It is time for us to start the briefing for first quarter results for the fiscal year ending March 31st, 2023 of LIXIL Corporation. This briefing is streamed live online. I would like to introduce to you the presenter for today. Director, Representative Executive Officer, President, and CEO, Kinya Seto. Director, Representative Executive Officer, Vice President, and CFO, Sachio Matsumoto. Head of Investor Relations Office, Kayo Hirano. I will be serving as the facilitator from IR office. My name is Fukushima. The materials to be used in today's briefing is uploaded on our website. I would like to explain how we proceed with today's briefing. First, Mr. Seto will be providing you information about the first quarter results. That will be followed by a Q&A session. Those of you with questions, please utilize the Q&A button, please put your affiliation, your name, and your question. We will be taking questions throughout the briefing. We will be finishing at 6:00 P.M. Mr. Seto will now provide you the first quarter results for the fiscal year ending March 31st, 2023. President Seto, please. Hello, everyone. Welcome to the briefing of first quarter results for fiscal year 2023. As you know, we use IFRS. The operating profit in the JGAAP basis is core earnings for us. These are the key highlights for today. On a year-on-year basis, revenue increased and core earnings declined. There is a recovery trend for core earnings. Three months ago, as I have explained, we had been in a very difficult situation, but we have explained that the first half was difficult, but we would be able to recover in the latter half. I would like to go one by one. In terms of the cost inflation, we had thought that it would continue until the end of the fiscal year, but for copper and aluminum, there has been a decline in prices. The inventory that we have has suffered the high material price. Because of that, even though there is a decline in the copper and aluminum prices, it would not be reflected right away. There are other costs that would be coming down. However, the impact of the current decline in the costs will be reflected around the third quarter to the fourth quarter. We believe that it would have a positive impact for our business going forward. The first half will be suffering a lot of impact from cost inflation. Profit-wise, we would be facing a difficult question. With regards to price optimization, it is going as planned. The biggest price increase will be coming after October, so full-scale realization will be seen from October. We conducted in April and June a price revision, and this is contributing to betterment of our profitability. As for market environment, it is softening. As you know, the interest rate in the U.S. and Europe has risen and energy prices have gone up, and we have unresolved issue of the Russo-Ukrainian War. On the other hand, with the effort of our employees, the order situation for us is generally favorable. We have not been able to provide our products fully to our customers due to supply chain disruption. According to the businesses, the situations differ. LWT Japan, first of all, compared to competitors, we have been able to receive good news that we did not have out of stocks, and we have been able to ship the products as planned. However, because of the countermeasures against a temporary parts procurement, there was an increase in the costs. However, we are going as planned. As for LHT in Japan, we had been making a hedging contract already, but there were some unexpected significant increase in the impact from Japanese yen depreciation. That was impacting the profitability. As for LWT in the international market, with regards to copper, we had hedged it already, so we are going as planned. Order position was favorable. However, due to issues like COVID in Europe and Americas, we are seeing the issues in the supply chain with labor shortage. Due to this, even though the order position is favorable, we have not been able to supply as much as there is demand. If we were able to supply more, we would have been able to do better. I talked about the sudden hike in the cost three months ago, and that's impacting this first half of the year, but we are seeing improvement. There is a phase-out price optimization that we have been working on to improve the core earnings. We believe that this would contribute to the improvement in the profitability for us. For Europe, as I have said earlier, there has been supply chain disruptions. The other water faucet. Half of that is being manufactured in German plants. Due to COVID, there was a labor shortage in the plant, and we had not been able to make the personnel work on weekends or overtime. There was a lack of response from the labor union, but we have been able to complete the negotiation with the labor union, and now the production is being made on a full scale. In addition, there was distribution capacity issues. Because of that, we opened two new distribution centers. That is adding logistics capacity. In addition to that, in Europe, on the East European side, there has been a decline due to the Russo-Ukrainian War. However, there is an increase in the business in the Middle East. As for Americas, centering around retail, there are a large number of customers who are conducting inventory adjustment. However, we have been differentiating ourselves through focus on the brand, and also we are now using our direct distribution channel rather than using agents in some areas. Also, we have been shifting to the fittings category, where the profitability is higher compared to the sanitary ware. In terms of Japan, we had been working more on the new housings, but now there is a situation of the energy crisis and also interest towards CO2 reduction. There is more demand for insulation windows in Japan and also related to water faucets. We are trying to rationalize the distribution operations between manufacturers and distributors. Also, we have been taking asset-light strategy for cost reduction in Japan and