Now it is time to begin the LIXIL Corporation's second quarter earnings conference call for fiscal year ended March 2024. This call is broadcast on the web, and thank you for your participation today. I would like to introduce today's attendees. Mr. Kinya Seto, Director and Representative Executive Officer, President and CEO. Mr. Sachio Matsumoto, Director and Executive Vice President and CFO. Ms. Kayo Hirano, Senior Vice President, Leader of Investor Relations Office, and Leader of Finance and Treasury, Corporate Accounting and Treasury Tax. And my name is Kawai from the Investor Relations Office. The presentation materials will be uploaded on the corporate website, Shareholders and Investor Relations. I would like to explain today's proceedings. First, CEO Seto will explain the earnings results of the second quarter, followed by a question-and-answer session. If you have questions, please click the QA button at the bottom of your screen, and please enter your organization name and questions. In the first round, only two questions, up to two questions are allowed for each participant, and you can enter questions at any time. We will close at 6:00 P.M. First, CEO Seto will explain the financial results of our Q2 of the fiscal year ended March 31, 2024. Hello, everyone. I would like to explain the Q2 results of fiscal year ending March 31, 2024. As usual, I would like to start with the key highlights of the first half. Year-on-year, well, the revenue slightly decreased, Core Earnings increased. There is an impact of a foreign exchange, and excluding a foreign exchange impact, the revenue went down. Particularly, well, the business performance in Europe was bad, but in Americas, China and Japan, new housing starts are low. Against this background, our revenue is struggling. The core earnings increased by JPY 2.8 billion to JPY 8.8 billion. The biggest challenge was international business, particularly in Europe, the weak demand, and probably the weakest demand in the last 40 years in European market. Other countries performed, well, poorly, but Americas are better than the last year, and China's performance is not necessarily worse than the last year. In the Japanese market, the gross margin improved. However, the volume is not growing because the very slow occupier-owned homes. In Japan, we're entering a renovation market, but when the volume is low, the ratio of the fixed cost becomes a burden for the company. Going forward, we are not expecting a tremendous growth in Japan, but overseas, particularly in Europe and in Americas. I don't know when, but sooner or later, there will be certainly the recovery of the market, and then we will be able to benefit from the growth. And to be prepared for that time, we are now implementing structural reforms. And this quarter, I spent money to execute the structural reforms. A full-year dividend forecast unchanged, interim dividend, JPY 45. Next slide, key highlights. Summary of the results of our first half. The new housing demand is very, very weak, particularly in the occupier, owner-occupied homes. This is creating a setback for us. And we are seeing a demand for the insulation, higher insulation products, and that has contributed to better profit. [Foreign Language]Europe is the cash cow, and that has put pressure in terms of the profitability. In terms of the second half- The demand for new constructions, the recovery, we are not, doesn't look promising. However, the renovation demand for insulation products, as the temperature drops, we believe that this will continue to be strong. As mentioned earlier, we were ahead in terms of the price optimization among the competitors, and as for the first half, more than the decrease in the new construction, we lost our share. But gradually, we are seeing a recovery trend. The other competitors are catching up in terms of the price optimization, and they are trying to catch up on share. So in addition to the insulation for renovations, we believe that we can recover the share. So when it comes to the renovation for the second half, we believe that we can expect a recovery. As for the international business, as repeated, we were expecting an earlier recovery in terms of the European market, but we haven't been able to see that. So we need to actively drive and carry out the structural reform. The structural reforms are mainly carried out in the Americas and Europe, and from Q4, we believe that the results will be reflected from the Americas. We have invested in order to drive this structural reform. In terms of the revenue, as I said earlier, it's almost flat. But when in terms of the domestic market, thanks to the effect of the price optimization, it has grown. If we exclude the foreign exchange impact, the international markets has decreased. Especially, we are struggling in the European market. In terms of the core earnings, we are very close to what we have expected, which was JPY 8 billion, and we landed at JPY 8.8 billion, which is up from last year, slightly. So gradually, we are seeing an improvement. However, unless European market fully recovers, we cannot expect a significant