I would like to present the Q3 2023 result. To begin, please see page three. First, here's the summary of Q3 2023 financial results. In real terms, excluding the impact of foreign exchange and divestitures, net sales increased 5% year-on-year on the third quarter year to date, and turned negative 2% in the three months from July to September. Local sales in Japan continue to recover steadily in the mid-to-high-end price range, mainly due to the strengthening of new product development. Sales in the Americas and Europe also remain strong, especially for global brands. On the other hand, in travel retail, Korea, and Hainan Island, inventory adjustments in the distribution channel due to tightening regulations continued, resulting in low shipment levels. In addition, after the release of treated water in late August, consumers were reluctant to buy Japanese products, which affected China travel retail and Japan inbound. The e-commerce ratio was 32%, and e-commerce sales turned negative in the third quarter due to the suspension of live streaming in China after the release of the treated water. Core operating income was JPY 36.8 billion. Although profit declined in the third quarter due to a marginal decrease in profit resulting from lower sales, a large increase in profit in the first half led to JPY 0.6 billion increase in the cumulative profit. In addition, the decision was made to integrate two plants in Osaka, an impairment loss of JPY 6 billion associated with this decision was recorded in the third quarter. We also issued a revised earnings forecast released today. In particular, we have revised our forecast in light of the impact of refraining from buying Japanese products after the release of treated water in China and travel retail. I will explain the details at the end of my part. In the third quarter, next, page four is a PL summary. Core operating income increased JPY 0.6 billion year-on-year to JPY 36.8 billion. Operating income was JPY 25.8 billion, a decrease of JPY 9.8 billion. In addition to non-recurring items related to transfer of the Kuki plant in the first half, an impairment loss associated with the decision to integrate the two Osaka plants and a gain on sales on a fixed asset, such as offices, were recorded in the third quarter. Profit attributable to owners of the parent declined JPY 8.5 billion year-on-year to JPY 20.6 billion. EBITDA increased to JPY 0.6 billion year-on-year to JPY 75.1 billion, with an EBITDA margin of 10.4%. Next, page five are the results by brand. The slowdown in China and travel retail in the third quarter impacted the overall performance, but we saw the significant increase in sales. Clé de Peau Beauté, NARS, Drunk Elephant, and the fragrance brand, Narciso Rodriguez, grew strongly and contributed to overall performance. Clé de Peau Beauté maintained a high cumulative growth rate, mainly in Japan, China, and Europe, thanks to strong growth in the first half. The growth was driven by success of measures to strengthen the brand, such as innovative new products and efficacy claims, as well as the strong performance of the prestige market. NARS continued to perform well thanks to the addition of new products this year, in addition to Light Reflecting Foundation, which has continued to perform well since its launch last year. Drunk Elephant also continued its strong growth momentum. On the other hand, the Asian brand, ELIXIR, posted negative growth due to the impact of treated water in China and travel retail, while negative growth in the travel retail offsetting the growth of ANESSA in Japan. IPSA, which continues to be negatively impacted in China and travel retail, and we are working to nurture new hero products. Fragrances continue to perform well, especially the new All of Me product from Narciso Rodriguez, which drove growth. Next, page six are our sales trends. In the third quarter, overall global sales were down 2% in real terms year-over-year due to lower sales in China and travel retail. After the first release of treated water in late August, China and travel retail were impacted by a reluctance to buy Japanese products. In addition, travel retailers continued to adjust distribution inventories due to tightening regulations in Hainan Island and South Korea. Next, page seven is our Japan business. The market is definitely improving. First, in the local market, the structure continues to be driven overall by growth in the low price segment. The mid-price segment was flat year-over-year through the second quarter, but slightly improved in the third quarter and it is on a recovery track. Under these circumstances, we will continue to concentrate marketing investment in our core brands in the mid to high-end price ranges, which is our focus area, to steadily expand the number of loyal customers, significantly increasing the market share in the third quarter. Local customer purchase are growing steadily every quarter, and we saw the high single-digit growth in cumulative Q3. By brand, Shiseido and Clé de Peau Beauté continued to double-digit growth in the low 10% and mid 10%, respectively, significantly outperforming the market growth. The effect of strengthening product appeal through innovation and the timely launch of the new products in response to the recovery and demand also contributed to these results. Despite the hurdles posed by last year's renewal of its lotion, Legendary Enmei, ELIXIR