Welcome to Dentsu FY 2025 Earnings Call, and thank you for joining us at this evening. My name is Morishima from the Group IR Office, and I'll be your conference operator today. This is a reminder that today's call is being recorded. Furthermore, 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 materials are available on our website. Joining me today are Global CEO, Dentsu, Hiroshi Igarashi. Executive Officer, Executive Vice President, and Global Chief Operating Officer, Dentsu, and Chairman, Dentsu Americas, Giulio Malegori. It's Giulio Malegori. Good evening. Good morning. CEO, Dentsu Japan and Deputy Global COO, Dentsu, Takeshi Sano. [Non-English content] Global CFO, Dentsu, Shigeki Endo. Endo. Today's agenda will begin with FY 2025 Business Update from Hiroshi Igarashi. Shigeki Endo will then present FY 2025 Financial Update, followed by explanation of strategic update from Hiroshi Igarashi. We will invite you to ask questions after the presentations. Mr. Igarashi, please go ahead. Good evening, everyone, and thank you for joining our Fiscal 2025 Earnings Call tonight. The group's organic growth rate for fiscal 2025 slightly exceeded the guidance we announced in November last year, while our operating margins for both the Japan and international businesses outperformed the guidance, which was revised up in November. Japan achieved organic growth rate of 6.2%, while at the same time registering highest ever net revenue and operating profit. Despite our international business recording negative growth, we are seeing improved profitability due to the initiatives we outlined in our midterm management plan, which we announced in February last year. As for international business, we revised the assumption for impairment test and consequently recorded an additional goodwill impairment loss of JPY 310.1 billion in the fourth quarter of fiscal 2025. Following this accounting treatment, the balance sheet of goodwill on our consolidated balance sheet decreased to approximately JPY 320.1 billion, which is less than half of the level registered at the end of fiscal 2024. Furthermore, we reached the decision not to pay a year-end dividend for fiscal 2025, which we previously communicated as being undetermined. The reason being the significant negative distributable amount on the balance sheet of the non-consolidated financial statements of Dentsu Group Inc., which resulted from a loss on valuation of shares in affiliate companies, et cetera, which in turn resulted from the impairment of goodwill. Furthermore, we regret to announce that no dividend is forecasted for fiscal 2026 based on its similar reason. As for fiscal 2026, we are expecting the Japan business to continue its steady growth with an organic growth rate of 2%-3%. For the international business, we are expecting CXM in the United States to return to growth, which has been recording negative growth since fiscal 2023. We'll continue to work towards restoring our competitiveness and improving profitability. Additionally, we have filed a shelf registration for the issuance of bond-type class shares today in order to secure flexibility options for strengthening our financial position in preparation for future growth investments. Now, on recent highlights. Globally, our AI-driven advertising strategy was highly appreciated by Siemens and will result in our relationship being updated and expanded in more than 150 countries. In Japan, we were selected by Samsung Electronics Japan as its partner agency based on our comprehensive capabilities that include both our abilities to make annual proposals and to form teams for strong execution. In the Americas, we were able to expand our relationship into the media domain with a major retailer, BJ's Wholesale Club, building upon the trust we have established in the CXM domain. Also in Italy, currently hosting the Winter Olympic Games, we won Esselunga, one of the country's leading food retail brands, as well as Fastweb, following our success in the Vodafone Group in EMEA and the U.K. we announced in the third quarter. As for industry awards and recognition, Dentsu Creative New York won the Grand Prix prize at The Drum Awards. Furthermore, Dentsu Taiwan demonstrated its overwhelming competitiveness in the region by winning some 200 awards across various areas. Our CXM division was recognized as a leader in Gartner's Magic Quadrant for Digital Experience Services for the second consecutive year, reflecting the consistent strength of our technology and value we provide.... In addition, Dentsu Sports and Entertainment launched its operations in the Indian market, making an important step towards expanding our presence across Asia. I'll now pass the microphone to our CFO, Shigeki Endo, to update you on our financial results. This is Shigeki. Let me take you through the financial results for fiscal 2025. I will start with key metrics. The full year organic growth rate was 0.5%, slightly above our guidance of broadly flat, announced on November fourteenth. This was due to the strong performance of our Japan business, which widely exceeded expectations. Results in the Americas and APAC were generally in line, while EMEA was slightly below expectations. The organic growth rate for the three months of the fourth quarter was 0.9%, maintaining positive growth following the third quarter. Consolidated full year net revenue increased 0.3% year-on-year to circa JPY 1.2 trillion. But underlying operating profit decreased 2.1% year-on-year to JPY 172.5 billion, due to internal investments to restore our competitiveness, as we explained last February. As a result, the full-year operating margin was 14.4%. It fell 40 basis points below the previous year, but exceeded the 13% range guidance upgraded in November. This was due to the strong performance of the Japan business in the fourth quarter and cost controls in the Americas, as well as scrutiny of internal investments. Moreover, regrettably, following on from the second quarter, we recorded an additional Goodwill Impairment loss of JPY 310.1 billion in the Americas and EMEA in the fourth quarter. As a result of the recording of goodwill impairment loss of JPY 396.1 billion for the full year on a statutory basis, we recorded an operating loss of JPY 289.2 billion and net loss of JPY 327.6 billion. The impairment was recorded with new assumption for impairment test, reflecting a revision to the level currently assumed to preclude further impairment losses. I will touch on this later at the end of my presentation. Now let me explain our full year performance