growth. It hasn't worsened, but gradually it is improving. That will be the situation for the international markets. In terms of the Japan market, we are seeing some recovery. As for the profit for the quarter, last year, we were able to gain because of the transfer of land. However, there has been a loss this year. When we look at the IFRS, we look at the core earnings. We focus on the Core Earnings, and that is because our company, for the past couple of years, for another 2-3 years, we probably need to continue different tactics or measures like sales or disposition. There might. Sometimes it'll be a gain, sometimes it'll be a loss. The one-off measures, and we don't have any more big assets remaining, but when it comes to minor assets, there may be ups and downs. And therefore, this quarter, unlike the previous quarter, or compared to last year, we are seeing a decrease in terms of the profit before tax. As for the consolidated business result, in that sense, for the Core Earnings, we did see a slight improvement. But for us, the European market, the European business, we, in order to improve the Core Earnings, we need to make sure we improve the revenues in the European market. And wherever possible, we are going to reduce the expense, and wherever possible, we are going to grow the revenue. And with that, we want to gradually make an improvement. In that sense, for Q2, the LHT, the demand was strong since April in terms of the insulation for renovations, and we are recognizing the revenue, and that is moving very strongly. And in addition to that, we were ahead in terms of the Price Optimization for the new houses, and the shares that we lost in the sashes are, are finally starting to recover, and we're starting to see that from October, or maybe from September. So I think this is a good sign. In LWT, in the Japanese market, I think we optimized the prices in all the product categories ahead of competition, but now competitors are already, well, have optimized their prices. I think this is a good positive for us. In Europe, which had been a cash cow, needs a close monitoring going forward. The equity ratio is a little bit higher, particularly because of the foreign exchange. We declared fair trade, and, well, upon the request by the Japanese government, we improved the terms of trade with the suppliers, so this resulted in a higher working capital. On the other hand, yeah, sorry, I mean that we reduced accounts payable based on the declaration for building a partnership, and at the same time, we also shrank the inventory. So this resulted in the improvement of JPY 2.5 billion year-on-year. I think we can further shrink the stock so that we can improve the cash flow. From this page onward, well, I would like to omit my further presentation so that I can take your questions. Thank you.[Foreign Language] So now we would like to move on to Q&A session. If you do have a question, please click the Q&A button at the bottom of the screen, and please enter your organization, your name, and your question. And please send it to us. And let me introduce you- with the- let's start with the first question, which is from Goldman Sachs Securities. From Okada San, we received two questions. The first question: The housing sashes was doing well, continuing from the first quarter. Will this continue in Q3 onwards as well? The government is planning to continue with some kind of a subsidy, but will this positive impact continue? I believe that this will continue, definitely. Of course, the subsidy was a trigger, but because of the rise in the energy cost and, as a result of the renovation of the housing sashes, they were able to keep their houses warmer, or they were able to cool down their houses with their air conditioners, and that has been spreading with the word of mouth. It happened in Germany, but we're hearing that here in Japan as well. So in that sense, we believe that the positive effect will continue. The second question. In American and European markets, you have been trending downward. What's your outlook on its impact on a goodwill and intangible fixed asset valuation? I would like to hand over to our CFO. Thank you very much for your question. Impairment, I think, a concern with respect to goodwill and intangible fixed assets. The performance in America is now showing signs of recovery, and the stock level is coming down. Therefore, for both of this, well, it's creating a positive impact on a future cash flow calculation valuation. Interest rate was raised in the first and the second quarters. This gives a negative impact on a future cash flow. So there are both a positive and a negative factors, and acc ording to our evaluation, there's no need for impairment losses. That's our conclusion, and that is the opinion we received from our audit firms. Europe has had high profitability, and there is no sign in Europe of a potential impairment or risk, and that's what we heard from auditors. Next, two questions from Nakagawa-san, from Mizuho Securities. The first question is: Tough business environment continues in Europe, and what is the outlook for the second half? Other players