also working on digitization for the improved productivity. The recovery, it will be in full scale, from October, and we are already seeing signs of recovery. The outlook going forward. The cost environment is improving, but the improvement will be reflected, later this year. I think that this will be a good news, for next fiscal year. The bad news is that there are a lot of, uncertainties in the economic environment. As for copper and aluminum, in February and March, the price was at the peak, but the prices are now on the decline. We already had hedging transactions and also the inventory booking was based on, past costs. The impact of the raw material costs is lingering. From mid fourth quarter, we believe that, we can see the reflection of the benefits of the decline in the prices. As for aluminum, the prices have fallen sharply, but we also have for aluminum past hedging, product and also the inventories, which were built while the cost was high and the Japanese yen had become weaker suddenly. also, there was issue with Thai baht. Because of that, for the first quarter, we had seen deterioration. after the third quarter, we believe that the price decline of aluminum and the yen depreciation impact will be offsetting each other for more stabilization. from fourth quarter on, it will be better. As for steel and resin, the prices are not still declining in Japan, but we expect the decline from the third quarter. If this is going to happen, as explained in copper and aluminum issue, the reflection of the decline in the prices will be seen in a later part of this fiscal year to the next fiscal year. As for the logistics cost, it is now declining, but prior high costs will have an impact through the second quarter. However, from third quarter on, the cost decline will be expected to be reflected. Semiconductor, wire harness, and wooden materials. We had to respond in an extraordinary manner for the unexpected issues. The occurrence of unexpected issues have decreased, and we believe that with that, the costs will be reduced. As for forex impact, if we look at it overall, of this will be a plus impact outside of Japan. For aluminum metal it would be a negative impact. Also for sash products from Thailand, there are some impacts there. From the second half, I think that there would be a positive impact. As for the potential business risks, there is risk of energy supply from Russia. Since 3-4 months ago, we have been creating BCP plans. Even if the gas supply is reduced by 45% from Russia in the worst case scenario, through the conversion of the energy, the output will only be impacted by 4.5%. We have been able to respond to these kind of energy risks. There has been labor shortages in the factories, ports, and carriers due to COVID-19. There has been some strikes and absenteeism there, and those are the possible risks that may continue. As for lockdowns in China, in Wuhan, as you have seen recently, this kind of lockdown can be expected going forward. We have been able to respond well in the past, so we would like to bring greater redundancy to procurement and respond to the lockdowns should they happen. The biggest risk is decline in the global demand. However, we have been able to respond to all of the negative factors that had occurred already. GROHE is our number one brand, and those number one brands are strong during the slowdown in the economy. Also because we have global operation, we would be able to sell to Middle East when Europe is doing bad due to the Russia issues. We have been able to capture the window renovation demand. There are good aspects and bad aspects, but I think that we would be able to survive in this market. The numbers is, as I've explained, on year-on-year basis, increase in revenue dropping the core earnings. The increase in revenue is due to FX to a large part. In the case of Europe and U.S., the supply chain related to logistics. Because of COVID, if that didn't cause problems, we should have been able to achieve a better revenue. Particularly in regards to the Europe, the profitability is high. The fact that we have not been able to supply to the level that we should have been able to do, and that has an impact on our core earnings. For core earnings, from three months ago, for the increase in cost and whether we had to hedge. We felt that for a certain duration into the future, we did expect some difficulties here. We did actually predict that to begin with. The first half of the year was not good, but we are expecting to see things pick up in the second half of the year. Now on that basis, and if you look at the consolidated business results, something that is clear is that, and when we look at the first quarter last year, April to June quarter last year, before the cost inflation. The fact that we have not been able to achieve a very strong number there is largely due to the fact that there was the cost inflation, 4.7% of the earnings come down, but the gross. The margin has come down by 6.9%, majority of the reason can be attributed to the gross profit. Of course, SG&A has picked up slightly, but this was more to do with the cost in responding to a special situation or unexpected situation. The situation improving in this area would be one large solution in this area. If we look at this in a big picture basis for us against the cost increasing the price optimization will trail by a certain period. As we see the cost coming down, we now know that we are going to catch up for sure. I think that can be taken as positive news. We have changed the reporting segment. Housing Technology, Building Technology, and the Housing & Service business that was under Yoshida-san is going to be put together as one single segment. For the housing business, it's not a large business because we have asset-light operation there. The Building Technology, the product is very close to the sash business, and so I think it is quite rational for us to put these segments into one. If I explain this based on the previous segments, it's like