by region. The Japan business, which accounts for 42% of the group's net revenue, performed well throughout the year, achieving a high full year organic growth rate of 6.2%. Meanwhile, our international business saw negative growth rates in all regions. By market, the United States, the United Kingdom, Australia, and China recorded negative growth, while Spain, Poland, India, Thailand, and Taiwan saw positive organic growth. Next, detailed explanation of each region. In Japan, the full year organic growth rate was 6.2%, widely exceeding our expectations in November. Both net revenue and underlying operating profit reached record highs. As of November, we had anticipated a slight top line decline in the three months of the fourth quarter due to the high growth rate in the previous corresponding period. However, Japan recorded mid-single digit positive growth, with the marketing business exceeding expectations, driven by television, internet media, and marketing promotions, and one-off content-related revenues. For the full year, internet media in particular performed well throughout the period. Due to business expansion with existing clients and revenue recognition from new clients won through pitches, international has seen double-digit growth in turnover for 8 consecutive quarters. BX also achieved double-digit growth, with DX also performing well. In Japan, staff costs increased as we continued to implement talent expansion for future growth. The increase in net revenue more than offset this, resulting in a full-year operating margin of 24.4%, the same level as the previous year. I will come back on the guidance later, but we expect continued steady growth in Japan in fiscal 2026, with an organic growth rate of 2%-3%. In the Americas, which accounts for 26% of the group's net revenue, the full-year organic growth rate was -3%, in line with our November expectations. By business domain, CXM, which had been struggling, continued its sequential growth throughout the year and is indicating signs of bottoming out. We believe that this was driven by more precise analysis and evaluation under the new management structure, which strengthened the pipeline and led to wins of multiple new clients. Meanwhile, Creative saw a top-line decline due to reduced client spending and losses during the year. Media continued to remain stable for the year. Furthermore, the full-year operating margin was 22.9%, 40 basis points higher than the previous year. While making internal investments, the Americas reduced its SG&A expense by approximately 3% on constant currency basis through cost-controlling efforts and maintained its operating margin level despite top-line decline. In the Americas, we expect an organic growth rate of circa -2% in fiscal 2026 because of the anticipated top-line decline in Creative due to factors such as client losses that occurred in fiscal 2025, as mentioned earlier. However, CXM anticipates a return to positive growth. EMEA's full-year organic growth was -1.8%, slightly below our November expectations. This was due to delays in projects and change in scope for several clients in CXM. By business domain for the full fiscal year, both CXM and Creative recorded high single-digit negative growth. It will take some time for CXM in EMEA to recover, whereas, as mentioned earlier, CXM in the Americas is indicating signs of bottoming out. Meanwhile, Media, which accounts for more than 60% of EMEA's net revenue, remained stable. During the three months of the fourth quarter, the United Kingdom continued to face challenges in CXM, but Spain achieved positive growth in all of the domains. The full-year operating margin was 12.4%. Despite efforts to control SG&A expenses in response to top-line decline, the operating margin was slightly lower than the previous period due to factors including internal investments. We expect an organic growth rate of circa 1% for fiscal year 2026. APAC's full-year result was in line with our November expectations. However, the organic growth rate remained -6.8%. By business domain for the full fiscal year, Media remained stable, while CXM and Creative continued to face challenges, registering double-digit negative growth. However, the three months of the fourth quarter saw a slight turn to positive growth, the first since the fourth quarter of 2022. In China, Media, which accounts for a high proportion of the total net revenue, is turning to positive growth for the full year with increased win rate. We'll continue to strive for improved performance. The full-year operating margin was 2.5%, an improvement from the previous fiscal year, but still at a low level. However, we have implemented thorough cost control and SG&A expenses, including internal investments, decreased by approximately 8% year-on-year on a constant currency basis. This enabled underlying, underlying operating profit to increase despite the lower top line. For fiscal 2026, we are expecting organic growth rate of circa 1%. Next, I will explain about the changes in underlying operating profit from the previous corresponding period. Full-year underlying operating profit decreased by JPY 3.7 billion year-on-year from JPY 176.2 billion- JPY 172.5 billion. The group net revenue increased by JPY 3.3 billion from the previous fiscal year, as the JPY 28.8 billion increase in Japan offset the JPY 24.8 billion decrease on a constant currency basis in the three international regions. Staff costs increased by JPY 2.6 billion from the previous fiscal year across the group. Although the three international regions realized a total reduction of JPY 13.5 billion, primarily in the Americas and APAC, Japan registered an increase of JPY 13.8 billion, mainly due to talent expansion and the additional bonus payments in the fourth quarter. Similarly, operating expenses increased by JPY 3.6 billion from the previous fiscal year across the group. This was due to Japan recording an increase of JPY 9.1 billion due to factors such as the rebounding effect of the gains booked on foreign exchange hedge in the fourth quarter last fiscal year, which was partially offset by the decrease of JPY 6.3 billion realized by the three international regions. I would now like to move on to our guidance for fiscal 2026. The organic growth rate is expected to be in the range of 0%-1%. Japan business is expected to remain steady, with positive growth of 2%-3%, while the international business, which has recorded negative growth for consecutive years, is aiming to be broadly flat. In the Americas, despite the expectation of