shared in their earnings release that the negative impact of heat pump subsidy in Germany is lingering, and economy itself remains to be weak and sluggish. Do you think it will hit the bottom next term? The tough business environment will probably still continue for a while. The heat pump subsidy, negative impact of the heat pump subsidy, I think is starting to settle down because the heat pump itself, there's been excessive stock. That's the information that we have obtained. But more than that, the interest rates are increasing, and because of the Discounted Cash Flow, the asset has come down. So the asset prices are coming down, and the other commodities' prices are going up because of the inflation. So rather than investing for the household related, they would probably purchase the other commodities. A lot of the consumers are choosing to use their money that way. So in that sense, inflation and the, the interest hike, interest rate is going to be the, the changing factor. According to what is happening in Europe recently, the ECB has decided to postpone the, interest hike this time, and I don't think there will be an active raise in terms of the interest rate. And the other factor is the inflation, and when it comes to inflation, obviously it is slowing down. As for the unknown factor, including the what is happening in Israel, if the oil prices, crude oil prices, goes up, will the interest rate go up as a countermeasure? The growth economy, economic growth rate in Germany has become negative in Europe, in Germany, so it might be difficult to take that factor. Therefore, there's a possibility that the interest hike next year is less likely, and that might become a positive effect. As far as I know, we are not doing the destocking. The dealer distributor's stock level is stabilized. So it's all about whether the end users are going to have the confidence or not, and I think that's going to be the trigger. Right now, we are in a very strange situation in a sense that not only America, but also for, Europe, the demand itself is very strong. However, if you're going to invest, people are afraid that the value is going to come down. Therefore, the pent-up demand is existing, and heat pump has not fully prevailed. And consumers who has installed the heat pumps, they will have to work on their pipings. So at some point in time, we believe that that is going to have a positive effect. If we're talking about the next term, as in next year, there's a possibility that it will hit the bottom. For us, we thought this started this January, but back then, when we made the forecast, by the end of the year, we thought we will see some signs of recovery, but that is starting to look unlikely. But sometimes in the next term, next year, I think there's still a possibility of recovery. The second question: in order to stimulate the demand for the water system related renovations in Japan to improve your earnings, what measures are necessary? Well, insulation and renovation grew in the Japanese market. We recommend the follow-up, improvement and renovations to those existing customers. That is very important because our big target is not just... doesn't stop at windows. We want to expand the scope of our offerings. So starting from windows, we want to make even a broader recommendations. And water system renovations has been the strength of TOTO. And water construction suppliers have very close relationship with TOTO, so perhaps we need to find a different way of competing against TOTO in this area. Two questions from Miki-san, from Citigroup Securities. In terms of the Core Earnings, consolidation adjustment for the first half was JPY -17 billion, which has improved from the previous year. What was the reason for it? Full year is planned at -JPY 46 billion. Do you think there's going to be an increase in the negative consolidation adjustment factor? CFO, Mr. Matsumoto, will answer this. I think you are referring to slide page 20. The results and forecasts by segments for the full year forecast. As for the consolidation adjustment, last year it was -JPY 20.5 billion, and this first half was JPY 17.1 billion, so there's about JPY 3 billion reduction. This is contributing to boosting the profit by JPY 3 billion. I think your question is referring to this point. As I mentioned earlier, the stock level is coming down, so the in latent gain, unrealized gain. So among the stock, what is included in the stock, if we would have sold it outside of the company, we could have recognized the gain. That needs to be reduced. Because the stock level is lower this year compared to last year, therefore, the reduction amount has been adjusted, and that has come down. That would be my answer to your question. Now, when you look at the full year forecast, it is minus JPY 46 billion, which is a significant amount. Basically, there are two major reasons. First, each of the organizations full year forecast includes some areas which is difficult to forecast. Therefore, we are looking at the risk for the overall business. And secondly, it is the expense that is related to the structural reform. These two are the major