this. You can see the profit on other segment basis. There is a significant decrease for our HT, and that is because of the hedge for aluminum metal and the cost associated with that had the impact and also weaker yen. The weaker yen was not included in the plan to begin with. For WT, where we saw a decrease in core earnings and the cost inflation was within our expectations. This is the new reporting segment. This is the consolidated financial position. We have been sorting out the balance sheet, and we have become asset-light. However, it is growing. This is because of the increased inventory and the FX translation impact. As for cash flow, we have been improving year by year. As for cash flow and EBITDA, I think that we have become one of the best in the industry. However, this time around, there has been high inventory levels, and also there was a hike in the material cost, and the profitability had gone down. The free cash flow had come down because of that, but overall, it's improving. Going back to the key highlights. How is the situation going compared to what I have talked about three months ago? We had announced the expectation of JPY 80 billion for a fiscal year ending March 2022, and that became JPY 64.9 billion in actuality. This was because of the high material cost. We were not able to expect the JPY 15 billion portion from increase in the raw material prices. If we did not have that, we would have gone to JPY 105 billion. There is an inflation. If you look at this waterfall chart, this is the, you see the price strategy of JPY +48 billion. Overall, our plan is JPY 81 billion. We don't believe that there is a necessity to change this plan. As for revenue growth, there may be some factors that would make us more pessimistic. As for the cost inflation, we believe that there would be a decline trend from the third quarter. As for price strategy, we have been able to do that as planned, so I think that we can go as planned. As for the cost reduction, because there would be cost reduction, we may not be able to do as strong a negotiation as we want. In terms of the inflation, we would not have the JPY 92 billion impact that we had in the previous time. How we would be able to make use of this is a challenge that we would be taking in the longer term. I would like to have the Q&A session. I would like to end my presentation here. Thank you very much. Oreori. We'd like to take questions from here. If you have a question, please use the Q&A button at the bottom of the screen. Please enter your name, your company name, and also enter your question and press the Send screen. The first question is from Nakagawa-san from Mizuho Securities. How do you see the impact from the change in consumption behavior due to inflation we see in Europe and US? Well, in the case of US, and probably the same for Europe as well, but as we see inflation taking place right now, for middle-end to low-end people where the wage is not catching up. There is an element of the people not being proactive in buying, but it's not the case for high-end people, so there is going to be a greater divide. For ourselves, our strategy, we want to enhance our brand value to try to sell towards the high end, and we feel that we should be able to accommodate this situation. Realistically speaking, the overall demand on an individual and item level, we might see a decline. But for the demand for high end, we are still able to see a relative strength there at this point in time. Next question is from Takegawa-san from Sumitomo Mitsui Trust Asset Management. There are multiple questions. We would like to go one by one. The first question is related to the briefing material page 20. The first quarter increase and decrease in the core earnings. The question is related to the waterfall chart, comparing the first quarter actuals and the full year plan. The domestic revenue is JPY +400 million in the first quarter. In the change in the segment reporting, there is an expectation that there will be a JPY +11.5 billion, and what had been revised? And also at the mix & pricing, a JPY +3.9 billion. The full year of forecast is JPY +39.8 billion. Why is that? As for international, in the first quarter it was JPY 9.9 billion in the negative. Why is it, is there such a huge negative, and how would you be able to achieve the plan, with this negative? As for the waterfall chart, I, Hirano, would like to explain about that. To your question about page 20 in the material, about the increase and decrease in the core earnings in the domestic market. What was revised as the annual forecast? Annual forecast had not been revised after first quarter, so the way that the waterfall chart looks like. LBT and H&S is included in LHT. Those H&S was not included in the domestic chart, and because of that, there was a discrepancy in the numbers. This is a very detailed information. On the website, we would like to upload the clearer explanation. We have not revised the annual forecast, so the domestic businesses which were not included in the past was added. The addition was H&S. There is no actual change. The last question is different from what you have asked previously, which is the international region. The full year forecast for the core earnings was quite big, even though the first quarter figures were quite low. As I have explained earlier, from October on, there would be price revision upwards. The copper prices had gone up from February to March, and we were not able to reflect that to our pricing in April. That's why we are revising the price upwards in October. That the copper cost had gone up 50% at the highest. From October, we would be able to reflect those increase in the cost. In terms of the copper cost being reduced, we believe that it would be reflected in the latter half. The biggest impact is coming with the price revision in October. The second is the decline in the cost that would be coming in the January to March period. For the overseas market, we don't have significant concerns. In Europe and Americas, I