Thank you very much for your patience. From now on, we will begin FY 2025 First Quarter Financial Results Presentation of Nippon Paint Holdings. Before we start, we will ask you for some housekeeping announcements. We will ask you to switch off your mobile phones or put them away to avoid feedback. By the way, we are providing a Japanese and English simultaneous translation for this conference call. Now, over to you, Mr. Wakatsuki, as well as Mr. Tanaka, please go ahead. Thank you. Hello, everyone. I am Yuichiro Wakatsuki, Co-president of Nippon Paint Holdings. Thank you for taking time out of your busy schedule to join us today. I would like to present an overview of the financial results for the first quarter of fiscal year 2025. Before going into my presentation, first and foremost, I would like to state that today we're not revising the guidance we announced in April. In principle, we believe that the regional figures announced in February and April are well achievable. However, we assumed exchange rates of JPY 148 to the $1 and JPY 20.5 to the renminbi as announced in April. While the yen depreciated slightly against these assumptions in the first quarter, it has been extremely volatile since April, so there is a possibility of a deviation from the April guidance if the exchange rate fluctuates significantly. For your reference, the sensitivity to a one-year fluctuation over a full year and a 10-month period for AOC is shown on the right side of page two. Next, page three is a summary of the first quarter of 2025. As you can see, revenue and operating profit increased 5.6% and 24.7% respectively to JPY 405.7 billion and JPY 51.4 billion. Revenue is the highest ever for Q1, and operating profit is a record high for any quarter. New consolidation includes three months of India and one month of AOC, and margin is also up due to AOC's contribution. There are two things I'd like to draw your attention to here. First, as I mentioned in February, we've changed the agent model for the trading business in China. Under comparable conditions against 2024, revenue would increase by 7.6% instead of 5.6% on a tension basis, and on a non-GAAP basis, revenue would increase by 1.6% instead of - 0.3% under comparable conditions. Secondly, AOC. AOC's OP margin is 35.6% in Q1, but this figure is before PPA, which means before amortization of intangibles and the one-time inventory step-up. PPA is projected to be completed in the second half of the year, in which case the amortization expenses will be recorded retroactively in that quarter, and we expect a normalized margin level from the following quarter. Acquisition-related expenses amounted to approximately JPY 1.1 billion as of Q1, which is an adjustment item in holdings. On a non-GAAP basis, excluding foreign exchange and new consolidations, revenue increased 1.6%, and operating profit grew 7% when compared under the same conditions in China trading. NIPSEA China's decorative business posted a 5% increase for TUC and 10% decrease for TUB. NIPSEA China as a whole posted a 3.8% increase in revenue and 13% increase in operating profit. Regarding the impact of the tariffs, since our group basically has local production for local consumption, we import and export very limited products to the U.S., and most of our raw materials are procured within the region. Therefore, the short-term direct impact is expected to be minor. However, of course, we need to keep a close eye on the trends of raw material manufacturers and the production trends of industrial customers, including automobiles. In the medium to long term, as I always say, demand for decorative paints in particular is linked to GDP. While paint consumption can be affected by economic sentiments, we believe at this moment it is generally within manageable limits. As I mentioned at the beginning, we are not an exporting business, so we have few problems with forex fluctuations on a local currency basis, which could be affected by U.S. tariffs. There may be fluctuations due to conversion to yen-based financial results. Page four. Although there are variations in raw material trends by region, we do not expect major fluctuations in general. In China, market prices have remained somewhat high, but our RMCC ratio is actually improving. Page five. This is Hitchmap. I'd like to skip page five, and page six is a summary of operating results in major segments. We will discuss details during the Q&A session, but let me discuss each segment briefly. First, on Japan segment. Automotive products and revenue increased double digits due to a rebound in automotive production from last year, and revenue increased 4% due to the expansion of sales of new decorative products and price adjustments in industrial business. Profit also increased due to higher revenue and product mix improvement, as well as various cost reduction measures. On NIPSEA China, macroeconomy continued to be challenging, but TUC volume increased across all regions, so it was favorable. Automotive product sales increased as well due to the