achieved a strong growth in the third quarter in the low 10% range and expanded its market share. In addition, ANESSA captured the expansion of opportunities to go out and is firmly expanding its share in the sun care market, which is shifting toward lower priced products. Inbound growth was in the upper 20% range with high growth in July and August, but slowed in the second half of August after release of the treated water, especially in September, resulting in results significantly lower than our initial expectations. In the fourth quarter, we continue to see strong new products offerings, which will accelerate local sales growth. Next, page eight. I will explain our China business. In the third quarter, the market grew only slightly and slowed down partially due to the release of the treated water. Our customer purchases slowed down significantly to minus low teen in the third quarter, and year-to-date, our growth was in the low single-digit. Following the release of the treated water, we carved overall marketing activities and managed costs such as suspending live streaming by KOL and canceling promotions of new products. E-commerce sales, especially in the third quarter, were down in the high 20% range, which was significantly lower than last year. Under these circumstances, brand SHISEIDO struggled to post a sales decline of low 20%, even with the launch of the new Idol Mint. The high prestige Clé de Peau Beauté grew in low teens, and NARS also performed well, posting low single-digit sales growth. Slide nine. The market continued to adjust distribution inventories in response to tightening regulations as well as consumer pullback on buying Japanese products after the release of treated water. The company's third quarter customer purchases were minus low teen globally and minus high teen in Asia, excluding Japan. The chart on the right shows a year-over-year comparison for Hainan Island and South Korea respectively, using the solid line for customer purchases and the dotted line for external sales. As you see from the difference between the solid line and dotted line, external sales were lower than customer purchases, meaning inventory level continued to be optimized. Slide 10. The Americas, Europe, and Asia Pacific continue a strong double-digit growth. In both Europe and the Americas, market growth continued in all categories, while brands NARS and Drunk Elephant enjoyed continued momentum. In Europe, SHISEIDO and Narciso Rodriguez also showed robust growth. In Asia Pacific, markets continued to grow in all major regions, and our company also continued to realize good results, expanding our overall market share. The cost ratio on page 11. The year-to-date cost to sales ratio versus the same period last year steadily improved by about two percentage points due to productivity improvements resulting from the shift to in-house production and the alleviation of rising logistic costs. In the third quarter, we recorded an impairment loss of JPY 6 billion due to the integration of two factories in Osaka, but production efficiency gain of JPY 3 billion to JPY 4 billion per year is expected after the integration in 2026. Page 12. Core operating profit by reportable segment. In Japan, OP improved thanks to higher gross profit driven by the sales growth. It returned to profitability in the third quarter, although the cumulative total was slightly short of break-even. In China, sales growth in the first half was a factor in the improvement. In the third quarter, flexible cost management contributed to the profit increase, albeit the decline in sales. In the Travel Retail, profit declined sharply due to the lower gross profit caused by lower sales. On page 13, our outlook for the current fiscal year. Given the significant market environmental change, we will make a revision of the full-year forecast this time. The impact of the consumer pullback on Japanese products after the release of treated water was not anticipated in our initial plan and resulted in a significant sales decline. The impact of inventory reset in Travel Retail was largely factored in as of August, but we anticipate the impact would be even greater, like a couple of billions. The recent Double Eleven trends showed the changes in Chinese consumer purchasing behavior, showing a decline in bulk purchases due to uncertainty about the future. We have revised our forecast for real growth rate from 11% to 2%. Although a decline of gross profit due to sales decline will be partially offset by flexible cost management and the positive impact of JPY depreciation, core operating profit is now estimated to be JPY 35 billion, down JPY 25 billion. Net income attributable to owners of the parent is estimated to decrease by JPY 10 billion to JPY 18 billion. In addition to the impact of market environment change, this includes gain on sales of fixed assets such as offices and impairment losses due to integration of two factors in Osaka, which was not in the initial plan. EBITDA will be JPY 88 billion. EBITDA margin will be 9%. That is all from me. Thank you for listening. Next stand, we would like to invite Mr. Kentaro Fujiwara, President and COO, to present on the important business agenda. I would like to talk about the important business agenda. In mid-term management strategy plan, we aim to achieve stable growth by shifting to a highly profitable structure through proactive investment and structure