Welcome to Dentsu FY 2025 third quarter earnings call, and thank you for joining us today. My name is Morishima. I'm from the Group IR office, and I'll be your conference operator today. Please be reminded 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. Today's presentation material is available on our website. Joining me today is Global CEO Dentsu, Hiroshi Igarashi. イガラシでございます。よろしくお願いいたします。 Global COO Dentsu and Chairman and Acting CEO Dentsu Americas, Giulio Malegori. Hi, everybody. It's Giulio here. Hi. CEO Dentsu Japan and Deputy Global COO Dentsu, Takeshi Sano. 佐野です。よろしくお願いします。 And Global CFO Dentsu, Shigeki Endo. 遠藤です。よろしくお願いいたします。 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 a financial update from Shigeki Endo. We will invite you to ask questions after the presentations. Mr. Igarashi, please start your presentation. Thank you very much for joining the third quarter FY 2025 earnings call today. Let me start with the nine-month summary and outlook. The nine-month organic growth rate was 0.3%, in line with our expectations, while the operating margin reached 13.0%, exceeding both the previous corresponding period and our expectations. Based on these nine-month results and the outlook for the fourth quarter, we are upgrading our full-year profit guidance. As for the year-end dividend forecast, which is currently undetermined, we will announce it once it is determined based on profits from business, progress on asset sales, and future capital allocation. As we announced in August, to achieve fundamental improvements in our international business, we will continue to explore and implement strategic alternatives, including forming comprehensive and strategic partnerships. Lastly, we will review the current midterm management plan as necessary, with the aim of achieving sustainable improvement in corporate value to maximize shareholder value. Let me move on to the highlights of the third quarter and the recent period. We secured a three-year media account for Vodafone across EMEA and also won a new Vodafone 3 account in the United Kingdom. We also won Carlsberg Britvic in the United Kingdom while we continue our global relationship with Carlsberg. In Japan, we have a new client, Zurich Insurance, to which we will offer the integrated solution of media and creative. In the United States, Hy-Vee, a leading supermarket chain, has appointed us as their media agency. This expands upon our existing retail media partnership. In APAC, we have welcomed a fashion brand, COS, as our new client. In addition, in the creative domain, we have been recognized at various advertising awards this year, including being named Mad Stars Agency of the Year. Additionally, at the Minsky Awards, one of India's largest AI festivals, Dentsu Global Services was selected as a leading global capability center in the AI innovation category. Next, a business update. The Japan business is performing strongly, driven by growth from existing clients and revenue recognition from new clients. The key to this success is our integrated growth solutions. For example, even when a project starts as a simple media assignment, we identify the core challenge and go beyond addressing it directly. We explore and propose solutions across a broad range of domains that truly support our clients' growth. Our strengths lie not only in advanced marketing powered by AI data and technology, but also in our broad capabilities spanning BX and DX, combined with our proven execution capabilities. Our track record of accurately capturing clients' needs, proposing optimal solutions, and delivering them to completion builds trust. This contributes to our competitiveness that drives high-pitch win rates. Looking ahead, we will continue to expand our integrated growth solutions to ensure stable growth for our Japan business. As outlined in our midterm management plan, Dentsu is working on advancing our Media++ strategy in our international business. Media++ is a strategy designed to drive clients' business growth by integrating media with CXM, creative, and data and technology, while elevating the core value of media services by harnessing the power of AI, data, and new insights to deliver greater added value. By incorporating new media such as retail media and social commerce, Media++ aims to deliver a more integrated and performance-driven approach that maximizes clients' marketing return on investment. Media++ has already contributed to a new business win with Dollar General, one of the largest discount retail chains in the United States in the retail media category. In EMEA, we have seen strong traction in major media pitches such as for Vodafone and BMW, enabling us to secure wins in those pitches. The positive impact is becoming increasingly evident across regions. Looking ahead, we will further accelerate its expansion across markets, including the US, the UK, Germany, and China. Media++ will be positioned as a key growth driver of our international business, and we will be focusing our internal investments more intensely in this area going forward. Next, I would like to talk about the progress of our midterm management plan. First, the rebuilding of our business foundation. As of the end of the third quarter, we recorded a cost of approximately ¥8.6 billion. For the fiscal year, we expect to record approximately ¥28 billion. While we will continue to book costs from fiscal 2026 onward, we remain on track to achieve the anticipated annual cost reduction in fiscal 2027 that will be needed for us to achieve an operating margin of 16% to 17% in that fiscal year. Next is about our internal investment. After a thorough review, we are now allocating approximately ¥12 billion this year to internal investment, with a strong focus on enhancing our AI