believe that there are risks for the unexpected more significant their market decline. I don't think that would be impacting that much. Next, we have a question from Takegawa-san. Europe, particularly Germany, is likely to see a tougher energy supply towards winter, particularly due to lack of LNG. Can you convert to alternative energy? This does relate to the previous point. We have three scenarios also prepared, and alternative energy conversion in accordance with the level of the supply being reduced from Russia. In a situation of about a reduction of 50%, we are able to change to an alternative energy, but it's going to see an increase in cost, and we'll try to pass that on to the market. In a worst-case scenario, we will see a delay in the price optimization by several percent. In the fourth quarter, for the decreased portion, there is some savings there, so we should be able to deal with the situation somehow. Next is a question from Takegawa-san. Both domestic and abroad, when there is a price hike, the consumers would not be able to catch up. There may be some impact from the market recession, as well as impact from the interest rate hike. I believe that there may be some impact and how we respond as individual company would be critical here. As for the products, the price of our products is not something that the consumers know so well. The price sensitivity is not so high. It depends on what the competitors do. If we look at the fitting in the United States, our competitors have been increasing the prices. As for fixtures in Home Depot, they have not increased the prices. The low-end private brand products, where we compete against them, the consumers may not want to respond to those price increase, and we may have to fight a negative fight. We want to shift to the areas where we are more profitable. As for the economic recession and the interest rate hike impact, there may be less new construction starts. However, at this point, especially in Europe, order book has been favorable. We have the orders up to the end of the year. The brand equity that GROHE has is playing a significant role here. In the United States, we have changed the way we sell. We have changed the target, and also we have focused on improvement of the brand equity. I think we would be able to bear some fruits there. Compared to Europe, America's market is more challenging. In Asia, we are seeing good situation. Last year, we had faced a very difficult situation, but we are significantly recovering. As for China, it is very difficult to foresee, but I don't think that it would be a rosy situation anytime soon. As the economy slows down, the energy cost increase will have a better impact on LHT products. How we respond to each individual situation in the market will be very important for us in each market. Next is from Fukushima-san from Nomura Securities. It's more or less the same the question from the previous question, and so I would like to skip that. It's a little bit different, so let me respond to this. Please allow me to read out the question. In Japan, domestically, you are increasing the selling price in stages, but in comparison to competitors, where your product may be somewhat higher, would that not lead to a loss of your market share? How about your products' price competitiveness when we compare against the product of competitors? Well, price competitiveness basically comes from two factors. First, the product is it differentiated? If it is differentiated, we should be able to sell a higher price compared to others. We've made a lot of effort there, so we're confident to an extent. Otherwise, are we able to produce the same product at lower cost? We have introduced platform production, and in that regard, we are confident. In regards to the first question, it's difficult to say. Depending on the product, there are different situations. Where we have a lot of competitors is kitchen and bathrooms. For kitchen and bathroom, all companies are not taking similar type of activities. For those who are not increasing price may go after market share increase. Also in the past, I'm not going to mention the name of the company, but a certain company in the past, a company did approach the situation quite aggressively in the past. If we look at this over a long term, if one continues a strategy like that, and there are people who have experienced reduced profitability. For ourselves, you know, it's not a great result, and others in this industry have struggled as well. Not to, you know, work on price increase in that kind of environment is difficult to foresee. It's the difference in level. To take a very strong stance, we may lose market share in the short term, but over long term, I think this will become the source of producing a very good product. For us to continue with this policy, we feel that it's important to do so to improve our profitability for the company. Thank you very much. The next question is from Omuro-san from BofA Securities. There are three questions. We would like to go one by one. First is how does President Seto see the outlook in terms of the housing market in North America? Second is that there is an interest in the energy and that there is an increase in insulation renovation. So would the insulation sash revenue grow going forward? The third is the sales of the headquarters building. In terms of the first question, the housing market is being strong, and that's why the interest rate is going up. I think that the interest rate will continue to go up until the housing market comes down. The second point, the interest towards energy and the insulation sash. In Japan, the triple pane windows, the sales is improving. If we look at the sash overall, all of the products are now in the category of heat insulation sash. We have been able to have a product mix which meets the needs of the market. As for the headquarters building sales and the usage to the buyback of the shares, that's not for me to make decisions. In terms of the selling of the