reasons. Risk assessment and Structural Reform expenses, that is included, those are included in the JPY 46 billion. Next question. Right now, geopolitical risk is growing in the Middle East. Are there any changes going forward in the business environments in the Middle East? For example, the decline of consumer confidence and the disruption to supply chain. Well, honestly, we will be in a better position in the Middle East. Of course, it depends on a geopolitical situation. Saudi Arabia and UAE are big players in that region. ... If those countries were attacked, well, that risk itself is very, very small. On the other hand, geopolitical risk in the Middle East is, from our perspective, higher crude oil price. Saudi Arabia right now is enjoying construction of boom, and then, well, it's going to become even richer to fund those housing projects. So Saudi Arabia's national coffer is bigger than before, and they are using the wealth for younger generations in Saudi Arabia. The housing boom is most prominent in Middle East. Hundreds of thousands of houses are under construction. Well, I hear that, or, there is a project to build 1 million houses, homes. So this is a construction rush, and I think this higher level of new housing starts will continue in the Middle East. The other risk you mentioned is a supply chain disruption. We don't produce well anything in the Middle East. Middle East is a destination of our products. But Saudi Arabia is a new requirement to produce our goods in Saudi Arabia locally, so we may be affected by that. So to answer your question, geopolitical risk actually is going to result in even a stronger demand in Middle East, particularly in UAE and Saudi Arabia, where the risk of attack is very limited. We don't see any problem there. Israel business is also very limited for us. We have about a team, a personnel there, so I don't foresee any serious damage because of that in Israel. Next, from SMBC Nikko Securities. We have received two questions from Kawashima San, and the first question is: Can you share the progress of structural reform to an extent possible? The impact on the earnings release, for example, other expense, is not that significant, so should we understand that there's a delay in plan or decision-making? No, that's not the case. However, when it comes to structural reform, the scale and depending on how you carry it out, sometimes it is recognized as a business expense, sometimes it is an expense outside of the business. This time, the scale was pretty much limited, so it is looked as an expense within the business. So we did look at, we did have certain expense. But the point that I would like you to understand is that I think there are three types of structural reform. First is to sell and dispose the assets, and we're going to start selling from the non-core assets, and we have been continuing to do that. And major assets, we are done, but we still have minor assets remaining. And that is impacting the ultimate profit. Whatever that we have sold in the first half of this year, either the profit was limited or there was a loss. And secondly, the personnel expense or the part that relates to the people. Americas and Europe is where we are taking on, and as for the Americas, we can move with speed, because there is a specified rule, and we can carry it out as long as we inform. This is going to happen in Q3, and the profit will be realized in Q4, whereas in the European market, it's not that easy. In the case of Europe, the unions are very strong, therefore, it will require certain time. So in conclusion, when it comes to expense, not everything is going to be recognized this year, some will be next year. So already, we have spent the expense in the Q2, and we are driving the actual activities. And lastly, the assets that we are owning, we are. What are we going to do with the assets? And that will require some time. Hi. Next question is from Mr. Kawashima of SMBC. The second question regards slide 10 and 11. Well, you need to catch up a lot in LWT. What's your expectation? LWT is suffering. Do you think LHT is going to make a contribution to make up for the weakness? Well, in Japan, we raised the prices ahead of our competitors. And now, finally, well, well, fortunately, competitors also raised our prices, so we are recapturing the market shares. So that's for one thing. In Europe and in America, we are implementing structural reforms, and the effect of these reforms- ... is going to create a reduction in expenses in Q4. Sales are also recovering, although slowly, particularly in the U.S. market. LHT insulation renovations yes are likely to record good numbers. So from Fukushima-san from Nomura Securities, we received a question related to the structural reform, but we've already answered this question, so we will skip this one. Next, from Watanabe-san from Morgan Stanley MUFG Securities, we received two questions. The first question is again related to the structural reform, so I will let us skip this question as well. The second question is: Can you share the characteristics by countries and regions in Europe? For example, we do