as well as data and technology capabilities. Moreover, we will further sharpen our focus on the Media++ strategy in order to restore our competitive advantage. Now, I'll hand over to our Global CFO, Shigeki, to give you an update on our financial results. This is Shigeki Endo. Let me take you through the financial results for the third quarter of fiscal 2025. I will start with our key metrics. The organic growth rate in the first nine months was 0.3%, which was in line with our guidance disclosed on August 14th. For the three months of the third quarter, it turned positive at 1.4% year on year. Following on from the first and the second quarters, the Japan business continued to perform well in the third quarter, exceeding our August expectations. Meanwhile, the international business showed mixed results by region. The Americas and EMEA were generally in line with expectations, but APAC fell short. While organic growth was positive, the negative impact of exchange rates and other factors led to the group net revenue to ¥851.3 billion, a 0.8% decrease year on year. Subsequently, underlying operating profit was ¥111.0 billion, a 14.1% increase, and the operating margin increased 170 basis points year on year to 13.0%. Operating margin for the three months of the third quarter was 15%, higher than 12% for the same quarter the previous year and our August expectations. The year-on-year increase is mainly due to the strong performance of the Japan business. On a statutory basis, an operating loss of ¥7.4 billion and a net loss of ¥61.5 billion were recorded. The difference between the underlying operating profit and the statutory operating loss was mainly due to the goodwill impairment loss recorded in the international business in the second quarter. I will now explain the results by region for the first nine months. Japan, the largest region accounting for 42% of the group's net revenue, continued to perform well in the third quarter, with high organic growth exceeding 5%, as it did in the first and the second quarters. Meanwhile, all regions of the international business recorded negative organic growth rate for both the three months of the third quarter and the first nine months. By market year to date, the United States, the United Kingdom, China, and Australia reported negative organic growth, while Spain, Poland, Taiwan, and Thailand saw positive organic growth. Moving on to the detailed explanation of each region, Japan saw organic growth of 6.8% in the first nine months, with both net revenue and underlying operating profit reaching record highs. It marked the tenth consecutive quarter of positive growth and the fourth consecutive quarter of growth of 5% or more. The 9.9% organic growth rate in the three months of the third quarter was due to strong growth in all of the domains, including BX and DX. In particular, internet media led the Japan business, achieving double-digit growth and turnover for the seventh consecutive quarter, driven by business expansion with existing clients and revenue recognition from new clients won through pitches. Events such as sports events and turnover of TV media, increasing year on year for the first time this fiscal year, also contributed to Japan's performance. In Japan, we have increased staff costs as we continue to enforce talent expansion for future growth, but the increase in net revenue more than offset this, resulting in a high operating margin level of 24.6%, continuing the trend from the first and the second quarters. I will explain in more detail later, but based on the strong performance, we are raising our four-year forecast for the Japan business. In the Americas, which accounts for 28% of the group's net revenue, organic growth in the first nine months was negative 3.4%, which was generally in line with our August expectations. By business domain, CXM is relatively stabilizing as we confirm the sequential improvement by quarter in the organic growth rate. However, given the ongoing uncertainty in the macro and industry environments, we will continue to carefully monitor the situation. On the other hand, as mentioned at the time of second quarter earnings announcement, creatives saw reduced client spends and losses, resulting in a low single-digit decline in the first nine months. Media continued to remain stable, with results broadly at the same level as the previous year. Hence, the top line decline as a result of the SG&A expenses control, the operating margin for the first nine months improved 220 basis points year on year to 22.7%. However, as mentioned earlier, this also included the impact of the allowance of trade receivables recorded in the third quarter of the previous year. EMEA's organic growth in the first nine months was negative 1.9%, broadly in line with our August expectations. By business domain, CXM and creative were weak, while media remained stable. For the three months of the third quarter, the UK continued to face challenges in CXM, while Italy showed weakness due to client losses in the previous year. In contrast, Spain recorded positive growth in all domains, maintaining its mid-single-digit organic growth. As for operating margin, it remained at 7.9% for the first nine months of the year, despite our efforts in controlling the SG&A expenses. APAC's nine-month organic growth rate was negative 10.1%, below our August expectations. By business domain, CXM and creative continued to struggle with double-digit negative growth. Meanwhile, media remained stable. In the three months of the third quarter, India and Thailand showed solid performances, with Thailand in particular maintaining favorable momentum with a high market share. Meanwhile, Australia continued to face difficulties. Despite continued efforts to control SG&A expenses, APAC