CXM returning to positive growth, organic growth rate is assumed at circa -2% due to factors such as client losses in Creative last year. EMEA and APAC are both expected to achieve organic growth of circa 1%. Meanwhile, operating margin is expected to be in the 13% range, slightly lower than the level from the previous year. This is due to overall costs being higher than last year, driven by internal investments and the impact of inflation. However, some of these increases will be offset by the benefits gained from the initiatives to rebuild the foundation of our international business. On a statutory basis, the group is expected to return to profitability in fiscal 2026, forecasting operating profit of JPY 152.6 billion and net profit of JPY 69.7 billion, despite the continued recording of one-off expenses for rebuilding the business foundation during the fiscal year. Now, please allow me to explain in some detail about the goodwill impairment loss. First, I deeply apologize as management for having continuously recorded impairment losses on goodwill. To reiterate, the fiscal 2025 organic growth rate was slightly higher than our expectation, and the operating margin exceeded expectations. Americas' CXM business, which had triggered the impairment, is gradually indicating signs of recovery, and the medium-term outlook for international business has not deteriorated rapidly. However, we have reviewed the assumption for impairment test, as shown on the lower part of the slide, in consultation with our auditors. As a result, apologies for the figures- apologies that the figures are presented on the next slide, and a goodwill impairment loss of JPY 310.1 billion was recorded in the fourth quarter. Combined with the second quarter, the total impairment loss on goodwill recorded for the full year amounted to JPY 396.1 billion. The group's total goodwill balance now stands at JPY 320.1 billion, representing a decrease of more than half, from circa JPY 700 billion at the end of fiscal 2024. The assumption for this impairment test reflects a revision to the level currently assumed to preclude any additional goodwill impairment losses going forward, and is entirely separate, from the fiscal 2026 guidance explained earlier. For example, in the Americas, the full year 2026 organic growth rate in our guidance is circa -2%, while the impairment test projects -8.2%. This reflects a significantly more challenging view, especially considering that the Americas' organic growth rate in fiscal 2025 was -3%. This severe view is based on four points. First, the impairment test assumption excluded all projects with identified potential order losses and adopted a significantly more conservative order outlook than the normal budget. Second, margins were also conservatively assumed. While the fiscal 2025 actual margin in the Americas was circa 23%, the impairment test assumed circa 17% for fiscal 2026, and excluded any future benefits from the ongoing Rebuilding the Business Foundation initiatives, which are already showing results. Third, unlike the impairment recorded in the fourth quarter of fiscal 2024, we applied an extremely conservative assumption for the first year, which has the greatest impact on the impairment test. Finally, we also lowered the medium- to long-term growth rate for fiscal 2028 and onwards, for the impairment test from circa 3% at the second quarter to, circa 1%. Next is about the dividends. As was the case, in the second quarter, goodwill impairment led to a loss on valuation of shares in subsidiaries and affiliates on a non-consolidated basis, and this caused distributable profit to become negative, by JPY 234.3 billion, which serves as the source of dividends under the Companies Act. For this reason, we regret to announce that we have resolved to pay no year-end dividend for fiscal 2025, and are forecasting to pay no dividend for fiscal 2026. In response to this, we will endeavor to enhance EPS and maximize TSR by focusing on key areas where we are already making progress in achieving results, and by thoroughly executing the initiatives to rebuild the business foundation and to re-evaluate underperforming businesses. Additionally, we will make every effort possible to resume paying dividends in the future, including further acceleration of non-operating asset sales. Furthermore, we have filed a Shelf Registration for the issuance of bond type class shares that do not result in dilution of common stocks, subject to approval of the partial amendment to the Articles of Incorporation at the Ordinary General Meeting of Shareholders in order to secure options in advance for enhancing our financial foundation in preparation for future growth investment. That is all from me. I would like to hand back to Igarashi-san for the strategic update. Thank you, Shigeki. As explained, we have revised the assumption for impairment test at this time to the level where no further impairment losses on goodwill are expected. We deeply regret to announce that no dividend payments will be made for fiscal 2025 nor forecast for 2026. We remain fully committed to enhancing shareholder value by executing the strategies outlined in our midterm management plan improving profitability and working toward the resumption of dividend payments in the future. Now, I'd like to explain our strategic updates. As stated in our midterm management plan, the most urgent challenge for our group in returning to growth is restoring profitability in our underperforming international business. Our basic strategy is to improve, improve profitability by re-evaluating underperforming business and rebuilding our business foundation while restoring our competitiveness through internal investments and a focused business strategy. First, on re-evaluating our underperforming businesses, recognizing that markets with significant invested capital and consecutive net losses were the main causes of deterioration in our group's performance, we accelerated the re-evaluation of these underperforming businesses and executed initiatives. In the last fiscal year, both China and Australia, which had been loss-making since fiscal 2023, returned to profit on an underlying operating profit basis. This turnaround was achieved through rigorous cost efficiency initiatives, including front office optimization and compensation revisions. Although both markets showed negative organic growth for the last fiscal year, China's organic growth turned positive in the third and fourth quarters, contributing to the improvement in profitability. We will