reforms. To achieve this goal, the top priorities are to build earning space by bringing back growth in Japan and to win in China. The outline of the reform in Japan was explained in the August earnings briefing. Today, I would like to share the progress to date. Regarding reforms in Japan, we are working to change the overall business structure of profitable group businesses in order to achieve sustainable growth. Based on a core operating loss of JPY 13 billion in 2022, we aim to generate core operating profit of JPY 50 billion in 2025 by generating JPY 38 billion in growth profit increase, resulting from the sales growth and JPY 25 billion through profit-boosting initiatives and efficiency plans. The sales have made already progress until the third quarter of 2023, thanks to the recovery from the COVID pandemic, the launch of epoch-making new products, and successful marketing initiatives investments. Toward 2025, overall local sales are projected to grow in the low single digits compared to 2023. This will be achieved by concentrating on the selecting brands while focusing on the global Asia brands, where we aim for a strong growth in the high single-digit growth rate, same as this year. On the other hand, we expect to decline sales of the exclusive brands in Japan as a result of optimization, including SKU reduction. As a result, sales in 2025 are expected to achieve the same level as in 2019. In the meantime, inbound sales recovery is expected to be -mid 20% level in 2025 compared to 2019 due to a decrease in per capita purchase amount and the shift in the purchase locations by Chinese tourists, despite the positive aspects of a steady recovery in the number of visitors to Japan. Next, as measures to improve profitability by JPY 25 billion, COGS improvement of JPY 5 billion include SKU optimization, brand mix improvement, strategic price increases, reduction in product returns. Another JPY 10 billion will achieve marketing and other expenses, including streamlining of samples and promotional items, logistics operations, and streamlining of IT systems. Also JPY 10 billion will be realized organizational productivity improvement and optimization of human resources allocations. All of these profit-boosting and cost efficiency initiatives will be implemented by the end of 2024, and the company aims to transform itself to a highly profitable structure from the beginning of 2025. Next, I will explain our view on Chinese market environment. First, we assume that the impact of reluctance to buy Japanese products after the release of treated water will normalize by first quarter 2024. We will continue to closely monitor changes in the market environment, take our prompt action. Next, regarding the purchasing behavior of Chinese consumers and the market slowdown, we believe that consumers' needs will become more essentialist with an emphasis on efficacy, and that consumption will become more polarized. In terms of purchasing behavior, we believe that discounts will become the norm, bulk purchase will decline, the ratio of sales at big events will decrease, and the market will shift towards a more mature market. In the meantime, we expect to see growth opportunities in the regional cities below the tier 3 level as the middle class expands and the trade up and domestic international travel recovers. As for the tightening of the regulations and inventory adjustments in the travel retail sector, inventory levels in South Korea are expected to be appropriate by the end of 2023 as a result of the efforts made since the beginning of the year. In Hainan Island, inventory adjustment has progressed and is expected to be appropriate by the end of first quarter 2024. Travel retail business is expected to normalize to a traveler-centered market in the future. China and environment surrounding it will continue to change, but the Chinese market, with its overwhelming size, will remain strategically important. What is important is that in light of these market changes, we will strive to achieve stable growth by transforming our business structure to one that can generate higher profits than ever, even in the midst of change. The travel retail channel has become a normalized channel of purchasing opportunities for Chinese consumers. We will further evolve our integrated approach to China and travel retail. The framework of the structure reform of the China business will include portfolio and marketing reforms to achieve growth in the face of change. We will identify growth areas and promote selection and concentration. Specifically, we will select brands, products, channels, and SKUs to achieve growth and efficiency, and we will continue to reduce the composition ratio of large-scale events, which we have been doing until now in order to strengthen sales during normal times due to changes in the market. In terms of our growth opportunities, we will strengthen our investments in high prestige and high functionality and effectiveness, and accelerate our expansion into 3rd-tier and lower-tier regional cities. We will strategically raise prices, regularize unauthorized sales, and strengthen management in order to generate stable and high profits. In the operation system, we will reduce the ratio of fixed costs to sales by optimizing the storefront structure and organization, and strictly controlling personal costs while reducing costs by localizing samples and outsourcing