see a lot of media coverage for Germany, but including the other regions, when it comes to the business situation of your faucets, I would like to learn more about it. What's happening now is that interest rate is going up, and as the interest rate goes up, the value of the assets owned is coming down, and at the same time, inflation is happening. And because of that, the decrease of the value and also the speed of the interest hike, when you compare that, in order to get a higher investment return, it's better to invest in the other assets. And also depends on the, what is the, the weight of the variable interest rate and also, the amount of the loan. And Sweden is the worst case. Most of the mortgage loans in Sweden is variable interest rates, so the 4% interest hike has impacted the mortgage loan interest as well. And also because it is a cold country, there's the inflation of the higher price of the crude oils, therefore, they're in a very tough situation. Also, Netherlands is in a difficult situation as well. The household debt against the GDP is more than 100%, which means that you're not going to be able to use your income for other purpose. And also the inflation situation is very severe. Rather than purchasing a house, it's better to buy other commodities. Therefore, it's a tough market situation as well. Same thing for Germany as well. When it comes to France, compared to Germany, the house debt balance versus the GDP is higher than in Germany. However, compared to Germany, the retail portion is higher. Germany is sold in two layers, so there are the distributors who hold the stocks. They carry the stocks, and we sell from there. So the ultimate stock is coming down, but the industry overall stock takes time to be reduced. So it's easier to see the recovery in France because of the structure. For the Southern Europe, compared to the Nordic countries, it's not that bad. And East Europe, the economy itself is not that strong, and they are depending on Germany as their economic client. So therefore, the economic situation is not that good. I hope I answered your question. For Mr. Tom Drew of Alma Capital, two questions. The first one is please, give more detail about what restructuring you are carrying out, U.S. and Europe, and why U.S. will be recovering from Q4. Well, there are a couple of reform actions. U.S., because of our rules and our regulations, it's easier to execute those reforms in the U.S. The second quarter is better than first quarter in the U.S. The second quarter is also getting a better year-on-year because our fitting share is getting higher. Since the last year, as I have mentioned a couple of the times, the sales mix has been shifting from a commodity to high-value fitting products, and this has worked to our advantage and helped us gain more market shares. Cool. Second question: Please give an update on the luxury brand and window interior renovation? I think you're talking about the Nopia, and this is for the high net worth, and we launched this business. And finally, we are starting to see the profitability, and not only in Japan, but also seeing interest from the Asian business as well. And when it comes to the Asian business, when we launched this business a couple of years back, we were looking at JPY 1 billion or JPY 2 billion in terms of the revenue, but this term we're looking at JPY 10 billion, and next year it will grow to JPY 15 billion. And most of it is bigger windows than in Japan that we are selling in Asia, and their sales are strong. The luxury brand has bigger windows, and we're seeing interest there as well. So from that perspective, when it comes to the window interior renovation for the luxury brands, including the Asia business strategy, it is critical. When it comes to the interior, last year there were some accidents or fire cases in the other companies, and we became the alternative. For that, the competitors are taking back. As for the latter half, just like the other products, because we are ahead in terms of the price optimizations and other competitors are catching up, and we see progress there as well. When it comes to the interior renovation, we have the solution where we can show it over the screen, and that is gaining popularity, so that is also promising as well. Next, Mr. Teraoka of Daiwa Securities. So you haven't changed your plans. But is it really possible to achieve JPY 40 billion for the full year profit? We define our assumptions, and international, including Europe, will have a recovery. That is now very difficult to do. And the second assumption was the successful structural reforms, as well as our share growth in the Japanese market. But I think we can, yes, achieve that. Second question, regarding the structural reform in the overseas, what are the positive effects that you're assuming? At this point in time, I can't give you the specific amount, but of course, roughly speaking, 20% of the revenues, the revenue is down by 20% compared to the good days. So once that is going back, we get to the ideal position. Compared to the competitors, we are asset heavy in some areas, and we hope that this is going