increase of auto production volume, and we were able to expand sales to Chinese OEMs. Overall, pricing, product mix, and RMCC ratio improved, and even excluding the impact of trading revenue booking, there was some margin improvement, and as I had stated before, we achieved a profitable growth. Next, NIPSEA, except China, has some variations apart from Turkey, but it was favorable, including Indonesia. As for Turkey, because of the reaction from the campaign of Q4 of last year and due to inflation, interest rates had been raised, as I had said before, this worsened the market situation. On a non-GAAP basis, there was a negative growth, but due to the reduction of RMCC ratio, even after the application of IAS 29, double-digit operation margin was achieved, so we, in a way, secured good profit rather than having anxieties or concerns. Now, DGL Pacific, amid the flat market condition, perhaps somewhat weakish, saw sales increase due to price adjustments and mix improvement, and SG&A was reduced, resulting in the improvement of operating margin. Profit increased 14% on a non-GAAP basis. On the other hand, Europe continued to see the French market being a soft market, negative growth of almost 5%, and profit dropped, but the Q1 is a slow quarter, just like the Q4, so we have hopes for the second quarter and onwards. In Americas, despite the challenging market condition, we were able to increase the share slightly, and it was almost flat. As for the decoratives, the weather was poor in March, but revenue increased due to the price adjustments and expansion of stores in Northern California. Finally, AOC, which had contributed only one month, and since PPA had not been finalized, it is not reflected. As I stated earlier, looking at the market condition, expected interest rate cuts did not materialize in the U.S., and the demand was slightly down, but extremely high margin was maintained, and outlook of sufficient profit contribution is unchanged. Also, we see potential of synergies, mainly in the area of procurement for both AOC and Nippon Paint Group, and progress has been good to reap low-hanging fruits. Page seven, there are two major topics. The first topic has already been announced, but we received a Grand Prize in the NIKKEI Integrated Report Award, higher ranking award than the Grand Prize G Award we had received last year. If you read the integrated report, you will see that the management, ourselves and outside directors, are working with each other to convey our story. Please have a look at this by all means. MSV is a very simple and powerful mission. As we publish the integrated report every year, the novelty may wear off at some point, but we would like to make improvements and strengthen our engagement with all of you shareholders. Therefore, your feedback will be highly appreciated. Another key topic is the appointment of a new outside director at the merger AGM. Andrew Larke has been an outside director of DGL from the times when it was listed, and even after the acquisition, he has been responsible for the governance of DGL together with myself, Wee Siew Kim, and Goh Hup Jin. He strongly relates to the mission of MSV, and he kindly agreed to be a director of the holding company as well. Six out of nine directors continue to be outside directors, and four out of nine are non-Japanese. With this diverse composition, we will make efforts to protect minority shareholders and realize MSV. That's all for my presentation. I look forward to your questions. Thank you for your kind attention. Now, we would like to move on to a Q&A session. If you have a question, please push star one on your device. If you would like to cancel your question, please push star two. The operator is going to call out your name when we're ready to take your question. If you have a question, please push star one on your device. Now, thank you for your patience until we introduce the first person. Now, let us take questions from the Japanese channel. The first question is from BofA Securities, Enomoto-san. Please go ahead. Thank you. This is Enomoto from BofA Securities. Enomoto-san, hello, this is Wakatsuki. Hello. I have a question regarding China. There are two, actually. TUC is up by 5%. Q1 last year was + 15%. If you compare the two, 5% is maybe satisfactory, but I'd like you to give us some more color on the current situation. The RMCC ratio is improving according to your explanation. How much have you decreased your pricing? Has it been none, or has it been putting importance on market share? Thank you. Thank you for your questions. To your first question, last year we grew by 15%. That was pretty strong. This year we were able to grow by 5% from tier zero to tier three in six cities. We've been able to grow in volume, and this is a very encouraging result for us. The entire market situation is now very strong. Given such situation, I believe this result is satisfactory. Related to your second question regarding pricing, we have been very careful in deciding our pricing policy. The RMCC ratio has