headquarters building, that has already been decided. I, Matsumoto, would like to explain about the contract. The contract has already been signed, and the lump sum payment has been made, and the final sales of the building will be conducted after the moving from the headquarters building is completed. That would be probably in the fourth quarter. Hi. Next is from Kawashima-san of SMBC Nikko Securities. In regard to the price optimization strategy, will you reduce the amount of price increase as we see the raw material cost decreasing? Or are you going to revise the price by looking at competitive situation, given the cost coming down? Well, whether it be the price increase or price decrease, the price revision needs to be done six months out. For October, we can't change the approach at this point in time. I'm repeating myself, and given the situation of the raw material price decreasing, and that will have the true implication next fiscal year worth. If we were to do so, it's going to have a negative implication for us. We're not going to do that. The others are not going to do that as well, because it's like a suicide in one sense. It's up to everyone to decide for themselves, but it's not a rational decision to do so I don't think others will do that. Given the cost coming down, are we going to look at it competitively with this landscape to determine the price optimization? No, because after increasing the cost and price, one will lose out. The cost increase in March, we've increased price, but for April to September, we had to actually withstand a low level of margin. Conversely speaking, when the cost is coming down, and if we actually lower the price ourselves, then the reverse situation will not eventuate, so it's not fair. In practice, for us to provide the product with value that customers are happy with, if we're able to do that, we don't have to lower our price because the cost has come down. That type of competitive situation to create it like a commodity product is wrong, I think as a management approach. For individual customers, and the difference between the lowest customer to highest customer, so we try to remove that. We try to sell at the fair price. That's the basis upon which we have been working on price optimization. Our decision is to sell product at the appropriate price. Now coming down, but it's not coming. It's only coming back to the original cost level. In that regard, that is unthinkable to revise the price downwards. Thank you very much. With regards to the price optimization, Omuro-san has put additional questions from BofA Securities. The content overlap, so we will skip answering his question. Next is question from Fukuhara-san from Jefferies Securities. There are three questions. We will go one by one. The first question, in the lockdown in China, the revenue in the first quarter and the impact to the core earnings, how much impact was seen in which item? Second question, I hear that there are some inventory adjustment in the major home centers in the United States. Do you have any inventory risk on your side? The third question is that at the beginning of the year, you had factored in the inflation risk of JPY 92 billion. Compared to three months ago, I think that you were able to have high expectations profit-wise from the third quarter. How would you be able to go against the JPY 92 billion? The first question. In China, there was 11% decline in the first quarter. 11% number-wise is quite big, but the China business is JPY 14 billion business. There's not a too significant of impact. China is not a driver of our revenue, so the decline was within our expectations. To your second question, there are inventory adjustment in the major home centers. Whether it would be a temporary adjustment or would that be having a more lingering impact, we don't know yet. A lot of the home centers are buying their private brands from China, so the supply chain tends to be longer. For the private brand products, they need to conduct significant inventory adjustment. On our end, we are manufacturing in Mexico. We had seen the supply chain risks, so we had increased our inventory level. We don't believe that there would be a significant increase in the risk for the inventory adjustment being conducted at the major home centers. We have been narrowing down the SKUs under COVID situation, so the impact will be limited. To your last question, as I have explained three months ago, we had considered that there would be a 92 yen in the inflation risk, and we wanted to recover JPY 48 billion. We have been able to go almost as planned. We don't think that there is something that we need to significantly revise. What we would be able to expect from the third quarter is we would be increasing the price in October, and I think that we would be able to improve in that area. It would be better if we are able to recover all of the inflation risk, but so, we would like to work towards that. The next question is from Alma Capital, Mr. Tom Grew. We've received a question, and so please allow us to introduce his question. You've mentioned you are slightly concerned about revenues and demand in certain areas throughout this year. Have you seen anything in first quarter to confirm this view, or is it a prediction? There were no indication or signs. Simply put, against this demand and we were unable to supply our product. It's not the case that the growth itself was that large, but the revenue itself had not really changed from last year, so there are no signs in that regard. Given the interest rate increase, energy crisis, Russia situation, when we take all those into consideration and the demand declining in the market overall, I think that is rational for the market overall. When we consider this from ourselves and we are implementing measures to respond to each of these issues, we should be able to respond quite well overall. Thank you very much. We have another question from Inoue-san. The inflation impact was JPY 142 billion from inflation last year and