operations in-house. By implementing these structural reforms, we will quickly transform a profit structure while continuing to invest in marketing that leverages consumer data, strengthen our brand power, and implement locally driven innovations to realize sustainable business growth in this huge market. Thank you very much for your attention. Thank you very much. We would like to open the floor for Q&A. Those who are joining in Japanese language, please use the raise hand button at the bottom of the Zoom screen. When your name is called and the pop-up will be appeared, you will press the button of attend as a panelist and then have your camera on, and then state your name and affiliation, and have your question. It will take a few minutes for preparation. If those are joining us in English, the chat functions and please send your questions to the chat functions. We would like to have your understanding to limit your questions of one at a time. If there is any availability, we will appoint you for the second time. Please start to open the floor for the questions. Please raise your hands. First of all, JPMorgan, Akiko-san, please. I'm going to switch the settings, so please have your microphone on and camera on. Akiko speaking from JPMorgan. Thank you very much for taking my question. Sorry, take a while for unmute me. Thank you very much for your explanation. I would like to limit my question only one. Especially Japanese business. The current situation, overall, you reduced the OP guidance this fiscal year, but what was the situation in Japan against your original outlook? Whether the Japan business is now expected to grow or it is not favorable as you expected originally, that is why you have to revise downward? By the end of this fiscal year, are you able to recover the situation? Also the core OP, JPY 50 billion to achieve, and you share the breakdown already. In terms of the treated water impact exists and also the probability of the inbound business achievement, how likely is it achievable? Including impact of the treated water, what is your viewpoint on that? Thank you for that. The first Japanese situation, the local CP, excluding inbound Consumer Purchase, better than our original expectation. They're growing quite well. On the other hand, inbound, as you pointed out, impact on the treated water was there compared to the third quarter. Yes, the current situation is slightly lower than our original expectation. Having said that, the growth of the Japanese market and growth opportunity going forward, we are seeing that the Japanese business contribution is witnessed. Even the company is now shifting from a lot of marketing investment and then try to generate profit. It's not the case anymore. Overall, the structure reform that we are undertaking, that will be implemented throughout next year. Of course, we shouldn't be complacent, and overall costs should be reduced and need to take some actions to that. Otherwise, the profit generated from the increase of the sales, that will not be realized unless we have a cost reduction. That is why we have 2020 versus the JPY 30 billion. That was the number that we are showing this time. We have been preparing for that. Partially, there were some good results already, but for those in the structure reform. That structure reform will be ending by the end of 2024. After 2025, we would like to realize the profit generation. That is our plan. Thank you very much. In that case, this year, the Japan business deficit or losses still retain the third quarter, but the fourth quarter, that will be turned around and put into profitability or breakeven. This will be the baseline or starting point. Is my understanding right? The profit boosting of JPY 25 billion will be realized around 2025, in my understanding. How it will be realized? You say that partially that structure reform is yielding like a third or a fourth at least, that will be generated in 2024. For this year's landing point, it will be turned into breakeven. That will be the starting point for 2025, a JPY 50 billion to be achieved. That JPY 25 billion of the cost reduction efforts and how it will be realized. Internally, we are making the estimations. Partially that will be realized in 2024 almost. Of course, that means that we will generate better than this year's profits. Part of the structure reform, we need some investment to undertake such structure reform. For Japan business and partially China, we are trying to accelerating the structure reform. That requires JPY 20-plus billion or so, structure reform cost would be necessary. Thank you very much. The next question will be taken from Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. Sato san, please ask your question. Sorry. Thank you. My name is Sato. Hello. I would like to ask a question about the travel retail. In the travel retail, this time, the South Korea, I believe it is going as a macro economy, but the Hainan Island in the third quarter and the high 10%. In comparison to global competitors, I believe that the assumption is smaller. Because it is small, the tight situation or tough situation may continue. Other competitors drop by about 30%. Although you are facing the tightness of the regulation, the reduction is only around 10%. Even with the impact of the released water, the decline is only about 10%. What is the secret? In the first quarter, in addition to just regular travelers