continue to review each market based on recent performance and steadily advance towards our goal to achieve no loss-making markets this fiscal year. In addition, for certain underperforming businesses, we have already begun process for downsizing, withdrawal, or divestment. We will make an announcement as soon as possible for this fiscal year and beyond. Next, let me address the rebuilding of the business foundation. In fiscal 2025, we utilized JPY 20 billion as one-off expense and realized cost-saving effect of JPY 14 billion. This includes a portion of the savings generated through workforce reductions involving 2,100 employees as part of the broader headcount reduction plan of 3,400 employees announced last August. In addition, we continued initiatives for standardization and sophistication of operations through business transformation driven by AI and automation. As part of this rebuilding of the business foundation, we have established approximately 750 internal initiatives, more than 80% of which are either already completed or currently in progress. The remaining headcount reductions will be implemented in fiscal 2026, adding JPY 28 billion in additional savings and bringing the total cost savings impact to JPY 42 billion. We expect the one-off expenses for this fiscal year to be JPY 26 billion. Our rebuilding the business foundation initiative also includes organizational restructuring, such as continuing to integrate and reduce group companies. The number of international entities has been reduced by more than half as of January 2026 compared to January 2021, when we operated over 1,000 entities. This initiative will continue through this fiscal year. By integrating and simplifying headquarters functions, we will reduce costs further while progressing towards creating an organization that can deliver value to clients more quickly. Through the rebuilding of our business foundation, we now expect to achieve cost savings of approximately JPY 50 billion in annual operating costs in 2027, as announced in the midterm management plan. The cumulative efforts, including these initiatives of re-evaluating underperforming businesses and rebuilding the business foundation, have delivered results, enabling our international business to return to positive operating cash flow in fiscal 2025. Next, I would like to talk about our business strategy to restore our competitiveness. In the midterm management plan disclosed in February 2025, our group set a policy of achieving global growth by global growth by becoming a growth partner for clients in every market. Building on this approach, our aim is to maximize the value we deliver to clients by sharpening our strategic focus across markets, clients, and capabilities. I will now outline our progress in the United States, which we position as a focus market. As Shigeki explained, we expect negative organic growth for the Americas due to revenue declines in the creative domain. However, we are seeing four clear areas of growth momentum in the United States. First, we are advancing our transformation partner model through strong relationships with global clients. With Adobe, we established a global production and operating model through Dentsu Creative, enabling large-scale marketing support across multiple regions, including North America. And in the second half of last year, the partnership further expanded through Merkle into strategic transformation. Second, we are driving integrated growth with U.S.-rooted local clients through the combined strength of media and CXM. With clients such as Principal Financial Group and iHealth, we are deepening relationships at the C-suite level while delivering unified media and CXM solutions, leading to a broader cross-practice expansion. Third, we are implementing and advancing an AI-powered content supply chain. Our capabilities to enhance creative production and automate content creation, activation, and optimization through AI is being deployed to clients, such as in the hospitality industry. Finally, in CXM, we are strengthening modern CRM using customer data as a core engine, connecting marketing execution with business operations. We are expanding initiatives that drive direct business impact by integrating loyalty and owned media capabilities into a data-driven operating model. We have extensive expertise in the quick service restaurant sector, with recent examples including Dairy Queen and Domino's. These momentums are also supporting the recovery of our CXM business, which accounts for some 35% of the U.S. net revenue. Despite continuing significant negative growth in fiscal 2023, the CXM business is expected to return to growth starting fiscal 2026. We believe this turnaround reflects the new leadership team's strong commitment and their continuous initiatives in improving performance, as demonstrated by the increased win rates, reduced customer churn, and a stronger roster. In terms of capabilities, our CRM domain is driving growth, which among CXM, has a strong affinity with media. We will continue to reinforce this area. In addition, we are seeing stronger client demand for new ways of utilizing AI, such as agentic AI. We expect to generate revenue by combining our strength in commerce, analytics, and data engineering within our CXM business. Regarding our international business, we are continuing to execute a strategy that positions media at the core of our growth. Media is an important business for us as it represents more than half of our net revenue in the international business, and it has delivered positive organic growth for two consecutive years. In fiscal 2025, media registered a steady performance by maintaining positive growth, not only as the international business, but also in each of the regions. Net wins for new media projects also remain positive in both halves of fiscal 2025, and we expect to maintain this momentum into the new fiscal year. Internal investments introduced under the current midterm management plan to strengthen core capabilities are also making a progress with a focus on further advancing our media-centered growth strategy. In fiscal 2025, we invested JPY 8 billion in developing data and technology-driven tools such as Dentsu Connect and in accelerating AI implementation. In fiscal 2026, we are planning to utilize up to JPY 14 billion in investing in the data and technology domain, with the emphasis on strengthening our media business as we did last year. I would now like to share my concluding thoughts. In fiscal 2026, we will continue to realize a steady