decreased. However, we are not going after market share by simply reducing prices, but rather we would like to grow in areas where we do not have to give discounts. Pricing, RMCC ratio, decreased pricing mix, these factors are making positive contributions so far. We used to grow in volume, but negative in pricing mix. Now volume and pricing are both grown. As I have been saying repetitively, we are not blindedly going after market share or margin. We are going after both, and we are trying to strike the best balance. I have been saying that we pursue growth with margin. We cannot sacrifice margin just for the sake of volume growth. That has been pursued locally. That's it. I have a follow-up question. What about the competitive environment? Has it been easier? Has there been any changes in the market situation? We continue to have a very moderate market condition. It is now very strong. 25% is the total market share and a high single digit for the second and the third players. We are not the dominant player, but we are at a high position, and we have yet to secure a higher market share. With local players and Western players, we are not necessarily having very intensive competition. We do see some growth among local players. Last year, some analysts were saying that they are growing share by 20%, 30%, or 40%, but that is not the case. To be honest, the market environment is not necessarily favorable, but repainting demand continues to be steady. We try to continue to leverage our brand strength, and we believe we have been able to grow market share to a satisfactory extent. I don't want to say that we have an easy competitive landscape. It is tough. In the local market, they have been very vigilant about the situation, but if you look at the results, we have been able to leverage our strength. Thank you. That was clear. Thank you. Next question is by SMBC Nikko Securities, Shintani-san, over to you. Thank you very much. This is Shintani of SMBC Nikko Securities. Shintani-san, hello. This is Wakatsuki speaking. I have a question about AOC. January through March, it is just one month, and the progress has been good. Wakatsuki-san, what is your impression? Also, last year, compared with the initial plan, EBITDA, I believe that a stronger result is continuing. I think that the trend is still maintained. Is that the case? Also, what is the demand situation of the market? Also, about the outlook or prospects, flat or 5% reduction in sales against last year is what you're envisaging. At this point in time, what is the current progress, and what will be the future trends? Is this high margin only temporary? You asked many questions. First, on AOC, I'd like to give some general comment. Back in April, we shared our outlook, and things have not changed much since that time because, in principle, they have local production, local consumption. There are some Canadian factory operations as well, but overall, export, import, they are not dependent on such export or import. The outlook of this, because of the tariff situation, is not affected to a great deal. Having said that, interest rate hikes were mentioned, but if there are interest rate cuts, then it will invoke a demand. It is very positive, but as you know, in the U.S., interest rate cuts are not exactly happening. Inflation numbers and so on can be interpreted in various ways, but more than the expectation, I believe that the progress has been somewhat slow. Against this backdrop, the demand itself is somewhat weak. 0% to 5% without losing share, proportionate proportion because the recovery has been delayed. Outlook is the same in regards to the margin as well. In October last year, as I have been saying, this kind of business systems, based upon that with a high level of granularity, there are areas where we can get margin, where we cannot get margin, and we have all sorts of scenarios. In the first quarter as well, it's not that things change. All of a sudden, 35% before PPA, as I mentioned earlier, this is a level, as I mentioned before. In some cases, there could be some room for improvement, as I stated before, but the economy is not very favorable. Are we going to see a major progress here? I'm not overly optimistic about this, and that's not what I have been saying. The flip side of that is that some of you are concerned about this situation. Perhaps this too good margin is not sustainable. People are saying these unfounded things. We just have to deliver actual results. At this point in time, our future outlook is that we should be able to maintain this level of margin. Thank you. Thank you. Thank you very much. I have a follow-up question, please. This year, as you said earlier, interest rate cuts are not really happening. Demand situation is not very positive. The market is quite tough. In the paint business, for example, you've been expanding shares, making efforts, and when the market recovers, you can enjoy bigger fruits. For AOC as well, with existing customers, are you trying to increase presence, explore new customers, or