and as in the case of South Korea, the number of the tourists are up by 40%. In the Hainan Island by summer next year, the visits may not turn positive. How do you see that this negative trend will end by the first quarter next year? What is the difference between yourself, the Shiseido, and the competitors? Are you talking about the sell-out? Okay. This is not a case of sell-in then. Okay. I see now. Sell-in, yes, it is quite a significant negative. How much was it? Minus 60%. High 60%, in fact, minus. This is reflecting the macro economy then, or macro assumption. Okay, I see that. That will continue into the first quarter at around minus 60%. Am I correct? In regards to the percentage, of course, we have to look into the more details. This year, from the very beginning, as we've been saying since the beginning of this year, last year, due to the lockdown impact, the sell-in happened in advance. For this year, we already lowered the inventory, but the sell-in and sell-out gap was assumed to be around 30-some% from the very beginning. Due to the tightened regulations this May, well, the sell-out decelerated quite significantly. Therefore, we had to reduce the sell-out as well so that the inventory level would be adjusted. With that, by Q1, the major negative inventory impact may be gone. However, one thing in regards to Hainan Island travel retail is now growing steadily. One thing we have to be cautious about is, and we need to look into further detail, about as Mr. Fujiwara also explained, the decelerated purchase behavior of the Chinese consumers. This is something that we need to monitor closely going forward. Okay. This time, JPY 60 billion to JPY 35 billion. I think this mostly comes from travel retail. How much of this reduction comes from travel retail impact? Well, I kind of rounded up the numbers. Our original assumption of the released water- Impact is about JPY 20 billion. Also Chinese market slowed down, also purchase behavior shift impact, cumulatively about JPY 10 billion. Regulation tightening and the inventory adjustment, another JPY 10 billion. Altogether, about JPY 40 billion. There's good business of other regions, also reduced marketing investment, which is JPY 15 billion. We have JPY 35 billion. The major impact comes from September, after the treated water release also the Q4 impact. We will look at the Double 11 outcome, also the market in itself is cooling down. Also, it is even further down in comparison to what's happening in Japan. This is still an early lead, but we'll continue our monitoring, in particular with the Double 11. Okay. At the time of the anti-Japan demonstration, Shiseido recovered quickly, I hope that we will see it again. Thank you. Thank you very much. Next question. Morgan Stanley, MUFG. Haruka-san, please. Change the setup. Have your microphone and the video on, please. Hello. Haruka speaking of Morgan Stanley. Thank you very much for taking my questions. I would like to talk about the China business. At the end of August, at the earnings briefing, you said that the treated water, that was affecting at the early stage. You couldn't assume the impact on that in offline, not really, but online, no streamlining video of the KOL, that's the impact. You say that offline, they are still affected, right? So from September to November or October, what happened? Also e-commerce impact. The commerce through KOL is suspended. Other than KOL impact, do we have any other elements that drives the decline of e-commerce? Also the marketing spending, you are trying to curb the marketing spending in China. Indeed, that because of the sales goes down dramatically, you have to put a curb on the marketing spending. It's natural, from your original expectation, you want to spend certain amount of money in line with the competitors. Handling of the KOL or video is now suspended, also the China clients or China, other players are trying to increase their market share. There's an opportunity from their perspective. Having said that, what is the change in China business in the past two months, and how are you going to address the situation? What is your future plan as well? Thank you. Allow me to answer. September to October, what happened during those two months? The treated water release began, retailers and KOLs find it difficult to promote our products. That's the first reaction. In parallel, the consumer mindset or sentiment, we have been monitoring carefully about their mindset as well. For that, it's now settled quite early in our monitoring, and that was really favorable for us, but that was not supported by the KOL and other retailers' behavior. That was the result in September, October. As a result, our marketing spending went down. That's the kind of impact overall. We were not able to have a good promotion in the past two months. The second release of the treated water, there was the not really big negative impact. All the people or consumers were very silent, I would say. Now we are running the Double 11 promotion. Regardless of the treated water release, especially the overall Double 11 promotion and its trend is much lower than our original expectation. That is the reality. On top, our brand is, of course, a made in Japan brand or a Japanese brand, so that is affected negatively by the treated water as well. In terms of this treated water release, this impact is temporary impact, negative impact in our view. Of