growth in our Japan business and achieve a turnaround in the U.S. CXM business, so as to further restore our competitiveness and profitability. Given the extremely low likelihood of having to recognize further impairment losses on goodwill, we are confident that statutory profit will return to positive in fiscal 2026. However, considering the current performance and the changes in the business environment, we are withdrawing and will reset into course some of the key financial targets for fiscal 2027 we disclosed in the midterm management plan. Having said that, we are still targeting operating margin of 16% in fiscal 2027, based on the expected continued realization of outcomes from profitability improvement initiatives going forward. We are planning to announce early this fiscal year our strategy for accelerating the transformation we set out in our midterm management plan. In addition, we are still exploring potential partnerships to enhance our competitiveness, and we will make announcements without a delay should any situation arise that require disclosure. Finally, we filed a shelf registration for the issuance of bond-type class shares today in order to secure flexibility options for strengthening our financial foundation in preparation for future growth investments. Finally, as announced today, we have decided to move to a new management structure to further accelerate our transformation. At our group, the Nominating Committee has been carefully reviewing potential candidates for the next CEO based on our succession plan. Among those candidates, Mr. Sano was determined to be most qualified to lead the group going forward during this transitional period, based on his strong track record in improving the performance of the Japan business, as well as the efforts that he has been making in business transformation in and in maximizing corporate value at a global scale. And so I would like to invite Mr. Sano to say a few words. I'm Sano, and nice to meet you all. With this management structure, I will drive active discussions and mutual collaboration among the executive team so as to accelerate the execution of our strategies. I look forward to receiving your support. And we will certainly contribute to enhancing corporate value. Look forward to receiving your support. Thank you. I thank you for your attention. I'll now hand back the microphone to the operator. We will now begin the Q&A session. 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. We are confirming several hands being raised. Please keep your hands raised as we are confirming your names. Thank you for your patience. The first question is Abe-san from Daiwa Securities. Please unmute and introduce yourself. Thank you very much. I am Abe from Daiwa Securities. I have two questions. My first question is regarding the impairment. So the equity ratio is down as a result of that, and as you said, you are filing shelf registration for the issuance of bond-type class shares, and I would like to ask about how you see the equity level. Do you think that you need further capital infusion from outside, or do you... Are you simply preparing for further worsening of the financials? So I would like to ask your outlook regarding that. And then next is the business outlook. So outside of North America, you are forecasting an increase in net revenue. Do you think that this is a conservative figure? How certain are you regarding the growth next fiscal year? Thank you very much, Mr. Abe. Regarding the first question, regarding the shareholder equity ratio from the impact of the impairment and what kind of options we are considering if there is further worsening of the shareholder equity, I would like to invite Endo-san, CFO, to respond. And the second question was that outside of the United... The N- outside of the Americas, each region is expecting an organic growth, and, do you think that this is a conservative figure? I will respond to this question. Thank you. This is Endo. First of all, the consolidated equity is JPY 753 billion after impairment. It is not that we will immediately need equity finance. On the other hand, growth investment and structural reforms will continue. Therefore, in terms of the financing, we will consider every option, including equity finance. And as part of this consideration, in order to strengthen the financial basis for making such an investment without diluting EPS, in order for us to issue bond-type class shares in a more agile manner, we are going to ask for the approval at the AGM for the shelf registration. Second question, I will respond to the question. The increase in net revenue outside of the North America is this a conservative outlook? The response is yes. We have, for each market and for each region, been considering the budget formulation. Of course, we look at both risk and opportunity in detail, and we have incorporated the risks in our calculation for our budget, and we have issued the guidance as a result of that reflection. Therefore, we believe that this is an achievable budget. Thank you. Thank you. Thank you very much, Mr. Abe, for your question. The next question will be from Mr. Maeda from SMBC Nikko Securities. Thank you. This is Maeda from SMBC Nikko Securities. So to begin with, the thinking behind the impairment on this occasion, from our perspective, we want-we feel that it is better to take the impairment as quickly as possible. That is a kind of the position from we have spoken previously but, on this occasion, you have embedded a impairment loss that would lead to two consecutive years of non-dividend payment. But, if you look at the recent performance, one may think that you may not have been required to take the impairment, so I thought that there could be a significant message or a significant, the intent, behind this. So you didn't want to keep any negative legacy under the new management structure, or did you want to kind of, the, draw a line here, to make significant improvement in international business? Was this that, I mean, in order for you to engage in business, the structure, reform, if you had the goodwill still, then, there was potential risk of having to take impairment in future. So did you actually, dealt with that, in advance? I think this was quite a bold recognition of a goodwill impairment on this occasion, so I wanted to understand the intent behind this. That's the first question. And for second question, in regards to the international business, based on your explanation thus far, it seems that you can aim towards recovery on your own, and