improving profitability in Europe with your own efforts? Are you making any preparations for the future? Do you have any strategy that you are implementing or executing? As I said back in October, it's not that we are happy or satisfied with the current margin level as is. One point is that, as you mentioned towards the end of your remark, in Europe, market share is not particularly high. Also, among competition, we have some imported decorative products and so on. We are trying to stay away from decorative products. We are trying to have more customized products. As a result, we are trying to realize higher value added for our customers. That is our thinking. In the U.S., the share is high, and going forward, there could be a margin recovery because of the operating leverage. In the case of Europe, we can have more customized products to push up the margin with a new business model. This is something we can expect for the future. Perhaps expecting is too much to say, but even without that, the margin level is quite high. Do we not have any upsides? That's not the case. I've listed some examples. By when, what is the percentage point we should achieve? That is not something this is the same as China. Margin itself is not the ultimate end or goal. We have to achieve growth with margin. How should we achieve this is the question. Sometimes we may pursue volume, and at the same time, there are some unprofitable parts of the business, and we may pass such a business on to other companies. With limited resources, we would like to leverage them to the fullest by taking various measures. Local teams are thinking of such a strategy. Also, when the recovery indeed happens, we should be able to benefit from such a recovery. The important point is that even with a poor market condition, even if the market condition is mediocre, our business results are somewhat good. I believe that is the attractiveness of our business. We are making investment in areas other than paint as well. Our fundamental strength of our business is something that we have identified to deliver results. Of course, we will keep making our most efforts to descend. Thank you. Thank you very much. That was very clear. Thank you for the detailed response. Thank you. The next question is from Citigroup Securities, Nishiyama-san. Please go ahead. This is Nishiyama from Citigroup Securities. Nishiyama-san, hello. Thank you. Thank you. About NIPSEA, except China, I'd like to ask some questions. You showed us the full year guidance at the beginning of the year, and compared to that, the level of margin is maintained at a relatively high level, even in a difficult business situation. It is not the case for revenue growth. How has the progress been? Do you think this high margin level is sustainable? Thank you, Nishiyama-san. First of all, this is just first quarter, so it is too early for us to panic, especially in the segment NIPSEA, except China, Betek Boya accounts for a larger proportion than before. As I mentioned earlier, in the beginning of the year, we were assuming 5%-10% growth, and first quarter is seemingly down from that level. It is coming from the interest rate and the market environment. We must admit that we are facing difficulties, and we need to pay close attention. Other than that, including Indonesia, we have around 5% in Indonesia. This is reasonable. To be more specific, Thai automobile, is it going to be steady? It may be impacted by the tariff situation. In other areas, in the decorative area, we believe we do have a stable outlook. In terms of profit margin, regarding Turkey, for this fiscal year, we were assuming a lower margin on a year-on-year basis. I'm looking at February numbers. 17.2% was the number last year, so we are slightly below that. Considering that this is an impact only in Turkey, we believe we do not have to be deeply concerned. We have nine months left. Of course, we cannot be optimistic. Some things are unforeseeable. Political instability may exist in places like Indonesia, for example, but I believe our business has resilience to such situations. I think it is too optimistic to say that every part of the business is steady. At the same time, I honestly do not think that we have to be pessimistic as of today. I apologize for asking this question just by looking at the Q1 numbers. I understand that there will be fluctuations, but against the annual plan, you believe it is achievable. Is my understanding correct? Yes. That is what I explained at the beginning. Again, conversion into yen-based financial results, that is not controllable. On a local currency basis, in February, we guided based on the local currency basis. I believe we are within the manageable limits. Nishiyama-san, did you get my response? I am sorry. I think I was disconnected. Thank you. Did I answer your questions? Let's go to the next. The next question is by Yoshida-san of Mizuho Securities. Over to you, Yoshida-san. Yoshida of Mizuho Securities, thank you very much. Yoshida-san, hi. On Japan, I have a question. The