recorded underlying operating loss for the nine-month period, as was the case at the end of the first half-year period. Next, I would like to explain the year-on-year changes in the underlying operating profit. Underlying operating profit for the nine months increased from ¥97.2 billion to ¥111 billion at this fiscal year. Net revenue increased by ¥22.8 billion in Japan, but decreased by ¥22.3 billion in international business, excluding currency impact, resulting in a ¥500 million net revenue increase for the group as a whole. Staff costs increased by ¥9 billion in Japan, mainly due to talent expansion, but decreased by ¥12.5 billion in total in the international business, primarily in the Americas and APAC, resulting in a group-wide cost reduction of ¥2.6 billion for the period. As for operating expenses, Japan recorded a reduction of ¥1.8 billion and international business a reduction of ¥9.3 billion. Consequently, the group as a whole registered a decrease of ¥11.7 billion during the period. This decrease in the international business does include the impact of the allowance for trade receivables recorded last year, as I mentioned earlier in the Americas part. However, even if we exclude this impact, we were still able to reduce operating expenses. Lastly, I would like to go through our guidance for the fiscal year. As explained earlier, consolidated organic growth rate for the nine-month period was in line with the guidance announced in August, and with the international business falling short and the Japan business exceeding our expectations. In light of these factors, we have maintained our four-year guidance for consolidated organic growth rate at broadly flat. However, we will update our regional forecasts with Japan business revised up from circa 3% to circa 4%, and the international business revised down from circa negative 2% to circa negative 3%. As for the Americas and EMEA, forecasts remain unchanged. As for underlying operating profit, we will upgrade our August guidance of ¥141.6 billion to ¥161.2 billion in reflection of the strong performance of the Japan business, scrutiny of internal investments, and the anticipated realization of some cost reduction effects from our initiative in rebuilding our business foundation. As a consequence, we will upgrade our consolidated operating margin guidance from circa 12% to in the 13% range. With the upgrade of underlying operating profit guidance, we will also upgrade our guidance for statutory numbers with operating loss of ¥3.5 billion revised up to operating profit of ¥17.6 billion, and a net loss attributable to owners or parent of ¥75.4 billion revised up to a net loss of ¥52.9 billion. While these revisions in our guidance primarily reflect improvements in profitability, our international business is still expected to post negative growth for the full fiscal year. As such, we acknowledge that the situation remains to be uncertain. In concluding my presentation, I would like to stress that rebuilding our business foundation that we have been focusing on this year is making steady progress. With a month and a half remaining this fiscal year, we as the management remain fully committed to driving the reform and in achieving the guidance presented today. Thank you for your attention. I will now hand back to the operator. We will now begin the Q&A session at this moment. For questions, please use the raise hand function on Zoom or press star nine on your telephone. I will ask you to unmute, then please introduce yourself once your name is called upon. We are now confirming the names of those of you who are raising hand. Bear with us for another moment, please. The first question is from Abe-san of Daiwa Securities. Please unmute, state your name and affiliation before asking questions, please. Thank you. My name is Abe from Daiwa Securities. Thank you for the presentation. I have two questions. One is about Japan business. 10% increase in profit given the TV media business is very difficult. Will CXM need a good change? In the next year, can we expect the same level of profitability? My second question has to do with the impact of cost reduction initiative. I think the probability of success is rising. That's my impression. But of the ¥52 billion cut target, how much will you achieve this fiscal year? What will be the pace of achieving toward ¥52 billion next year? The intention must be to achieve upside through cost reduction next year, but I would like to ask about that. Thank you. Abe-san, thank you for your question. Thank you for your questions. Two questions. Your first question regarding Japan business, 10% profit increase in TV media. Given the CXM business, further growth can be expected next fiscal year. What is the kind of situation we are envisioning for this business next year? Sano-san will respond. Cost reduction of ¥52 billion must be achieved, it is assumed. What is the amount that's achieved this fiscal year? How much is expected next year? Endo-san will respond to that. First over to Sano-san. Abe-san, thank you very much for your questions. 