the success examples from Japan can be implemented for international business that could potentially lead to different results. But the structural reform for the international business and towards the new management structure, what are the views? And if possible, would like to hear a comment from Mr. Sano in this regard as well. Thank you, Mr. Maeda, for your question. First, in regards to our thinking behind the impairment, we should take the impairment as quickly as possible, and what's the situation? On this occasion, it seems that you have recognized quite a significant impairment. Is there a significant message behind this? We will kind of embedded the risk of and the impairment in the future. So what I would like to ask CFO Mr. Endo to respond, and I will follow with my comment after him as well. The second question is regards to the international business. It seems that we can achieve recovery by ourselves, so inclusive of the structural reform. We wanted to hear a comment from Mr. Sano, who will be leading the company going forward. So we'll ask Mr. Sano to respond to the second question. So this is Endo speaking. Thank you, Mr. Maeda, for your question. So in regards to the impairment, please allow me to give some detailed explanation. So, in the fourth quarter of FY 2025, we registered the goodwill impairment of JPY 310.1 billion, and this comprised JPY 230.8 billion in the Americas, and JPY 79.3 billion in EMEA. And last year, in FY 2025, in the second quarter, if we put the two together, we've recognized a JPY 396.1 billion of the impairment loss for the full year. And if we break that down, Americas accounted for JPY 299.7 billion, EMEA JPY 96.4 billion. And as a reference, for the full year 2025, the total goodwill impairment amount was JPY 402.6 billion. And so apart from these that I have described, there were some impairment of intangible assets as well, which make up that number. And so the thinking behind this and our performance for FY 2025, as we have explained, we were able to achieve a positive growth slightly above our expectations, and our margin exceeded our expectations. And to say more, the Americas CXM, which triggered the impairment, is now steadily showing the recovery signs. So it's not the case that we saw a rapid deterioration in the international business, but the assumption for the impairment test, and we've consulted with the accounting auditor, and we have decided to re-advise the assumption. The business assumption for the impairment test was such that no additional impairment loss would be recognized in the future. So we actually lowered the level to such a level. For FY 2026, we have a guidance, but this is completely separate from the impairment issue. From our perspective, and I'm kind of repeating myself, but impairment of goodwill, we don't want to recognize any further the impairment of goodwill in the future, so we revised the numbers to those level. The guidance for FY 2026, which is to achieve profitability, and we have been deeply focused on that. So that was the basis upon which that we recognized the impairment in FY 2025. This is Igara speaking. It's exactly as Mr. Endo has explained, but from our perspective, as the management, we have essentially caused negative surprise to yourselves. And this is something that we regret significantly, the significant impairment loss on the goodwill on this occasion. This came with the thinking that we do not no longer want to cause negative surprise in the future. And so, we took that in mind, and discussed with the accounting auditor, and made assumptions at that level. It's really based on reflecting all of the risk factors. But as Mr. Maeda has indicated, together with the reform of international business going forward, will there be a potential risk in the future? Well, rather than the assuming that for now, we have a reflected all of the risk to the maximum level possible, so that we no longer will have to come up with negative surprise in the future. And we wanted to engage in the reform on that basis, and that is the message I would like for you to take. So I would like to ask Mr. Sano to make comment in regards to the international business. This is Sano speaking. Mr. Maeda, thank you for your question. Yes, as you have indicated, at a certain, the likelihood that we do expect to be able to achieve that growth. Market, as you know, has undergone quite a significant changes. Many changes are taking place due to AI or in international market, we are seeing mergers of mega agencies. So many things are happening right now. So in the era of many changes, as many people say, is also a and opportunity. And from 2025, we've already started to achieve certain results in regards to rebuilding of our business foundation. And as I explained already, we have achieved the outcome, but we need to accelerate that even further. And so for that, revisiting the entities, improve transparency, and to make the management structure more simple, and they will enable a great acceleration. The other is in regards to growth. So as you have indicated, many knowledge that we can utilize from Japan and for each of the markets, not being completely uniform, but the markets have various strength or there are the client structures or the client, the nature. We need to identify how to win in each of the market, and we feel that we can certainly do this. This completes my response. Thank you. Thank you very much. Thank you, Mr. Maeda. Next question is Mr. Kishimoto of Mizuho Securities. This is Kishimoto from Mizuho Securities. Thank you very much for taking my question. I also have two questions. My first question, for FY 2026, I'd like to ask about the pitch size or pitch scale. What is the amount of a pitch that you are seeing for this fiscal year? And how... What is the ratio of offense and defense amongst the pitches? Next is the outlook for the Japan business. I believe that you have a really good pitch win rate. On the other hand, the organic growth rate is only expected to be 2%-3%. Perhaps you are being conservative, or last year there were some special or market factors around TV. Perhaps last year was very strong, and maybe as a rebound, the growth rate in FY 2026 looks softer. Those are my two questions. Thank you very much, Mr. Kishimoto, for your question. FY 2026, I think your first question was more about the international business, the size of the pitches in the FY 2026. So I would like to respond to that question. And regarding your second question regarding Japan business, FY 2026 organic