OP during the first quarter, OP margin was 9.1%. Last year was 8%. There has been a significant increase. At the beginning of the year, in regards to the profitability throughout the year, 9.6%, which is about the same level as last year. That is your outlook. Looking at the Q1 results only, maybe my comment is not justified or wrong. Overall, last year's margin will be surpassed, it seems. Is this the case? In the first quarter, against last year, what is the reason why margin has increased? Could you please share the background to this? Nishiyama-san asked a similar question. I'm not saying that you shouldn't just look at the Q1 results and ask questions. That's not the case. By just looking at the Q1 results, it is difficult for us to have an outlook for the full year. That is the reason behind my comment. Of course, your job is to make analysis by looking at each quarterly results. I'm not criticizing or anything. I apologize that I didn't fully explain myself earlier. On that basis, the Japanese segment, as I have stated before, our original potential, it is not 10%. It can be higher than 10%. We can aim higher. We have such aspirations. As I have stated earlier, the separation has benefited us, and also there have been some disadvantages as well. For example, overlapped businesses and so on can be sorted out more, and we can reallocate the resources. It is still possible. As such, 8% or 9%+ has been achieved, and are we too happy? No, that's not the case. We still have room for growth. We are continuing our effort here. If I try to respond to your question, with this result, last year's 9%+ margin, is it certain that we are going to surpass this? Nothing is certain. Having said that, of course, double digits is what we will be trying to achieve. This is only natural. Against this backdrop, there could be some more room for improvement. We are seeking that. Also, going back to the original point, the first quarter results, we saw some volume recovery. That is because in the previous years, Q1, there were some abnormal numbers in the automotive. That background has to be noted. Going forward, there could be a tariff impact on Japanese vehicle manufacturers. What will be the impact on Japan's automotive manufacturers? We cannot have certainties around that. On a full year basis, our plan is, of course, we want to achieve it. In regards to decoratives, the product mix, there is a new product called Ganzera or Tanjiola. These are new products, and these are highly value-added products or premium products, if you like. Expanding the sales of these products will, in terms of the margin mix, be positive. Last year, we did some price hikes as well. In that sense, this kind of situation is not temporary. This is set to continue. Of course, there are some assumptions that we are working with. On our side, in Japan as well, it is quite possible for us to achieve the guidance. Thank you. Thank you very much for your response. For automotives, at the moment, is there any change happening? At this point in time, do we see any changes to the production plans? That is not the case. When it comes to this kind of topic, it is really about the tariff negotiations between Japan and the United States. I cannot say anything too casually. At this point in time, it is not the case that we have seen some major changes to the plans for production. Thank you very much. That is all for me. Thank you. The next question is from CLSA Securities, Cho -san, please go ahead. This is Cho from CLSA Securities. Cho -san, hello. Thank you. Hello. I have a question regarding the status of the AOC. This is just for clarification. It is consolidated for three months only. In North America, there is a spring demand. Has that been confirmed in March? Has there been any last-minute demand regarding the tariffs? If possible, can you please give us some color on the recent situation? When you say spring demand, are you talking about seasonality-related demand? In the construction business in North America, starting from around March, it is generally said that demand starts to pick up for decorative business. If you do not have any of that kind, that is fine as well. In AOC, I think it is on page 22, information regarding seasonality. Including March, Q1 is not a very strong demand season. Of course, it is difficult to generalize. In March, we did not see any specific seasonal demand or last-minute demand before tariffs. On a monthly basis, the margin trajectory has been tracked. As I said earlier, that is with a high level of granularity. From the second half of last year, including the times when they were not within our group, we have not seen any spikes or steep declines. It rarely happens in AOC. I do not think you need to take those into account. Last-minute demand related to tariffs, that is not something we have seen either. As you said, it is just for one month. We are not intending to say that we do not have any problems because it has only been a month. The past month has been in line with what we have been