9.9% growth, which was very good this year. What's going to happen next year? Of course, we will see some impact from Fuji TV, but it's not just TV media, but internet media is also growing at a very high level. As I mentioned earlier, business transformation, digital transformation, and AI, these areas are growing. We are receiving lots of orders. To a certain extent, I think we will be able to achieve robust growth. However, as was explained earlier, last fiscal year, Q4 was 8.4%. Five consecutive quarters, we've been achieving above 5%. There's pressure to achieve more year on year. We cannot promise anything at this moment, but mid-single-digit growth is something that we can expect, we hope. Thank you. Endo speaking. With the midterm management plan announced in February, ¥50 billion of expenses to be spent on rebuilding management foundation. Investing that amount and 2027 and onward, ¥50 billion of cost reduction impact is to be achieved. This year, we're expecting to invest about ¥28 billion. In December, mainly staff, we will see impact in terms of staff in December. In terms of the effect or the impact next year and onward, I think we are likely to see an impact of over ¥50 billion for the numbers this year. We're still examining them at this moment. Thank you very much for your answers. Abe-san, thank you, Mr. Abe, for your question. The next question is from Mr. Harahata from the Nomura Securities. Hello. My name is Harahata from Nomura Securities. Thank you very much for this opportunity to ask a question. I also like to ask two questions. The first is in regards to international business. I understand that you are considering various alternatives. I think you said that previously and this time as well. What is the most important thing, things that you don't want to change? In terms of your customers, what are things that they don't want to see changes in you? If you could share that as a hint to understand your course of direction going forward. Second is in regards to cost. My question overlaps some of Abe-san's question that the cost is the key point. That's what I wanted to ask about. What is the cost to be achieved next fiscal year for the three years? Were there any changes in terms of internal investment amount? These are my questions. Thank you. Thank you very much, Mr. Harahata, for your question. Two questions. In terms of the partnership for the international business, for your first question, we are considering various alternatives. What are things that we don't want to change? From the perspective of the clients, what are things that they don't want to see changed? I think that was your question. I will answer that question. The second question was to do with cost. This fiscal year, what are some of the costs that have been kind of delayed in terms of being realized? How much will there be in the next fiscal year onwards? Ms. Endo will respond to that question. Please allow me to answer the first question, partnership for the international business. This is something that we communicated in August. In many ways, we have been working on comprehensive and strategic partnership. We've been considering to look into this. We have been working on the various initiatives that we are trying to rebuild our business foundation. We are focusing on internal investment as well. To ensure strong growth is something that we are focusing on. In that regard, we want to work with partners who are able to contribute that. To be able to secure that element is an absolute necessity. In what areas are we going to enhance? Where are we able to secure growth? This is what we are currently looking into and reviewing right now. From the client's perspective, I think they are quite varied. Clients have entrusted us for many years and the value that we provide. They have assessed this favorably. For those customers who have continued to work with us and continue to partner, to be able to continue is to be able to continue, that is probably something that the clients don't want to see changed the most. The enhancement that we are doing for us to achieve growth and that to raise the expected level of the expectation from the client perspective, that's the kind of partnership that we want to realize. That's all from me, Endo-san. I will respond to the second question. This is Endo speaking. As I said earlier, the amount of investment this fiscal year is ¥28 billion. Majority of that is one-time expenses, retirement allowances related to people. In this regard, as of now, in the third quarter, we've invested about ¥8.6 billion. The remainder will occur in the fourth quarter. As for the total amount in the midterm management plan, we have already shared a number, and that's ¥50 billion. If we see the breakdown, about 80% will be one-time expenses, retirement allowances. The remaining 20% is essentially improving the efficiency, automation, and also standardization of business or the expenses related to that. For that part, the amount of investment has not changed in a significant way. It essentially remains the same. That is all for my response. Thank you. Just a follow-up. There were no the execution that has been delayed in comparison to the in comparison to the previous the announcement, the amount has changed, but there is nothing that has been delayed. That's what I wanted to ask. This is Endo speaking. We are making progress in accordance with the plan, but partially for Europe in particular, in regards to one-time retirement allowance in Europe, we still need to get the acknowledgement of the person in scope. In that portion, that could potentially be pushed back into the next year. But the amount of reduction, the amount that we will realize as a target remains unchanged. Thank you very much for the thorough explanation. Harahata-san, thank you very much for your questions. The next questions will come from Tokai Tokyo Intelligence Lab. Yamada-san, please. Yamada from Tokai Tokyo. Thank you very much for this opportunity to ask questions. I would also like to ask two questions. First, I would like to ask about the details of the background to Japan business, which is performing very well. Internet media is growing fast. TV media is robust as well. It seems that Dentsu is doing better than your competitors. Internet media is growing very robustly. What is the background to that? If you could please elaborate. As you said, integrated solutions are being increasingly appreciated