to be an opportunity to turn that around. For Mr. Mochizuki of the CLSA. ASB turned a profit in the second quarter, but the SC core earnings ratio was low at 1.2%. What is necessary to improve the profitability of ASB? And, also, will it help me understand the risk of factors leading a loss? Well, the key is to grow the sales of faucets and to offer differentiated products. In this regard, we are on the right track. On the other hand, the risk of a core loss was due to a large sales of commodity products to the retail sector. But as is clear from the stock level, our dependence on commodity is now lower than before. We are going to sell more profitable, better margin products. Will the Structural Reform cost recognized only in this second half, or is there any chance that the cost will be recognized next term, next year? If Structural Reform continues, there will be a negative impact on the morale of employees. Are there any concerns? It will not be the same amount of cost, but we are planning to recognize next year as well. In terms of the amount, we have not decided yet, so I'm not able to answer on the spot. If we continue with the Structural Reform, it will impact the morale of the employees. The economic downturn in America or Americas or in Europe, employees are understanding that and other companies, other players. hansgrohe already has made a major restructuring. They have announced that. Among our competitors, there are some which went under, and there are some which has been acquired. Given that situation, we believe that we have gained understanding among the employees of the situation. The GROHE and American Standard, we bought from a private equity. And areas which has not been invested, we are making the investment, and that has been appreciated by our employees. Next. Another question from Miss Kashima of Nomura. Are you considering restructuring in Japan other than insulation or renovation? It seems that the business environments will continue to be very difficult. Of course, when the demand is weakened, we need to do something. And our policy is asset light, and there is an agreement on this point. So restructuring, yes, we will continue to do that. Second question. In order to achieve the full year target of the Core Earnings in the second half, you need to achieve more than JPY 21 billion. Can you give us the breakdown of the domestic, international, LWT and LHT? As for this question, if you turn to page 20, we have the first half results and also the full year forecast. We have it for LWT, LHT, and Japan and International. I'm sorry, but if you can work out the subtractions on your own. Next. It's Mitsui Sumitomo Trust Asset Management, Mr. Takegawa. ... in the earnings call at the beginning of the fiscal year, you said that you would spend a lot of that restructuring of cost. Would it be spent all in 4Q? What has changed, and why? Well, not as a Core Earnings, but restructuring a cost under that level was our assumption. But actually, we were able to recognize it. And actually, yes, we spent some money for restructuring, it was recognized as, well, ordinary expenses. So yes, we spent reasonably a lot of money in the second quarter for restructuring. We needed to negotiate with the trade unions in Europe, so fourth quarter or next fiscal year is going to recognize the restructuring of cost for Europe. As for the dividend, will it be paid out as planned? As for next year, would you not reconsider including the payout ratio? The two terms upon- because of the supply chain and because of the pandemic, this year, because of the situation in Europe, basically these are all external factors, and once we recover from that, we can grow the dividend itself. When we think about the payout ratio, well, we need to consider what we would like you to consider, is whatever that is not the core business, we are trying to dispose, and also the assets as well. In that sense, sometimes we can gain, sometimes we make a loss. We are going to dispose from whatever that is easy to get rid of, then of course, that will cost us a loss. It's not that the cash is coming down, so in reality, the tentative cash that we are earning, we believe that we can tentatively return it to the shareholders. So until the business fully recovers, I think it's possible to continue with the current dividend level. However, when it comes to the payout ratio or the decision of the dividend payout, it's not just made by the executives, but it is decided by the board of directors as well. So, I don't think I can comment about the future, but at least my personal opinion, as I stated, I believe that we can continue. Mr. Yagi of Mitsubishi UFJ Morgan Stanley. How ASB turned profitable in the second quarter, and what's your outlook for the demand in the second half in the U.S. market? Well, as I said earlier, we are now focused on fitting, so the share of the fitting against the sales is higher than the before. And, sanitary ware stock is now coming down. The demand for the, in the second half, well, it's not necessarily better than the Europe dramatically, but we are seeing interest in fitting our products