will allow us to differentiate from our competitors. We continue to invest in these capabilities, and we are having clear contribution targets to both organic growth and OP over the next, not only 2025, but over the next three years. We quoted, for instance, in the last call, and we are continuing that, the launch of Gen Studio Dentsu+. That is the industry-first AI-powered marketing ecosystem, which is really AI-powered integrated marketing ecosystem for brands. This is another differentiated point in the content supply chain solution that is proving to be out of interest for our clients. I hope these examples answer to your question. Thank you. Yamada-san, thank you very much for your question. We are nearing the scheduled time to end the session. However, since we have other hands still raised, I would like to extend the session slightly to answer more questions. The next question is from Mr. Nagao from BOA Securities. Please go ahead. This is Nagao from BOA Securities. Thank you for the opportunity. I have three questions. The first question is about impairment, t rue, t he exchange rate, or the discount rate, or the macro environment. One example of the reason of recognizing impairment. The goodwill, essentially, is the result of the management judgment in the past. It shouldn't be based on the external factors, the business plan, or evaluation process. There was a structural issue which essentially led to the impairment of goodwill. As of February in 2025, you did make quite a conservative outlook, and you came up with ¥340 billion of impairment loss. You are registering impairment once again. As a management, the additional impairment loss that you have registered on this occasion, how have you assessed that? Together with that, the impairment on this occasion, in one sense, it is as a result of the business environment deteriorating than what you have assumed originally. That could be because of that management scenario or risk assessment. This may have been not strict enough. To prevent the same from occurring again, valuation at the acquisition, the PMI process after acquisition, how are we going to think about it? How are we going to change that? Can you show a quantitative target? I would like to ask Mr. Igarashi to share with me your thoughts in this regard. That was my first question. This is Igarashi speaking. Please allow me to respond. As Mr. Nagao has pointed out, in regards to the impairment on this occasion, will the management take this seriously? The judgment regarding risk may not have been strict enough. I feel that is a claim that I should accept front on. The judgment of the management in the past, determining the amount in acquisition, may not have been right, or PMI had not been thorough enough. In other words, not being able to sufficiently generate synergies. These are c ertainly t he factors that have led to the impairment have been recognized again on this occasion. The management, I do feel that we are responsible. On that basis, right now, when it comes to M&A, we are now in a state of focusing on internal investment regarding PMI as well. We have more strict rules regarding discipline in making judgment regarding M&A. We are more thorough in abiding by this type of internal rule. In that regard, whether it be Board of Directors or the Finance Committee, which is a committee under the Board, and M&A strategy, and PMI afterwards, generation of synergies thereafter, we now have a structure of being able to monitor this more closely, not just by the management side, but inclusive of the Board of Directors, the total management. Yes. Yes. Working on minimizing the risks associated with M&A. I didn't have the intent of explaining that the impairment was due to external factors. As a management, recognition may not have been strict enough. In that regard, I do agree. Thank you. The second question is that the impairment on this occasion, does it lead to the valuation loss of the shares that you have in the subsidiary, and the shareholder equity was damaged as a result, and you are not paying dividend on this occasion? I think this is the first time you are not paying dividend. The progress in asset sales, inclusive of the profit level, from the perspective of the shareholders. The resumption of the dividend going forward, what is the standard to be utilized? The timing and the nuance. What are your thoughts in that regard? That's my second question. Thank you for your question. As I have explained before, we have been working on asset sales, particularly the strategic shareholdings. We have been working on that thus far. We have also been working on selling down some other assets. We are going to step up further in terms of those initiatives going forward. By doing so, we want to secure the funds required to pay dividend. In other words, we want to be able to secure our retained earnings. We will be enhancing our initiatives to be able to secure the retained earnings to enable us to pay dividend. In terms of standard or timing for resuming the dividend, at this point in time, it remains to be determined. There are various reforms that we are working on right now, particularly comprehensive and strategic partnership initiatives for international business. Depending on final progress related to that, v arious factors will certainly have impact there, and those need to be taken into consideration as well. With all that considered, l ooking at the asset of capital allocation overall, after looking into that, we need to make a decision about final dividend. Once we have some visibility on this, we intend to certainly make a disclosure, so I hope I understand Thank you very much for your thorough explanation. I very much appreciate your comment. Our final question is regarding Japan, which continued to perform well from April to June. The domestic demand has expected to have been quite weak. From your perspective, the second half of the fiscal year, what do you expect to be the domestic ad demand? Together with that, recently, Larger retailers m ainly have been holding back the utilization of agencies, or they sometimes are responding themselves. From your perspective, do you expect this type of movement to expand going forward, or do you feel that that type of the efforts are limited? Together with your outlook for the domestic ad demand and the changes in the Internet area in regards to utilization of agencies, if you could make a comment on that, please. Thank you. FI 2025 second half of the year forecast for the domestic business, as well as what we are seeing recently, the larger retailers, they're changing how they deal with some agencies. Under that kind of environment, the impact towards the Internet area, what is our view? In regards to those questions, I'll ask Mr. Sano to respond. Thank you very much, Nagasan, for your question. This is Sano speaking. In regards to the business condition, as I touched upon before, the impact of the tariffs is having an impact on the Japanese companies because of the unclarity. I think that has settled to a certain extent. Of course, we cannot rule out the uncertainties completely, but it has settled down somewhat, and we expect the strong condition to be retained in the second half of the year from our business perspective. Some companies in housing, `On this occasion, this was quite sizable, so it was quite topical. In housing, it's something that has been talked about from quite a while ago. This has been the case overseas as well. It surfaces and it disappears, it surfaces and disappears. We expect something like this to continue in the future. If you look at the employment environment in Japan, internalization or in housing i t's not something we expect to take a deep root or expand going forward in any large ways In the end, it is more efficient to use the professional companies, or in the case of ourselves, they're able to freely choose the expert company rather than doing everything in-house. It's more beneficial to choose external providers. There are also companies who did go in-housing but ended up using an external company as well. What happened on this occasion with a certain company, we are not really expecting to see that expand to other companies all that much. That completes my response. Mr. Igarashi and Mr. Sano, thank you very much for your thorough explanations. Mr. Nagao, thank you very much. Thank you to all the questions. With that, I would like to conclude today's earnings call. Thank you very much for participating today. [Foreign Language]