Thank you very much for waiting. It is time for us to start the briefing for Q1 results for the fiscal year ending March 31st, 2025. This briefing is streamed live online. I would like to introduce to you the presenters: Director, Representative Executive Officer, President, and CEO Kinya Seto. Executive Vice President and Chief Financial Officer Mariko Fujita. Leader of the Investor Relations Office, Aya Kawai. Serving as the facilitator is from IR Office. My name is Setoguchi. The materials for this briefing are on our website in the corner for Investor Relations. Today's proceedings are as follows: Mr. Seto will explain about the performance for Q1. That will be followed by a question-and-answer session. If you have any questions, please press on the Q&A button. Please put your affiliation, your name, and your question. Please, we would like to limit the questions to two per person. We are taking in questions during this session. We are expecting to conclude at 6 o'clock. Now, President Seto will explain the Q1 results for fiscal year ending March 31st, 2025. Thank you very much for being here. I would like to start the presentation. I will be talking about the performance for Q1. As I have said in the last briefing, for this fiscal year, we have said that we will see the difficult situation and we will continue our structural reform. The environment continues to be difficult as we had expected. From January of this year in Japan, the number of housing starts had been lower than it was originally expected. For July to August, it is said that the new housing starts will be reduced by around 10%. However, the renovation demand was higher, and because of that, we have been able to perform as we had planned. In terms of the overseas business, as we have been saying since last year, the U.S. and Europe have seen a rise in the interest rates, and because of that, the demand had been sluggish in the housing market. The situation has not been changed. The sluggish situation in China has not changed either. The only good regions are India and the Near East. We were in a very severe situation. For the first quarter, we are almost at the break-even level, and the numbers are almost the same as the previous year. It is just as we had expected. As for the domestic market, we had seen a decline in the demand for new houses. However, we have been able to offset that with an increase in the renovation demand. As for LHT, the window renovation demand had recovered, and we are seeing a gradual recovery in that area. The situation for both LWT and LHT is as we had expected. As for the overseas market, there are fluctuations in the U.S. and European market. When we look at the market objectively, in the United States, the new housing starts had seen recovery. On the other hand, renovation demand is not so high. As a result, because we are strong in retail, the sluggish sales in the retail market had negatively impacted us. And also, there was an additional write-down for DPI, and because of that, the U.S. had seen sluggish sales. However, in the European market, we had done better. The new housing starts in Europe are sluggish as well. However, we had been able to recover in our market share, and order intake is increasing. So the U.S. market and Europe are offsetting each other, and we have finished the first quarter as we had planned. There are some signs of recovery, and we may see a better second half. However, in July, the situation had not changed. Europe was relatively good, and the U.S. was not so good. We have said that we would continue structural reform, and because of that, we have invested in that area. As for DPI, there were additional inventory write-downs. There was an increase in the tax cost. So because of that, it impacted our performance. However, for the operating cash flow, it had been generated steadily, and free cash flow was JPY 14.6 billion for the first quarter. The inventory is coming down, and we need to manufacture more for the overseas market. I would like to talk about the current status for the fiscal year ending 2025. The new housing starts are sluggish. However, we are seeing an increase in the visitors to the showroom. From the mid to end of May, we saw an increase in the visitors, and in June, we had a steady inflow of visitors. In Japan, when the customers come to the showroom, they would be conducting the renovation three to six months out, and this would tell us that we would see a better situation towards the second half of the year, and that would be positively impacting LWT. Toward the third quarter, we will be launching new products in almost all of the categories. We would like to capture the demand from launching new products. As for LHT, this is a business centering around new housing. However, with the demand for renovation for doors, we are seeing positive movements, and we would be focusing on the overseas markets, and we believe that for the future, we will have strong performance. As for the overseas market, excluding India and the Near East, the situation is not so good. If we look at the end-user market in Europe, US, China, we are seeing difficulties. For Asia, the first quarter was bad, but from the second quarter on, we are seeing signs of recovery. In India and the Near East, we are seeing steady growth, and we are seeing good performance in the water technology area. For the US, the new house demand is increasing, and our performance under that situation was not so good. On the other hand, for Europe, there was no objective recovery in the market, but the order is increasing in Europe. There is an increase in demand for showers, and those were individual demands. And as for the U.S., overall, when there is an increase in the new housing, the companies which are strong in trading will do better. If the refurbishment demand does not go up, the retail remains weak. So in the U.S., we are dependent on the retail market, and because of that, we were sluggish. So another reason for not doing so good was because of the DPI write-down. But in the second quarter, we would not