by your clients. Is that the case? As a result, you are getting more orders and expanding business. That's my first question. Second question is as follows. This is also about the Japan business. Next fiscal year. Internet media growth expectation. How much growth are you expecting next year? This year you are performing very well. The hurdle must be higher for next year. Do you think you will be able to outperform the market's average growth next year? Yamada-san, thank you very much for your questions. Two questions regarding Japan business. The background of Japan's well-performing business, it seems that one of the factors behind is strong growth in internet media. Why? Before we were talking about proposals for integrated solutions that had a positive impact, but is that the answer today as well? Second, again, on internet media business, what is the expectation next fiscal year? Do you expect to outperform the market next year? Both questions will be answered by Mr. Sano. Sano speaking. Thank you very much for your questions. We have recorded and remembered my answer that I gave previously. Thank you. As you mentioned, internet media is a means for clients. The purpose is to improve our marketing ROI. Various medias are combined in our proposals and we're chosen. As a result, internet media business is outperforming our competition. As you rightly mentioned, that is the factor behind our success. As I said, business transformation is ongoing and that is broadening. As a result of that as well, we are performing well. There are some market forecasts that are put out. Compared to this fiscal year 2025, next year's market growth will be somewhat lower, but it will continue to grow. Is Dentsu going to be able to outperform the market? Sorry for being conservative, but so that we can outperform the market, we would like to further strengthen our integrated solutions, make proposals based on that so that we will be able to outperform the market next year as well. That's all for my answer. Thank you very much for your answers. Thank you very much, Mr. Yamada, for your question. The next question is from Barclays, Julian Roche-san, please. Julian-sama, can you hear us? Mr. Roche, can you hear me? Can you hear me? Yeah. 聞こえております。大丈夫です。 We can hear you. Please go ahead. Good morning. Thank you very much for letting me ask questions, two if I may. The first one is, if I put together your three regions outside of Japan, your organic in the first nine months was a decline of 3.8%. How much of that decline was net new business loss versus how much was existing client spend declining? The second question is following up on the strategic review of the international business. In your previous answer this morning, you said you were looking for partners that could help you accelerate growth while continuing to service your existing clients. Can you give us any idea in what areas you believe you would need partners? Media, creative, Merkle, somewhere else? Thank you. はい、よしさん。 Thank you very much, Mr. Roche, for your question. I have received two questions. Then the three regions other than Japan for the nine-month period, we ended up with a minus 3.8% organic growth. So the loss of the existing client or are we losing the new client in terms of pitch I think you're asking about? Asking as to whether these were the factors behind the minus 3.8%, I would like to ask a global CEO of Dentsu Group, Julio, to respond. For the second question, in regards to us looking at the partnership, what are the partnerships for accelerating growth or what area? I will respond to that question. I would like to ask Julio to respond to the first question. Thank you. Thank you, guys. Thank you, Ross, for the question. It depends on the practices, I would say. Your question is how much is existing client and how much is lost client. When we look at the media practice, there are some losses, but most of it is also decline on spend from existing client, I would say, which is probably 60-40 in that regard. When we look at the Merkle, the CXM business, clearly this is a project-based business, so it's not that much losing, not loss of client, but it's more the variation on the number of projects for existing clients. I would say that on the CXM area, there are no major losses of clients. It's just a number of projects by clients that diminished. On the contrary, when we look at the creative practice, which, as you probably know, is the smallest of the international business, there has been a component of lost clients. This is especially in the US. For the creative practice area, probably I would say that 70% of the decline is lost clients. The net wins have not been able to compensate the loss. There is variability, of course, on the client portfolio, especially in project-based business like creative, but the issue has been that we didn't compensate some of the losses with enough win, and this resulted in a negative. I hope this answers your question, Ross. Thank you. はい、続きまして2問目の。 