this year. What is the percentage of the products that you are selling which would not be coming down even after the situation changes? The cost increase by a little less than 50% were coming from the countermeasures costs that we have taken due to supply disruption. For example, when the marine freight had been stopped, we had to use the air freight. Because there was a lockdown in Vietnam factories, we had to manufacture in the domestic factories. We had to manufacture on our own in some of the products. We needed to look for products and there were cases where we needed to procure at higher price. In order to respond to that, we are making our supply chain redundant. We don't know whether we would be able to pass on the cost of the supply chain redundancy as we move forward. I was thinking about your question. As for the non-commodity, when the market price comes down, it will be coming down. As for the fuel, it will be coming down when the market price comes down. The items that we are buying on spot, there are areas where the price would not be coming down. This question is very difficult to answer. The things, the areas where we need the renegotiation after the market goes down, we will continue to negotiate where necessary. Thank you very much. Next question is from Sumitomo Mitsui Trust Asset Management, Takegawa-san, who has asked the question. Please allow me to introduce that question. Why, at the start of the fiscal year, did you not change the segment, the reporting segments, but instead decided to change your reporting segment three months into the year? This is Matsumoto. Please allow me to respond. Now, from our perspective, we did actually leave the change from the start of the fiscal year and have started to reflect that at the first quarter results. At the time of the earnings announcement, maybe that is the gist of your question. For us, we have changed our segment at the time of the start of the next new fiscal year. We are making disclosure based on the new segment for the fiscal year. We've reported the number for last fiscal year in accordance with the new segment as well. The next question is from Alma Capital, Mr. Tom Grew. Can you please give an update on the expansion of NODEA orders and how these are progressing? We are not disclosing the numbers, but NODEA is a high-end product, which is being sold to the order-made housing. The order intake is increasing, but the timing of the sales, this fiscal year we don't have so much, and from next fiscal year on, there would be an increase. One of the biggest concerns is that the lead time, for these kind of, order-made housing is becoming longer. We have labor shortages in the higher-end housing construction. However, this business has higher profitability, and we have high expectations for this business. It's growing. Thank you very much. We have responded to all of the questions that we have received thus far. We have a few more minutes remaining. If you have further questions, we should be able to accommodate them as well. Maybe the way I explained was not appropriate. I'm going to say this in order to prevent a misunderstanding. Now, a JPY 140 billion increase because of costs we've implemented cost price increases and about JPY 25 billion, we've done various types of price revisions and JPY 48 billion this year. Increase by a JPY 140 and response is JPY 73 billion. That is what it may look like. Of a JPY 140, would that all translate to the profit line? No. Those, do we need to decrease over the long term? Maybe, because there was a rapid increase, so we had to implement quite a rapid response. Against that, there were many things. What we can say in that regard is that one thing for us within this industry, in particular for Japan, what we are selling here. We have not been able to secure enough profit for the product that we were selling. How to increase? We did actually see the increases and decreases, but in terms of price increase, what we implemented for price increase was quite justifiable. There is no need for us to reduce this significantly because overall cost has come down. Also, the special response that we had implemented, more than half or about half were the costs associated with special response. It wasn't as easy to obtain understanding as with the raw materials of fuel. In that regard, once that disappear, to what extent would that be reflected into our profit line? Well, we need to give this a go because this was the first time we've implemented something like this. Overall, for us to secure a proper level of profit, I mean, we have been increasing price ahead of the industry. I think the track record should start to contribute more significantly in the future, starting next fiscal year. We now have a new question. From Mitsubishi UFJ Morgan Stanley Securities. Question from Yagi-san. If the impact of the demand decline in the Western countries would materialize, when do you think that would happen? That is a very difficult question to answer. In Europe, the order book is quite full, and we have the booking up to the end of the year. I don't believe that these order booking will disappear all of the sudden. However, for the US, the demand may be softening earlier than that. It is not about the difference between the two regions. It is more about the supply chain difference in the brand equity of GROHE brand. The sanitary ware, which has a lower margin, it has the biggest contribution. The demand decline tends to appear faster. In the latter half of the year, this may materialize. Looking at the dialogue with the customers that we're having now, I think that we can overcome this. That's my hope, and that's why we are confident about recovering our profitability. Thank you very much. I think that is all for the questions. With that, we'd like to conclude the Q&A session. With this, we'd like to conclude the first quarter result for the fiscal year ending March 31st, 2023, for the LIXIL Corporation. Thank you very much for your attendance, and we look forward to.