have that kind of negativeness, so we will do better. So in the U.S., overall, we were sluggish, but if we look at the overall share from the previous year, in fiscal year 2023, if we look at the market data, the volume had been coming down for other companies, but for the water faucets as well as the toilets, we had increased the volume. However, for the bathtub, we were sluggish, and we need to work on this for its recovery in the coming years. So there may be some macroeconomic changes, like the interest rate cut, but we will be responding towards that by improving our supply, and we would like to continue to conduct structural reform, inclusive of the HR measures. We believe that the U.S. market will recover sometime during this year, but in the U.S. and Europe, we would expect to stay sluggish, and we will do whatever we can. And the result for the first quarter, based on what I have just explained, basically speaking, as for revenue, we were more or less at the level we were at a year ago, and the core earnings were just slightly over break-even, as we have expected. But for profit for the quarter, because of the structural reform that we are working on, or the increases in tax expenses, this has caused us to register a profit for the quarter below the level last fiscal year. So for the result for the first quarter, as I have explained, for the international business, there was a DPI issue which has caused the profit to come down, and this is reflected in a gross profit ratio, and the core earnings ratio has deteriorated by 0.9 percentage points year-on-year. LWT, for Japan and international business, slight increases, but international business is still on the way for recovery, as I've explained before. LHT, as I explained before, the sales for new houses, that has been made up for by renovation, but we are starting to see these results generated gradually. As for the interest-bearing debt, due to impact from Forex, there was an increase, but it is not a significant change. Last but not least is the cash flow, which I mentioned a little bit earlier. Cash flow continues to be good. So JPY 14.6 billion for a free cash flow, and compared to last year, there was improvement by JPY 50.2 billion. Going forward, when the U.S. and European market demand recovers in full scale, we need to increase our inventory because our inventory level is relatively low at the moment. So that is the brief overview of our business, and we would like to take your questions now. Thank you very much. We would like to now take questions. We ask you to input your questions in the Q&A box at the bottom of the screen. Please put your name, your affiliations, as well as your question. So, sorry. In regards to DPI, we have to read out the question first. I apologize. So we'd like to introduce the first question, and the first question is from Fukushima-san from Nomura Securities, and there are two questions, but we'd like to go one by one. And the first question, I understand that there were additional inventory write-downs associated with DPI, but how much was this actually? And what's the current level of inventory, and what is the outlook for DPI going forward? So Seto, over to you. In regards to DPI, there is a loss above and below the core earnings, and above about $6 million, which is about JPY 900 million. And we have dealt with this completely, and so we're not going to register additional losses for DPI going forward. We would like to go to the second question of Fukushima-san. You are conducting structural reform in the international market in the Americas, Europe. Could you refer to how the status is currently? What was the structural reform cost for the first quarter? After the second quarter, how much will you be spending for structural reform? When will we be seeing a positive impact from the structural reform, and in terms of the value, how much would the positive impact be? And also, in the fiscal year ending March 2026, the structural reform cost would remain. Has that remained unchanged? So there are several hundreds of millions of yen for the first quarter. In the second quarter, we are considering some costs to be incurred, and in the case of structural reform, it is very difficult for us to talk about the future. As an example, for factories or in the sales offices, or for the talent who are working in the sales office, we would not be able to talk about the future in terms of the structural reform for those matters because of the legal issues. From the second quarter on, we believe that the positive impact will be seen, and from the third quarter, there would be even more impact in the positive. There will be some things remaining to be done for the structural reform in the fiscal year ending March 2026, but we will be doing whatever we can this fiscal year. Of course, there are some counterparties that we need to negotiate with. Sometimes the government is involved, so we would not be able to necessarily finish everything by the end of this fiscal year, but that's our goal. Next is from Fukuhara-san from Jefferies. Two questions. The first question. So how much was the DPI inventory write-down, and what was its nature? Was it limited to the first quarter, or was it included in the plan at the start of the fiscal year? From the second quarter onwards, can we expect the U.S. business to register profit and additional personnel measures? Does that mean the additional JPY 10 billion that you have registered in the previous plan regarding the structural reform cost? Well, in terms of the write-down, we are somewhat embarrassed by this in March. So DPI had this level of inventory, this amount of write-down. We did that kind of evaluation at that point in time, but when we were to sell, we were unable to sell. That was the fact. So it should have been something that we could have registered in the previous quarter, but unfortunately, when it came time to sell, the market was weaker than what we had expected, or the DPI's inventory was not evaluated at the level that we had expected. So that led to this write-down. From