This is Garashi. Please allow me to respond to your second question. In regards to partnership for accelerating growth, your question was what we refer to as our practice, our business domain, whether it be media or creative or CXM, in which area are we going to seek partnership to enable acceleration in growth? I understand that was your question. My response is that we are considering all types of different possibilities in looking at partnership. It's not the case that we are focusing on one particular area. We are not just looking at a single area. Of course, there are various processes, and we are looking at whether we can make contribution to enabling growth in certain areas. Of course, we will look at all that. But we are not limiting this partnership consideration to a certain area. We want to achieve a comprehensive growth, and we are looking for partners who will contribute to enabling overall growth. This completes my response. Thank you very much. Julian-sama, thank you for your question. Mr. Julian Roche, thank you for your answers. The next questions will come from SMBC NIKKO Securities. Maeda-san, please go ahead. Yes, Maeda from SMBC NIKKO Securities. I also have two questions. First, comprehensive partnerships that you are examining to pursue them. Unless you have the specifics, you will not be able to announce, I would assume, but partner selection, partner negotiations in terms of those, do you think you are making progress successfully in terms of seeking partnerships, or do you think that the hurdle is pretty high for identifying a partnership? What is the timeline? Are you looking for a partner by the end of next year, for example? My second question. The other day, Hakuhodo, their North America consulting business is recovering, they said, and AI transformation type of business is increasing for Hakuhodo. Well, in your case, DX demand has run its circle. It's deteriorating, but with respect to AI transformation, do you think that the business environment is improving for you as well going forward? Do you think that AI transformation type of business will be a tailwind for you? So global consulting business, especially centering around North America and other adjacent areas. What are your thoughts? Maeda-san, thank you very much for your questions. To address your first question regarding partnerships that we are studying, and is the process of considering partnerships going well? When are we going to have a conclusion? Is it a plan for next year? That will be answered by Garashi myself. Your second question regarding North American consulting business is becoming active due to AI transformation need according to Hakuhodo. Well, at one point in the past, it was not very good, but consulting business in North America is now on a recovery track. What is the prospect? That was your question. For that, the Chair of Americas, Julio, will be answering that question. So to address your first question, partnerships without restricting ourselves to constraints, as I said, we will consider various types of partnerships. So on a broad ranging basis, we are considering a variety of potential partnerships. The process that we envision, is it moving? Well, I would say that we are moving through the process as planned. However, in partnerships, there are counterparties that we have to work with. So frankly speaking, I will not be able to suggest a timeline at this moment. However, this is something that requires speed given the severity of the external environment and the changes happening in the environment. We need to respond to such changes, and we must enhance the value of our proposals to our clients. So in that regard, at the earliest possible stage, we would like to come to a conclusion on a partnership that we're going to have. So I would like to turn to Julio for the second question. Julio, please. Thank you. Thank you very much. Thank you, Maeda-san, for the question. In the North America business, you know, the DX offer is part of the offer that we and the work that we do at Merkle level in CXM, and therefore is developing and is recovering slightly. When we look at the AI impact on that as an acceleration, this is more centered on the Media Plus Plus strategy. I would say that there's been in the recent wins that Iglesias mentioned at the beginning of the call, there's been clearly a component of the element of the digital transformation for our clients in terms of integration and delivery of different capabilities within the digital offer. More specifically, the acceleration that we are looking at in AI is once again referred to the deployment on the Media Plus Plus strategy. A good example of that is clearly the AI platform of Dentsu Connect, which is helping our client by using generative audiences and enabling AI-driven target setting, consumer profiling, and last but not least, communication planning. The same is for generative audience where again this helps within the Media Plus Plus strategy in the development of the digital transformation. Thank you. すみません、一点フォローアップでお願いできますでしょうか。 May I ask a follow-up question? Just one, please. So Media Plus Plus that you talked about and acceleration through the use of AI at this moment in the stock market, your international business is having difficulty on its own, and it seems that the views are pessimistic about your international business next year as well. But through such initiatives that you talked about, do you believe that you will be able to bring the business back to organic growth, excluding the media environment because of the factors that you have on your own? Do you think that you will be able to come to a turnaround point? Thank you for the question. Iglesan speaking, this is a follow-up question for North America. So let me focus on North America. Regarding North America, as Julio answered, in the area of CXM, just to explain, we have an asset called Merkel there, and the portion of North America in that business is very large. For many years, the area of CXM has had challenges, and I think that is understood by Maeda-san and other people. Earlier, Endo reported on our Q3 performance. As he said, CXM in North America, the area covered by Merkel, continues to be tough, but negative growth is becoming better and better quarter after quarter. It's improving. Rather than the whole market improving overall, the new management system that we have put in place since February this year has been conducive in addressing client challenges, and that is leading to an increase in the number of