saying. Thank you. That's it. Thank you very much. The next question is by Goldman Sachs, Ikeda-san. Please go ahead. Thank you very much, Ikeda of Goldman Sachs. Thank you. Ikeda-san, hello. As a company's financial result briefing, I was attending, so I only joined halfway through. NIPSEA China’s margin improvement, trading business model was changed and so on. Absolute amount of profit expanded to a great deal. Could you please talk about the background to this, especially in China? There is some very strong demand for paint. Also, TUC 8%, TUB 9% growth has been observed by your competition. They are turning a profit or positive result for the first time in a while. TUB, TUC price hikes have been made by yourselves as well. I believe the price hikes are not fully reflected. Raw material cost is somewhat stabilized. The demand has been restored. Price adjustments have been implemented. I believe profitability or margin has been picking up. Could you please give us some background to this, please? Yes, Ikeda-san, what you just said was a very good summary, actually. The market situation is not extremely positive. March is a month for TUC. For one month, a single month, it is a sizable month, I would say. As I said at the outset, across all the regions, it's not like volume is also growing. Price mix as well, there has been some improvement. Price adjustments have been made, and we did not cut prices either. Against this backdrop, raw material cost has come down to some extent. The market condition has not dropped. Raw material cost has come down. This is impacting us. As I have said earlier, if I could repeat myself, it's not that we are just seeking a margin or share. We are not focusing on one of them. In this context, we are trying to achieve growth with margin as a result of a balanced approach. Both revenue and margin expanded, and also the actual amount of profit went up. In regards to TUB, this is tough. TUB, as I have said earlier, we are being very selective. Unprofitable businesses, if we want to continue them, we have to have a very good justification. We are being very selective. Against this backdrop, this 10% negative, there is some seasonality as well. Turning a positive result could be difficult. The TUC is rising. TUC, TUB mix, TUC growing is going to have a positive impact on us. The market condition, is it extremely favorable? That's not the case. The demand is somewhat solid. It's not like we are extremely pleased about the favorable market condition. We have to stay cautious. Comparatively speaking, rather than decorative, the replacement is better because of the stocks related to economy. From April, because of the U.S.-China situation, the consumption sentiments have soured. Currently, crude oil has come down to a great deal. I believe that derivatives price will come down going forward. What are the future trends that you are foreseeing looking at the Q1 and Q2 results? I believe it's better for you to wait to see the results of the Q2. The consumer sentiment since Liberation Day of April have not gone up. I think it's down. Because of the agreement this time around, how will the consumer sentiment come back? That's the question. I believe it is a little premature to discuss the overall direction because we don't have sufficient data. It is not a positive. As you rightly pointed out, the economy is not too good. If that's the case, raw material tends to come down, which is benefiting. At the same time, there could be some other benefits as well. Also, exports to the United States is not very high from China. Because of that, domestic demand has to be captured because China is a domestic consumption-oriented country. Stimulus package, fiscal measures are not exactly in the background. Because of the tariff impact, there could be a negative impact on the consumer sentiment. There could be measures to invoke domestic demand. I believe that they will be offsetting with one another. Because of that, we shouldn't be swayed too much about this. I think we have to make an overall effort on a full year basis. That's my honest impression. Thank you very much. Also, Ikeda-san, another point that I wanted to mention was that 8% or 9%, I believe that Sankashu is what you wanted to refer to. A somewhat different situation is happening. I don't have hard data to back this up. It's not that we are behind a shoe. That's not the case at all. That is one point I wanted to stress because we grew 5%. This is not exactly an apple-to-apple comparison. I believe that we have to acquire some more; you have to look at more data in the industry or market. Against this backdrop, I believe that they have grown somewhat. Their growth is only one digit. Our level is very high, especially compared with the third and fourth quarters that we have been able to see some good recovery. I believe that is our strength. Thank you. Thank you very much for that detailed response. That is all. Thank you. Next question is from Nomura Securities, Okazaki-san. Please go ahead. This is Okazaki from