the second quarter onwards, we are working to register profit. And from the third quarter, we're quite sure that we can register profit. But in the second quarter, we are implementing various initiatives, and so we don't expect anything special like the DPI, but in that regard, we are seeing a gradual improvement. And from our perspective, we feel that we are okay for the second quarter. And the JPY 10 billion additional, this is quite a rough number because we are doing various things at this moment. So, like Fukushima-san explained, for March 2026, to make that zero or not. Now, if we are able to do that, then we don't expect this to increase, but at this point in time, we have not changed this number of JPY 10 billion. The second question from Fukuhara-san. So you would be improving the cash flow, and how would you be conducting the shareholder returns? Is there any risk for decreasing the dividend? Would you be conducting the share buyback? Is there any possibilities? As a CEO, I would not be able to talk about the dividend because the determination of the dividend is being made by the board of directors, meaning it's not my place to say. And in terms of the dividend, we are not thinking about increasing or decreasing the dividend. And in terms of the share buyback, it is a one-time thing. In the event where we currently are not thinking about the share buyback unless it's something that unexpected happens. Next question is from Takegawa-san from Sumitomo Mitsui Trust Asset Management. Two questions. The first question is, Mr. Seto is considered to be one of a very strong manager of a company, but please explain as to why you are struggling to manage this company. I think it is because of you who has cut the losses to this level, but what are some of the unexpected things that are continuing? External factors are likely to change going forward, and it's difficult to see the profit level at business-as-usual level. So what level of profit are you to achieve by when? Well, I don't know whether I've been praised or whether I've been scolded, but I would like to express my appreciation for thinking of me highly. Now, the biggest factor for us right now is that the European profit that has continued to support us quite significantly is not contributing at the same level because of the housing market slowdown in Europe. So if the US and Europe go back to three years ago, the economic situation, we should be able to achieve JPY 80 billion-JPY 100 billion of profit, and 7.5% of the core earnings ratio could be achieved. And we should be able to get back to those levels within two years on the assumption that the markets return. And 10% further beyond, I think it's a little too early, too premature for us to talk about that now, but that is where we want to aim for in the end. Now, it's not that we didn't expect it, but earlier arrival of the new housing starts coming down all of a sudden. So it was somewhat unexpected that the new housing start in Japan dropped at this level. But I think against the level of population that the new housing starts in Japan were quite high, and what has supported this was the low housing for lower-income earners. And so we should have expected this, given the inflationary environment, that this will slow down. But it was as a result of not being able to assume or expect the situation as we should have. And the difficult situation for managing this company, well, there is nothing that I can refer to as a means of excuse, but if I'm to point to something, the business portfolio of this company is somewhat low in terms of profitability, and we are a company with many assets, many facilities. And if that is the case, then when the demand comes down, then when the utilization comes down, then the expenses and the fixed costs for those factories tend to cause, say, significant burdens. The challenge going forward is that, and on this occasion, we do expect recovery to come, but in the future as well, there could be some reasons that could cause demand to come down, but we have to still generate profit. And in that regard, we need to think of becoming more asset-light. And I apologize for causing worries, but from our perspective, we are confident of being able to return the level. Second question from Takegawa-san. Have you been able to nurture successors? Well, I think that we have been able to grow good talent. And so there are many talents who have been developed within the company who are now able to work in the international market, and I think that the successor of me should be coming from inside the company. Next question is from Mochizuki-s an from CLSA Securities. Two questions, and the first question is, the recent spot price, the copper alloy pricing is probably transitioning at a level that is above the company's plan based on yen-denominated pricing. When this increase in the copper alloy price will be reflected in the performance this year and next fiscal year? For spot six months out, it should really be reflected, but on the other hand, more recently, the volatility has been quite high. And so this type of copper alloy price increase in paying premiums for that or charging premiums, we now are able to charge premiums. And so just based on this reason, we're not expecting our performance to come down significantly as it was the case previously. The second question from Mochizuki-san. The core earnings ratio of GROHE has recovered to 5%. Has it gone above the corporate plan? Could you elaborate on the business environment, the revenue trend, as well as margin? So it is true that it was better than expected. For Europe, the demand has slightly recovered, especially in the area of shower. We have been able to regain the market share. There was mention about the copper. So when the copper prices went up, we had increased the price for the shower. And for shower, it's almost all plastic, and because of that, we have been able to improve the market share because the customers did not follow suit. And the wholesalers are now buying, and I think that people are more optimistic