leads. We are also looking at reviewing the pipeline. So month after month, we are seeing recovery, I think. Next year, I'm sure that we will be able to head toward a more positive direction. Now, another point regarding media, one of the topics is the consolidation of the agencies, and the scale merit is very much focused upon. Our Media Plus Plus strategy is generating good results because it combines media and retail media and others, as we discussed. So in this area of media, we are expecting strong growth. The value of international business, especially the United States, which commands a high portion, it is essential that we achieve a turnaround in that business, and that is something that we're looking to achieve so that our corporate value will be acknowledged. Thank you. Thank you very much. Thank you, Mr. Maeda, for your question. We are nearing the conclusion time, but we still have many hands up, so we'd like to extend and respond to your questions. The next question is from Mr. Nagao from BOA Securities. Go ahead. This is Nagao from BOA Securities. I have two questions. First, in terms of internal investment, do you plan to invest ¥12 billion this year? But AI is causing changes in clients and changing the behavior of consumers more than expected initially. So on that basis, is ¥12 billion sufficient? What will be the size of internal investment that you're thinking of next fiscal year? The second question is in regards to the dividend. The year-end dividend remains to be undetermined at this point in time, but you have the plans. You should be able to anticipate the profit from business in terms of asset sales. I think this will be management and a vision as to whether you will sell or not. The plan that you've changed for this year, so the profit attributable to all of our parents is still about minus ¥40 billion. So I don't know whether you're in an environment of having to make a dividend given the fact that you have investment for AI as well. I think in terms of capital allocation, you have more important areas of spending money. But if you could explain as to why you have continued to remain undetermined for the year-end dividend. Thank you very much, Nagao, for your question. I received two questions. The first question is in regards to internal investment and for AI, whether it be customers or the consumers, we are seeing significant changes. So in that regard, you feel that there is a need to make investment into the AI. So the ¥12 billion of internal investment for this fiscal year is sufficient, particularly given the fact that you need to invest in AI. Also you wanted to ask about the thinking for next fiscal year. This will be responded by myself, Yugarashi, and Endo-san will respond if there is addition to make. In terms of dividend, the business state and asset sales, and looking at the net profit level, if you take all these into consideration, and also the capital allocation perspective as to whether to pay dividend or not, you should be able to come up with a course of direction and what needs to be focused upon given the fact that you have the investment for AI and that you have referred to earlier. Now, that question will be responded by Endo-san. So I'd like to respond to your first question. In terms of internal investment, we are assuming about ¥20 billion initially. So we scrutinize the internal investment for this fiscal year. So the amount has been reduced to ¥12 billion, as I have explained, in particular for AI. Is it sufficient or not? So that was your point. Now, in that regard, our thinking regarding AI is that, of course, we will be making investment on AI on a standalone basis ourselves. But a unique initiative that we have is that we have initiatives with various platforms, and we've been ahead of others in this area for quite many years, whether it be data, whether it be the area of content creation. We have been working with the various platforms, and we have moved in this area ahead of others. So how can we use that in responding to the clients' issues? Now, we have many options to choose from, and we are able to combine those to provide the appropriate AI solution. We are in an environment to be able to enhance that. So it's not just the amount of internal investment as to whether our investment is sufficient or not. Is that sufficient in strengthening our solution? That is not only the perspective that should be used as a basis to make your decision. For next fiscal year as well, I suppose leading initiatives with the platforms at the center. We have various unique capabilities that we have, which we will work on enhancing. So that's the major course of direction for us going forward. Here, we want to do a sufficient amount of customization with our clients. For us to engage in this type of initiatives of others, and that is the unique element of our initiatives with the platforms. So that is my response. The second question will be answered by Ms. Endo. This is Endo. Please allow me to explain from a few perspectives. First, in terms of the capital allocation and how we think about that. Now, from our perspective, what we are working on right now, we are working on rebuilding our business foundation. Over a medium to long-term perspective, we are focusing on achieving growth, and we're making internal investment to realize that. We also have the dividend aspect. Also, we need thorough communication with the supply side. We want to engage in such communication with the market too. On that basis, right now, when it comes to dividend, the securing profit that is distributable, and we are focusing on that. So we've been selling the strategic shareholding. So dividend of returned earnings from subsidiaries. We are also considering the disposal of some real