course, in the past several times, we had experience Japan bashing type of approach happen in China. I assume that around the first quarter, this negative impact this time will be alleviated. Next is the reduction of the purchasing behavior of the consumers in China. We do not anticipate that. We were also anticipating that there should be some stability in the consumer behavior. To be settled, that timing was a little faster than our original thinking. We need to take that into our account in taking on our structural reform initiatives next year. This 1.4 billion people there will not be gone, but there are some growth area and the negative area, and there are some ups and downs. Overall, we see some impact. In terms of the growth potentials, should be identified clearly from that differences. What we are seeing is that the high-prestige brands are growing. In terms of the products, efficacy or real authenticity, those products are well-received. Specifically speaking, cream, high-priced creams are well-received. That is a product that is well-received by the market still and also the consumers. Young generation consumers were affected by this economic situation, but the 35 years or older, those are the customers who are not affected by such economic changes. Also the Tier 3 and lower, those are not affected. Where do we have the growth opportunities? We need to identify that clearly, we need to allocate our efforts and resources in the brand allocations or brand portfolio. Thank you. Thank you very much. In that case, the investment was not at all reduced, but you are trying to concentrate in some of the spending in investment. This time, the marketing spending was now reduced. Eventually, that would bring down all the market share reduction, you have to spend more money to recover the situation. That happened in the past, this time it's not the case. You are making the focus type of investment. Yes. Temporarily, if we spend less marketing spending, or sometimes if we spend on the marketing spending, we were not able to have a good result. That was the situation in September. We suspend marketing activities. This time, we now understand that this impact was temporary, it's not the real Japan bashing type of approach. Okay. The China business profit that you were thinking at the midterm plan, there were some risks that sales may go down. That is why you wanted to implement that structural reform in China. Is that the right understanding? Yes, your understanding is correct. Thank you very much. Next question is from SMBC Nikko Securities, Ms. Yamanaka. I'm going to switch your microphone, so please switch on your camera as well. Thank you. Yamanaka from Nikko Securities. Thank you very much for the briefing. Earlier, in the first question, there was a mention of the JPY 25 billion profit improvement for Japan and JPY 20 billion of the reform cost is to be budgeted. Can you give us more breakdown? In terms of the timing of this cost, will be FY 2024, this will be a reform associated with the cash out. Optimization of human resources is of a large quantity, am I correct to say that? Or will there be the optimization of the production side or the brand reorganization? How will the cost will be spent through the structural reform? As much as you can share with us. This number, JPY 20 billion, is our current assumption of the reform cost. Going forward, we need to look into further breakdown and attain more accuracy. 2024 will be the year in which we shall strive to complete the structural reform. The necessary cost will be incurred. Therefore, in regards to this structural reform, by the end of FY 2024, we will end it so that from 2025, we'll have a more sound and robust management structure. I will not be able to share with you the specific breakdown today. Okay, understand. Thank you very much. Next, UBS Securities, Kawamoto-san, please. Hisae speaking from UBS. Thank you for your explanation. Do you hear me? Yes? Thank you for taking my question. In this revision, the downwards revision until the third quarter and also the outlook for the fourth quarter, how much have you incorporated this JPY 25 billion breakdown of the third quarter and also the fourth quarter outlook? Why the profit reduction is quite large compared to the reduction of the sales? Are there any other elements? Originally 9% and 12%, that was your original margin target. What is your perspective? In the structure reform, you said that the personnel are control organizational productivity improvement and so forth. I think you would like to implement all those structure reform by the end of 2024. Can you please elaborate on that? Your first question, is that the first half versus the second half, right? First half, JPY 10 billion, that was our profit, and the core OP was improved and minus JPY 35 billion in the second half. As a result, full year, JPY 25 billion minus. That is a full year basis. In terms of the midterm plan targets, what we are seeing now is that there are some impact on the temporary impact and also the structural impact. There are some differences. We need to identify temporary impact and also the structural impact, and especially the China business for the structural element. We take actions at the earliest so that 2024, we would like to undertake such a structural reform, and 2025 will be the year that we will have further growth. In terms of the organization