about this market. As I have said, the new housing starts in Germany and France. It is still a pessimistic situation, but depending on the wholesalers, there are companies who feel that the market will be improving. And I think that we see positive signs, but we have not gotten to the level of recovery which we want. Next question is from Kawashima-san from SMBC Nikko Securities. It seems that the pace for applying for subsidies for the window renovation business is somewhat slow, 22% as of July 30. Is that because the demand has started to settle down, or can we see further improvement towards the end of the year based on effort to capture additional demand? How are you reading the market right now? Well, the situation that you have referred to is what we are seeing. In fact, last year, the subsidy, when it was introduced, then the market kind of rumored that the subsidy could be used up immediately with a very large number of orders, and that could have potentially led to a long delivery timing. But this year, the start has been somewhat slow, in fact, quite slow. In that regard, 22% as of 30th of July is slower than what we had expected. That is a fact. But if we look at the situation for us alone, 135% year-on-year increase of 135, so JPY 100 million becoming JPY 135 million. So that's the kind of level we are seeing for us right now. But our competitors in comparison to last year are showing less than 100% in some instances based on what we have heard. And so in that regard, for Japan overall, we have this 22%, but we want to capture this type of opportunity more, and this is what we are thinking. And as for large change, in fact, there are three different large changes. First is that because of the extreme heat in summer this year, the air conditioner demand increases, and so there is an increase in window renovation demand associated with that. The second is the increase in energy cost. So there are people who purchase the window for renovation in that mind and for winter. Last year, the subsidy almost ran up, but for winter demand period, we may be able to achieve growth because of the current consumption rate of the subsidy. It's something that could be different this year vis-à-vis last year. The difference for this year from last year is that we can now use the subsidy for doors, but it's partially due to lack of effort. Based on our investigation, the consumers, the renovation for the window, the majority of people still don't know about this program, the fact that one can renovate the window, and there is the subsidy provided. In fact, less than 30% of people are aware of this type of program. And so we need to make the effort to have these people know about this type of program, which should cultivate some demand. So corporate effort is required or the effort as the industry may be lacking in that regard. Next is a question from Yagi-san from Morgan Stanley MUFG Securities. The first question. The core earnings for LWT International Business is expected to significantly recover. The international LWT's core earnings for first quarter wasn't as expected. I think the situation is different for ASB and GROHE, but could you elaborate? As for the core earnings for LWT overseas, we had set it up so expecting that the demand will not increase. The first quarter core earnings is as we had expected, but the U.S. had been worse than we had expected. And on the other hand, in Near East and Europe, it was better than we had expected. So as a result of that, it had resulted in the performance as we had expected. And when the U.S. returns to normal after all of the issues of DPI had been resolved, I think it would do better. The second question. I think you have described that there is a recovery towards the sales or to the distribution with the expected rates coming down for Europe in the first quarter. But can we see a sustaining the trend of sales recovery right now? And what are some of the factors for you to expand the market? Please explain about the demand focus for Europe. Well, when we look at the housing starts, the focus in the market, they are not really showing a recovery trend. But for us, as for orders, well, we are just hardly keeping up with the manufacturing for some products against the orders received. So I'm not saying that this is a situation overall, but we are starting to see products that are selling better. And that is a situation quite different from last year. But on the other hand, and this is just a slight information, but the housing competitor, they are, I think, adopting a view that there will be a pickup towards the second half of the year. So what's happening with us should also occur to others. So some companies are starting to take on more aggressive views. But numbers shown as statistics and based on the interest rate, we are not seeing the notable pickup, but we are seeing increase in orders. And the interest rate change could be quite significant. The next question is from Mr. Okada from Goldman Sachs. There were two questions. The first question, the LWT business in the domestic business had increased in revenue, but the core earnings ratio had come down. What is the background for that, and what is your prospect for the future? There are some temporary issues. The appraisal for the past inventory, impact from that was coming, has seen in the impact on a later date. And also there was impact from inflation. And in LWT and LHT, there are some differences. For the water-related products, I mean, the showrooms, there are a lot of quotes which have been requested. So for LWT, we believe that the core earnings ratio will be going up. And when there are new products launched, the revenue and the profit tend to go up. When the new products are launched, the situation will be better. Generally speaking, our products for the construction materials as well as the interior products, the earnings ratio tend to go lower as they age. We need to launch new products in order to maintain the profitability. I think that with the launch of new products, it will improve. The second question. It