with our customers. So it's not going too bad. It's not going to be amazing, but it's not going to be bad either. Second question? Second question was related to the timing of the structural reform, so, let us skip over this question. Next, is from Mitsui Sumitomo Trust Asset Management. Takekawa-san has sent in additional questions. Regarding the domestic remodel market, what is the situation outlook for the inner sashes after the special demand? Personally, I don't think it was a special demand. Basically, there was a potential, especially the Japanese windows, windows in the Japanese houses, with the single glasses. More than 80% were single glasses, and they needed to be changed, because that will push down the energy cost and lead to comfortable lifestyles. So I think there was the potential demand. And as the national government, based on the energy crisis that we are facing, and also as a countermeasure for CO2 emissions and from an environmental perspective, they decided to issue the subsidy. So I don't think this is going to finish in just a year. In the case of Germany, back in 1990s, late 1990s, the situation is still continuing up until now. As a result, the overall housing industry demand, 75% of the overall demand has shifted to the remodeling or the renovation. So there are many, many houses, and the replacements are only happening at hundreds of thousands, so we believe that this demand is sustainable. We have answered all the questions so far. We still have some time left, so please ask your questions from a QA button and enter your company name and question. ... CLSA Shokei, Mr. Mochizuki of CLSA. When the sales go down, well, business, Core Earnings ratio of GRI, I think it's going to go down. Do you think that for the next, maybe six months, this downward trend will continue for growing or going up? No, there is no reason to expect a further deterioration, because the demand recovery, while there is still uncertainty, but dealers stock level has normalized. So now it's all up to end users' demand. I don't think it's going to go down dramatically. There are potential factors for improvement. For example, cost reduction through structural reforms, like headcount and disposal of assets. They will certainly contribute to a better margin. We still have some time left, and we welcome questions from the participants. If you do have a question, please click the Q&A button and enter your question. From Mitsui Sumitomo Trust Asset Management, Takegawa-san has submitted additional question. Domestic, the remodel consumers, consumption tendency in terms of the plumbing as well, can you share that with us? I commented to a similar question earlier. In the case of remodel, the replacement demand and there's the renovation demand. As for the replacement itself, it's solid, but we get a lot of it from the construction company, so it tends to move to total. Now, when it comes to the renovation itself, if they do the window renovation, they want to do renovation for the other plumbings, and we need to connect it to new business, though we have not been able to do that yet. If we're able to connect it to the other businesses, it will help us to improve our performance. In a nutshell, we did not believe, we did not expect the window renovation demand is going to spike up. Because of that, we have not been able to take up all of the opportunities for the plumbing. Mr. Meckie of Citigroup. Will you please comment on your outlook on Chinese business? Well, year-on-year, our business performance in China is not so bad. About our exposure in terms of the sales is small, only 5%. And our business in China is primarily around renovations, and we sell shower, toilet, integrated systems. Not toilet, but it's integrated units. And specialty showers for senior people has been strongly promoted in China. As a result, in China, well, there will be more and more senior people who require care, and there is a strong demand for care products. So it is not so well, a fancy segment, but it's getting better and better. Next, from Goldman Sachs Securities, we have additional question from Okada-san. The aluminum prices is flat, year-on-year, and it is lower than your assumption. Any chance that the LHT's profit margin of your LHT business will exceed the plan? We have reserved ahead, and we have hedged it, so I think this is going to be something about next year rather than this year. However, the margin itself, the increase of the, the interior, inner windows, is higher than expected. We believe that is the reason why we are seeing a better performance. So far, we have answered all of the questions. We still have a little more time left, so we welcome additional questions from the participants. If you do have a question, please press the Q&A button, and please enter your question. It seems that, there's no more questions, so we would like to, finish the QA session. Thank you very much for your many questions. With this, I would like to, close LIXIL Corporation's earnings call for Q2 of the fiscal year ending in March 2024. We ask for your continued support. Thank you very much, and goodbye.