Nomura Securities. Hello. Hello. I have a somewhat similar question based on quarterly results, I'm afraid. I would like to make some clarifications about the situation in China. The TUC market, comparing the December quarter and the March quarter, the sentiment has somewhat improved, not due to your self-help efforts, but due to the overall development of the market, if my understanding is correct. Repainting. Demand is improving because of some stimulant measures for domestic demand. Okazaki-san, I am not sure if what we are doing is correct. Our interpretation locally is that the market is not necessarily improving, but it is flat. On the heat map, it is normally in the green color showing flat performance. The market is not necessarily improving, but 0%-5% is the range. We have 5% with flat market share. The market share virtually may be improving, but it is not good enough for us to put an arrow that shows improvement. When we look at the general economic situation, it could have declined because we have a negative demand trend for new constructions. This repainting area market is not showing any sexy growth. We have been seeing a steady development for the past couple of quarters. That is our impression. Maybe I'm not giving you a response that you were looking for. It is not that the government is stimulating internal domestic demand, and the demand is improving dramatically. No, I was not expecting for you to say that the demand is improving dramatically. Do you have an impression that it is slightly improving, or is it truly flat? When we look at figures internally, I'm looking at the data right now. The market is showing a slight improvement, but maybe one point. It is very slight. I wonder if we can call this an improvement. Is it difficult for you to state any hypothesis because you do not know if it is truly improving? Our share is 25-26%. The second and the third players have high single-digit market shares. The three of us together would account for just over 40%. It is not that there is not any market. There are walls to paint every year. It is just a matter of how to capture those opportunities. In tier three to six cities, triggered by an improvement in the economy, we could see shift from more economy products to something like LiBang. That is the story. It is not a matter of the pie. If I were to restate my question, in the December quarter, I think volume was negative in tier zero and one cities. This time, you have a positive revenue trend. It seems to me like a big change, maybe partly due to what you achieved previous year. That was behind my question. From my viewpoint, I do not think this is a big change. That is fine. If we only have a business in China, my answer will be different. That was clear. Thank you. Thank you very much. Next, there is a question from the English channel. If you have a question, please use star one. If you want to cancel your question, please press star two. Since we have no questions from the English channel, we would like to go back to the Japanese channel once again. If you have a question, please press star one. If you want to cancel your question, star two, please. CLSA, Cho-san, go ahead. This is my second time to ask a question. CLSA, Cho once again. This is about the overall company. $60 is the crude price today. Towards the second half of the year, the current guidance says that raw material cost is reflected. Towards the second half of the year, there will be a benefit from lower raw material price. Is there anything you can explain about this? Thank you very much. Earlier, I said that if we just look at China because of the business sentiment, not all the ingredients or raw materials come from crude oil. Our current assumption is that it will be somewhat stable. Will it drop even more? If this is the case, then in the short term, of course, there will be a benefit for us. Having said that, the background is that the business sentiment is worsening. As a result of that, we may have to cut prices. If that's the case, in the long term, can we receive extra margin on a continuous basis? Apart from some regions, this is not very realistic. This is not very likely. There could be an upside for sure. At the same time, can we really assume that this will materialize? Because there will be downside risks as well, given the uncertain business sentiment. Downside could materialize as well. Looking at the overall situation, we should not change that at this point in time. As I have said, after the second quarter is over, and then when we only have six months left, and also when the third quarter is over, and when there is only one quarter remaining, I believe we can sharpen our focus. We will have some more clarity then. My short answer is that there could be an upside. At the same time, we cannot count on that too much. We are not overly optimistic. Thank you very much. Thank you very much. In general, China tends to be fast. In about three months, they can benefit already. On the other hand, advanced countries tend to take six