productivity things, allow me now to answer to your question. For the second half, you said that that minus JPY 35 billion. What was the breakdown of the third quarter and the fourth quarter? For that, there were some phasing of the expenses. It's too complicated. I appreciate you take not the quarter basis, but the six months basis. Understood. The fourth quarter, if I take a look at your slides, travel retail or China business would go down. I think that will be the bottom. Is it the right understanding? Because the figure in the fourth quarter is very low. It's not the minimizing or the reaching the bottom. We are seeing the very possible outlook. Based on the possible outlook, we show this figure. Understood. Thank you. Next question. Now I would like to invite Katsuro Hirozumi-san from Daiwa Securities to ask questions. Hello? Can you hear me? Yes, we can hear you. Can you see me now? Hello? Can you hear me okay? Yes, we can hear you. Thank you. Just one question. Page 16 and 17, 18. About the likelihood of this evolution. Is this highly likely? JPY 10 billion and marketing and other expenses and organizational productivity, JPY 10 billion. Basically, page 16 is something that I'm concerned about. There's a JPY 38 billion, the gross profit increase. How likely is it to happen? How much is the revenue arriving at this gross profit increase of JPY 38 billion? In 2025, target of JPY 50 billion, how confident are you to achieve this target? First of all, about the JPY 25 billion, let me start with the cost. Yes, this is the buildup of all the relevant elements. This is just a rough breakdown. In regards to this JPY 25 billion, this is something that's manageable with our own will. When it comes to cost, as you can see here, it is not simply about the product mix and SKU reduction, which gives us the more accurate picture of this amount. Next, about the revenue or the sales. As you can see, we will divide into the local and inbound. As you can see in the upper box, the local sales, we will see the double-digit growth this year. However, from 2023 and after, the local market, the sales growth will be the high 10%. The reason is there are some powerful brands, we will keep on our focus on the powerful brands. Other than that, we will optimize some Japanese brands, we are envisaging some reduction in profit. Net, this is going to be the low single digit for local. Inbound, in comparison to 2019, it is going to recover to mid 20%. That's what is reflected In this assumption, this is not a wishful thinking of a high top line. There are some reduction in the revenue being incorporated for the ones that will go through some reform. I may sound tough, what do you think can drive the revenue down in addition to your assumption? It is difficult to answer for the unforeseeable factors. Now 2023 is coming to an end, the new product launches forecast for 2024 and 2025 already exist. We are confident with these new products in 2024 and 2025. Only factor may be our assumption on the inbound, the other thing is the structural reform, incorporating the reduction in the revenue, the reduction in revenue may happen more widely or more significantly than we currently assume. Of course, we need to keep a close eye on the transition and the decline. When you compare the decline in the revenue at this point and also the future growth of the business, we must go through the structural reform. With some sacrifice with the structural reform, that is a priority for us to have a better future. Understood. Thank you very much. Yvonne, Mitsubishi UFJ Trust. Hyogo-san, apology for earlier technical trouble. Please state your question with the microphone and video on. Hello, Hyogo speaking from Mitsubishi UFJ Trust. Can you hear me? Yes. Thank you for your thorough explanation. I am a fund manager. My question is about, earlier you explained Japanese market, so I understand the structure now, but the current issue you are facing is not from Japan, but it's occurring globally, and you have to cope with such challenges. On a consolidated basis, you have to manage your company, and the current macroeconomic outlook was deviate from your expectation, then you have to undertake some structural reform at the early stage, especially for the global arena. If you have any kind of thinking, can you please share? The top line cannot be achieved, and the cost reduction impact will be realized in 2025. That means that 2024 would be very, very hard year, in my view. What is the sense of urgency to see such a very poor aspects from the 2024? What is your perspective on that? Well, the global business, I think the same principle will be applied because the Japanese structural reform, what is the issue is that the sales will not be generating good enough profits. The top line is increased, but still we cannot achieve a good enough margin because of the big cost structure. That is the issue. Globally, and we are also undertaking the structural reform in China. Certain level of the profit is generated under the current structure because we already undertook the structural reform. Going forward, we need to have more flexibility and secure our profitability under Chinese structure. That is what we need to do. Therefore, we would like to implement another round of the structural reform. We are also taking the EMEA region, like Europe and U.S. We would like to concentrate in the more focused brands. As