growth rate, 2%-3%, is this conservative or not? Is there any special factor behind that? I believe that this was your second question. So let me respond to your first question. FY 2026 pitch size for media pipeline, JPY 4.2 billion, is the current size. Out of this pipeline, 80% is offensive. So 80% is offense. And this pipeline is what we want to realize, and also we would like to be winning new opportunities as well by approaching customers. And for creative, there are some pitch just that will be happening, but there is a lot of a competitive pressure. Currently, GBP 701 million is the size, and 73% is offense. For CXM, the pipeline is different from the other domains, but the pipeline is actually growing for CXM, and 14% growth year-on-year, about GBP 106 million. CXM, we have been doing very detailed analysis since last year, so the pitch win rate is very good for CXM. On the other hand...... client retention is also very high. So with that considered, we believe that the recovery trend will strengthen. Regarding the second question, I'd like to ask Sano-san to respond. Thank you, Mr. Kishimoto, for your question. To give you the conclusion first, yes, slightly conservative outlook, I would say. One is that 2025, 6.2% growth rate, which is a high growth rate, and so there is some rebound from that. And also, last year there was the World Expo and the World Athletics, and so there were some large-scale events in FY 2025. On the other hand, looking at a very strong share price and... Sorry, the stock market and the new administration from the election, the market environment is not bad at all. There is the WBC FIFA World Cup, the current Olympics, and so, there are many large-scale events, as well as the Asian Games. So we have a good win rate in the internet business, which is a growing business. We are growing ahead of our competitors, so against the guidance, we would like to outperform. Thank you. Thank you for the explanation. Thank you, Mr. Kishimoto, for your question. So the next question is from Mr. Nagao from BofA Securities. Thank you for this opportunity to ask a question. This is Nagao from BofA Securities. My question is in regards to the balance sheet on a non-consolidated basis. So I understand that the retained earnings are negative right now, and so yeah, we have the loss on retained earnings, but you have cash, and you have the reserve capital. So the net asset overall is still positive, but in order to secure a buffer or to enhance your capital, so the capital policy on this occasion is essentially issuing a bond on this occasion. Is that the right understanding? So I wanted to ask and receive explanation about your capital policy going forward. So that's the first question. Please ask your second question as well, Mr. Nagao. Yes, the second question is in regards to the North American business. CXM business apparently has started to improve, and the media business has recorded two consecutive years of positive. And I understand that you want to also add values in a DNP area. So it seems that the forecast is not that pessimistic, well, going forward. When you look at the organic growth for the U.S. going forward, what are some of the concerns? If you could elucidate on that, please. And it's just two questions per person? Yes, you can continue, sir. Sorry. The third question is within the midterm management plan, and you said that the operating margin target of 16% will be maintained. But you did take the impairment loss on the goodwill, but the ability to generate operating cash flow, I feel that that has not been damaged. And so I think the operating cash flow target was JPY 140 billion. So, do you have concerns about your ability to generate cash to that extent? It does relate to the first question to... on the balance sheet, but ability to generate cash flow, I don't feel that that has been damaged. So could you give some comment on that, please? So those are the three questions. Thank you very much, Mr. Nagao, for your question. For the first and the third questions, Mr. Endo will respond to those together. This is a balance sheet regarding the on consolidated basis, and so the retained earnings or the net asset position, it seems that we still have room. So was that to secure a buffer on the capital policy that we are considering the issuance of class shares? So you wanted opinions then about the capital policy and also in regards to ability to generate cash. So Mr. Endo will respond to that together. And the second question in regards to the North American business, it seems that it is starting to show steadiness, if there are any concerns. And for that question, we'll ask Mr. Giulio Malegori to respond. So this is Endo. Thank you very much, Mr. Nagao, for your question. So the balance sheet on a non-consolidated basis. Well, the consolidated, the impairment loss that we have taken on this occasion, the distributable amount, which is a source of our dividend, this ended up being a negative JPY 234.3 billion. And, with that. And, so whether it be the equity ratio or other financial, the indicators are impacted due to the impairment. And so, we won't be able to issue class shares by changing articles of incorporation. But this is more from the perspective of preparing for future growth investment, and we want to also strengthen the financial position to have greater the... As opposed, the, the flexibility, enabled to, engage, in our various initiatives. So that's the first point. And then the third question, is the operating margin, of 16% in the midterm management plan. This has been, maintained. Well, as for cash, are there any concerns or not? I think that was the, the gist of your question. Well, in FY 2025, and, based on the track record, cash flow overseas, this is operating cash flow. This has, been negative for several years, but, this, turned positive, in FY 2025. So in that regard, it's not the case, that, we have, you know, concerns about the cash, and that is our view right now. But over a medium to long-term growth going forward, we need to make investments. And so here, under the new structure, we wanted to revisit the situation. And so, in regards to the financial, the indicator of 16%, we have decided to maintain. Thank you. Hi. So, Giulio, please respond to the question. Thank you. Thank you very much. Thank you, Nagao-san, for the question on the outlook of North America and any concerns specific to that. Well, you know, as you heard, we are looking for organic growth -2% for the full year. Let me elaborate quickly and briefly on