to nine months to benefit. It depends on the region. There is a variation. Depending on the customer, it is different. Industry customers, B2B customers tend to take longer. AOC and others tend to be much faster. It is quicker. It is not possible for us to generalize the situation. Thank you. Thank you very much. The next question is from SMBC Nikko Securities, Shintani-san. Please go ahead. This is my second round. This is Shintani from SMBC Nikko. I have a question regarding DuluxGroup. DuluxGroup Europe, you have a difficult business environment, and there is an organic revenue decline. From the June quarter, your peers are projecting an improvement, and the basis is going to be lower. Can you please talk about the possibility of starting to improve your revenue? For DGL Pacific, you worked on brand revamp last year. Can you please talk about your progress so far? Yes. Thank you. As I said earlier, Q1 and Q4 are cold times, and we tend to have lower demand. Throughout the year, Q2 and Q3 have higher demand. I believe there is going to be an improving trend. On a year-on-year basis, if you ask if it's going to improve, for example, in France, we are hoping for flat results. We did have a significant decline. We were thinking we don't want to see any further decline, even though we did in the first quarter. That means at the same time, there should be accumulated demand to happen going forward. In the longer term, we believe that there is going to be a timing when we start to see improvement. We are not thinking that's going to happen in the June quarter. If the market recovers, we do have a good market share. We would be able to recover in volume to a certain extent. Internally, we have been working on various projects for profitability improvement. As a basic assumption, we need market recovery to happen. I don't want to say we are dependent on market recovery, but we want to make sure that we can return to profitability. We need to keep a close eye on the situation. In Pacific, we are not concerned at all. The market is almost flat, as I said earlier. It has always been flat. We have been able to increase pricing in a sound manner. You talked about how we revamped our brand last year. We have been promoting more premium products, which will help us improve our profitability. Probably, we would have the least uncertainty for delivery in DuluxGroup Pacific. It has always been that way. Thank you. Thank you very much. Thank you very much. Next question is by Nomura Securities, Okazaki-san. Over to you. Thank you very much. My second time to ask questions. In the first half of the discussion, I wasn't here. As you can see on the right-hand side on page four, depending on the supply year, you need to strengthen prices. What do you mean? Specifically, what are the products and regions? It says that it is domestic. Could you give me some more color here? This is a very general comment. Overall, from last year, there has been an inflation trend. The suppliers are demanding price hikes. On our side, we like to control and minimize them as much as possible. Partly, alternative products may not be available. We may not have alternative suppliers. In such cases, we have to accept the price hikes from the suppliers. In case of Japan, some commodity products are not supplied by some suppliers anymore, which is a problem for us. We are negotiating with them. It's not something that started now or recently. As I said earlier, overall, the raw material cost, including the crude, have somewhat stabilized. Looking at the situation with more granularity, if you look closely, there are some more nuances and color here. It does not really lead to any general insight. It is just an explanation of some realities that are happening. Overall, crude and plastic resin have come down, and it is impacting you. That is the majority of the impact. Also, the economy is not so good in the supply-demand situation. It was clear. Currently, raw material is not going up. Overall, I believe it will be flat, or it may even come down, as was discussed with Cho -san earlier. There could be an upside in terms of material cost. That is our current assessment. That's very clear. Thank you very much. Now, it is time to close the Q&A session. Wakatsuki-san, can we have your closing remarks? Yes. Thank you for joining us once again. Q1 showed very strong financial results. Basically, we do see a lot of uncertainties in the world. Given such circumstances, we have a very resilient business and profitability structure. In terms of raw materials, there are many developments. If it goes up, we may increase our pricing. If it goes down, we will not have to give discounts to be profitable. Through the pandemic, I think we have improved our resilience. By adding AOC, I believe we even have a stronger structure. This year, we are committed to delivery. I hope you will look forward to our Q2 results as well. Thank you. With this, we would like to conclude the earnings call for the first quarter of fiscal year ending in December 2025.