a result, we are seeing very good results in some of the very strong brands. That would reinforce and then also accelerate our company profitability. That is a really good cycle, and that will lead to the structural sustainable growth of a business. That is my understanding. The structural reform, of course, we are focusing on the domestic business, but this time, consolidated basis, you have to recognize the downward revision. If the company structure is not leading to the profit generation, then you need to undertake further structural reform. I'm sure you do have many initiatives that you can take going forward if necessary. Indeed, if there is any further reforms necessary, yes, we need to do that. What happened in China, that negative impact was not really compensated by other businesses. That was a problem. Because of that, the huge market potential in Japan, that has to be generating and lead the global business. That will be the overall company's structural reform, and especially EMEA region will be right in good situation at the moment. Overall, we would like to take a good balance with the structure reform in Japan. Yes, I expect the impact will be realized at the early stage. My request is that, as Kawamoto san said earlier, that your net sales goes down, and then the profit would be also further down. That kind of explanation or stories must be fully explained. Otherwise, marginal profit, and then goes down, and then the overall sales goes down. What you have, even though it is the consolidated earnings report, if you don't have a proper explanation, we find some of the skepticism in the market. I just want you to explain thoroughly about that. Thank you. Now, it is almost time to close the briefing. Next will be the last question. Ohara san from Nomura Securities, please. Hello, my name is Ohara from Nomura. Thank you. About the revision of the full year plan, I would like to make a confirmation. When we look at the fourth quarter, Japan will see the increase of the profit by 24%, and China embedded is down by 20%. The travel retail is down in profit by about 50% in the fourth quarter. In Japan, up to the third quarter, it is the growth of mid 10%. How will it recover to this level in the fourth quarter? Also, for China travel retail, there's been explanations. What will be the right assumption for the fourth quarter in China and travel retail? Also in regards to the operating profit, deducting the less profit reduction. Am I correct to understand that there's no one-off accounting booking? Let me try to answer. For Japan, high growth level into the fourth quarter. The local revenue, as explained earlier, is going quite well. Every quarter we are seeing a growth in Japanese market. Also in the fourth quarter, there'll be large scale innovation being planned. This will accelerate the growth further. The local customer purchase is likely to grow. We will push it to grow to the high 10% level. For inbound, to a certain extent, from October onwards, there will be the Chinese Golden Week bringing more travelers. Yes, we did see a dip in September, but it's recovering into October. If it continues into November and December, inbound is likely to grow into the fourth quarter as well. This is the background of our assumption of the growth in Japan market in the fourth quarter. In regards to the travel retail, the fourth quarter is significant negative and due to two elements, the South Korea TR and also Hainan Island, and partially impact of the treated water release and also the regulation on the inventory causing the inventory adjustment is being prolonged. For South Korea, the inventory level will be in the realm of about 2 months. For Hainan Island, as of end of this year, the inventory level, the retail inventory will be around 4 months worse, and therefore, until Q1 next year, the Hainan Island inventory adjustment will continue. That's our assumption. Therefore, the heaviest negative aspect will be the Q4 travel retail, as far as we see at the moment. Thank you. Thank you very much. What about operating profit? There's the reduction of the profit and also the cost reduction being calculated. There's no one-off impact then? Yes. As I said, for the most part with the treated water release, there's about JPY 20 billion, and Chinese market decline and also the changes in the purchase behavior, it's JPY 10 billion. Tightened regulation causing the inventory adjustment, another JPY 10 billion. Also there's a top-up from other regions, plus cost saving and marketing cost reduction. There's a JPY 35 billion altogether. The major one-off costs, such as the structural reform, it will not be included in the core operating profit. This is excluded from the core part. The third quarter, we explained about the impairment for the integration of the 2 factories in Osaka. This is also booked separately. Also JPY 10 billion operating income from the sale of the buildings is also outside of the core operating income. Thank you. I understand now. Thank you very much. With this, we would like to finish Q&A session. With this, we would like to finish the briefing for the third quarter results. The IR department will send you the questionnaire following this program. Please fill in the questionnaires and send it back to us for future improvement of the briefing sessions. Thank you very much once again for joining us out of your very busy schedule. Thank you.