each practice, and then we'll comment specifically on the concern. You know, when we look at media, the solid momentum should continue. We anticipate more demand in performance-oriented and data-driven channels, and so we will accelerate our investment in the Media++ strategy, and we also embed AI-enabled workforce with stronger data integration across planning, activation, and analytics. In CXM, I think you already heard about the progress. You know, we intend to further accelerate the content supply chain and modern CRM. So to your specific point on the concern, you know, this is really focused on the creative practice, where we anticipate is an area that will face challenge. As Mr. Endo quoted, we unfortunately seen significant client losses during 2025 and are impacting 2026. There will be also... We're anticipating some client spend reduction that we got in 2025. So we hope to stabilize the business throughout services that combine creative media, production, and social, but we need to factor in the impact of the losses that we got last year. So, that's the outlook is just factor in the impact of last year, but we have a clear plan for going forward. Thank you for your question. Thank you very much. Mr. Nagao, thank you very much for your question. We have passed the planned time, but we do have one more hand remaining, so I would like to ask Mr. Harahata of Nomura Securities. This will be the last question. This is Harahata from Nomura Securities. Sorry for going over time, but thank you very much for taking my question. I also have two questions, if I may. First question is regarding Gen AI and how that will impact the competitive environment for our advertising agencies. For our overseas ad agencies, there seems to be a headwind regarding the share price. How do you plan to differentiate yourselves in the new Gen AI era? And my second question is to the next President Sano. As a member of the new management, among the challenges that were discussed today, which challenge do you think is the most urgent, that you need to address first? So I'd like to ask about your priorities. Also, as the new management member, why do you think that the new management will be better positioned to address, these challenges? What has been strengthened through the change in management? That is my question to Mr. Sano. Thank you very much, Mr. Harahata. Regarding your first question regarding Gen AI and the impact on the competitive environment, how our agencies will be impacted by Gen AI and how Dentsu plans to formulate its strategy against this backdrop. So I would like to address this question. The second question was addressed to Mr. Sano regarding the new management. What will be the priorities, and how the new management structure will allow you to better address those challenges? So, in terms of the first question, indeed, as Mr. Sano also mentioned earlier, our industry, but not just our industry, AI is making waves across the different industries. And we ourselves cannot think about our future business without use of AI either. In terms of rebuilding the business foundation, I mentioned that there are 750 initiatives. And these are not just cost-cut measures, but standardization and automation are major themes. So in order to make the operation more efficient, being less labor-dependent, using AI for a higher efficiency, this is also necessary for building the business foundation. And also, we like to look at the upside for our business opportunities. This year, AI for Growth is a major objective. How by leveraging AI, we can achieve higher growth? This is a group-wide initiative. Data and technology, Dentsu Connect is the center of our data and technology, and so we would like to centralize the AI-related expertise here. There are over 700 clients that have already introduced Dentsu Connect, and also many agencies are investing in this area. But for the clients, rather than being locked into a closed platform of agencies, which many clients are concerned about, we focus on interoperability, which is connected and open to other platforms and the clients themselves, so that AI can be adapted and customized or improved to match the needs of the client. So I believe that the clients will understand this and work with us together to resolve their challenges. And so this is different from other agencies and is unique to Dentsu, and this is something that is now being understood among our clients, and I believe that we can deliver results based on this policy. So, Mr. Sano, please address the second question. Thank you very much for your question, Harahata-san. There is so much that I'd like to say, but I'd like to keep it simple. First is the rebuilding of the business foundation, transparency, simplification, visualization, to look at underperforming business, of to choose whether to exit or shrink or to improve the profitability. We need to execute with speed. That is the most important thing, and as the organization, there is going to be a Chief Transformation Officer, which is the first position to be in Dentsu, and to rebuild the business foundation and re-evaluate the underperforming business. This is the executive management who'll be in charge of that. Second is regarding growth. Our growth is to identify the issues of the client ahead of the client, and to help the client resolve those issues. This is how Japanese business grew, and we have to expand this globally. And as an organization, we need to be more flat, meaning that each head of the region reports directly to me. But also, Jean Lin, practice head, was in between the reporting to the president, but each media, CXM, creative presidents will be reporting directly to me. So we will remove that layer so that we can identify the issues of the client and enhance our competitiveness in a more swift manner. So these two are what we like to prioritize. But there's one more thing I'd like to mention. There's a Chief Brand Officer. So there were some weakening of our brand last year with some speculative articles. So for the customers to understand the brand, the Dentsu brand and our media brand, et cetera, in order to enhance our brand power, Jean Lin will be the Chief Brand Officer, so that is one. Another initiative that I wanted to mention. Thank you very much for your explanation. Thank you very much, Mr. Harahata, and everyone else who has asked questions. With that, we'd like to conclude our earnings call. Thank you for your participation, despite your busy schedule today. Thank you. You may now disconnect. Thank you.