estate as well. But at the year-end forecast, in that regard, at this point in time, as of the third quarter, we have not registered impairment as yet. But the situation overseas remains uncertain. So I am unable to say that we are completely free of the possibility of having to take impairment this fiscal year. As I've explained at a previous occasion in regards to impairment, when we look at the forecast for this year, whether it be net revenue or whether it be for revenue, but the medium to long-term growth of net revenue from next fiscal year onwards, that will be used in calculating the impairment possibilities, interest rate, the foreign exchange rate. These factors also need to be taken into consideration in discussing with the accounting auditor in the end. So at this point in time, as for dividend, so we want to secure a distributable profit as much as possible, and whether it be strategic shareholding sales, but we will do our utmost to be able to secure those amounts. May I ask a follow-up question? So you're going to make maximum effort in terms of management to secure the profit for distribution, but there could be plus or negative of international impairment, international business impairment. So that is the reason as to why the dividend remains to be undetermined at this point in time. Am I right? Yes, your understanding is correct. Thank you for your questions. Next, Mr. Russell, appointed from Edison Group, please go ahead. Good morning. I have two questions, if that's okay. First of all, there's been a good mix in the account wins of extending existing relationships and new business wins. So are you able to talk about what you think has helped to contribute to those wins from what you've done in your business? My second question is, I think there's a slower rate of restructuring spend. So does that mean there's a slightly slower rate of profit improvement through to 2027? Thank you. はい、ラッセル様、ご質問ありがとうございます。 Mr. Russell appointed, thank you for your questions. So account wins regarding that. Existing customers as well as new customer acquisitions. The pitch wins. The mix is pretty good, and you asked about that. The status of current accounts for existing customers and new client acquisitions. What is our assessment? How do we view that? I would like to respond to that. If there are any additional comments from Endo, I will ask for them later. The second question that you asked is about the slow speed of restructuring or the slow spend of restructuring. 2027, toward that, the restructuring spend cost, is it progressing as planned? Do we think that we will be able to hit the goal? That will be answered by Endo-san. First, regarding the status of accounts, we have various pitches we're making and the circumstances surrounding that. While talking in particular about our international business, media, creative, and CXM, in all practices, net wins are accumulating. That is where we are overseas. The current pipeline, of course, we have different projects. 83% of media pitches are offensive. Creative, 74% is offensive pitches. Maintaining existing customers, that is our overriding assumption. Plus, how many new customers can we acquire? We are looking at that. As a result, we're having this pretty good mix, as you pointed out. First and foremost, we're focusing on maintaining existing clients, and that will continue into the future. With respect to CXM, this is a long-range business. We have a new business pipeline, and the pipeline is increasing and growing. Therefore, for CXM as well, inclusive of cross-selling to pipeline is increasing and growing. Therefore, for CXM as well, inclusive of cross-selling to existing clients and acquiring new clients, how to go about doing that is something that we always focus on. I think we're in a pretty good situation in that regard right now. For Japan, pitch wins are pretty high in different areas. Frankly, here in Japan, we're not having losses of existing clients. The fact that we're having increasing pitch wins of new customers is contributing greatly to existing clients. The fact that we're having increasing pitch wins of new customers is contributing greatly to our good performance. We have to make sure to achieve pitch wins in all practice areas. That is something that we would like to continue to ensure in the future. Regarding restructuring, I would like to turn to Endo-san for an answer. Endo speaking. The status of restructuring, we announced our midterm management plan in February. Targeting 2027, we have set several KPIs. One of such KPIs is operating margin percentage. That is to be 16% to 17%. That is the target toward 2027 based on that. The cost base right now, with that as a baseline, we would like to achieve a cost reduction of ¥50 billion. That is the target. Achieving ¥50 billion is not the goal per se. Our ultimate goal is to achieve operating margin of 16% to 17%. As a result, vis-à-vis our competition, we would like to ensure good competitiveness on our part. ¥50 billion, we are confirming where we are every month as to how much progress is being made. We're spending part of that for retirement allowances. There are to be paid considerably in December onwards. We will be seeing that impact next year. At this moment, we are progressing on plan. Of course, we would like to be speedy to work toward the 2027 target. With the target of achieving ¥50 billion or more, we are taking actions, and we're on plan. That would be all. Thank you very much. Mr. Point and other people, thank you very much for asking questions. With that, we would like to conclude the earnings call. Once again, thank you very much for taking time out of your busy schedules to join us today. Thank you. Thank you. Thank you. Please disconnect. Thank you. Thank you.