seems that the original sales growth rate of an LWT business overseas seemed to be somewhat weak against the company plan. Can we see a recovery in the second half of the year? Well, the company plan was weak growth to start with. And so it's not the case that we are significantly behind against the company plan. But regionally speaking, the U.S. is not as strong as we had expected in China, but as for Europe and the Middle East, the situation is better than what we have expected, as I explained previously. And so there, we expect to be able to make up in the second half of the year to an extent. The next question is an additional question from Fukuhara-san from Jefferies. LHT business revenue for first quarter was JPY 137.1 billion. How do you see internally, season-wise, the revenue is expected to increase? But how do you think about the accuracy of the achievement of JPY 595.5 billion plan for the full year? So how is it compared to the previous year? So the first quarter, JPY 137.1 billion, it was lower than we had expected. The new housing starts had been lower than what had been expected in the market. On the other hand, as for the renovation, there was a recovery from April compared to the period of transition from the change in the program. So we believe that there would be further improvements in that area. How do we see the future? We would like to work on the improvement in getting the orders, which involves the usage of the subsidies for renovation. Also, the exterior and sash shares are increasing. So we believe that we can achieve the annual plan. So there are various plans and projects going on, and I think that the international market will grow further. We have responded to all of the questions that we have received thus far, but we still have some time. So we would like to welcome further questions from the participants. If you have a question, please click on the Q&A button and enter your name, the company that you're representing, as well as your question, and please press the send button. We are currently waiting for new questions to come in. If you could bear with us for a few more seconds, please. We still have some time left, and so we will be able to respond to additional questions from participants. Oh, we have received an additional question. And the question is from Fukuhara-san from Jefferies. What are you thinking of in terms of the balance between first and second half of the year in terms of profit? Well, I think this is something that we have explained previously. It hasn't changed very much. The second quarter, second quarter, and the fourth quarter slide. But this type of breakdown has not changed very much. About a third, slightly less than a third in the first half of the year, and slightly more than two-thirds in the second half of the year, and particularly October to December is going to be the key. But many things have happened, but we are taking somewhat of a conservative view. We have been able to respond to all of the questions which have come up to this point. There is an additional question from SMBC Nikko Securities, Kawashima-s an's question. The price optimization impact has been able to cover the impact from the raw material, but if you consider the addition in the costs for others, wouldn't you need further price optimization? We are considering that. What was worse than we had expected related to the aluminum procurement was the Forex. We were able to make progress in hedging, but related to copper, we are seeing a flat price decline, but there is a possibility of a price hike there. So we have to think about the response should that happen. Overall, the zinc plastic usage is what we would like to increase in terms of the product rather than using brass. So we will be considering various options. But we are considering further price optimization. Next question is from Ito-s an of Japan Value Investors. So even if we do not see a full-on recovery of new housing starts in Japan and international market, can we expect to see increasing sales and profit over a medium term centered around renovation demand? Domestic, the new housing starts, we're not expecting recovery and going down going forward. So for domestic business going forward, we need to really respond to the renovation business. And we want to achieve increasing sales and profit for the Japanese business by focusing on that area. That general course of the region has not changed. And the last two years, that's for a significant decline in the new housing starts. But we have been able to respond to that to an extent based on the Japanese business. And so the new housing starts. So there was a rapid increase in the materials for new housing. So younger, the first time, the income earners, their demand has essentially disappeared. Would that become a pent-up demand, or would they go to the used house market renovating use? So in some way, there will be implications of that. And so the new housing demand, the decrease will be more gradual. But if we're able to improve the renovation, not maybe an immediate basis, but we should be able to achieve increasing sales and the profit over a medium term. But for international market, new housing will return because there is an increase in population and there is more income. And right now, because of the high interest rate, people are not investing in housing, but rather they are buying something else. That's where the demand is going. But housing is something that is required over a long term. So not seeing a full recovery is not possible in my view. The next question is an additional question from Okada-san from Goldman Sachs. In the European market, after the pandemic, there are some situations where the competitors have gone bankrupt and the players seem to have decreased. How is the competitive environment? So there are high-end players who have gone bankrupt and also Ideal Standard, who had been struggling for a long time. So they have not gotten much share. So there's not much difference in the environment for competition. So for water, faucets, Hansgrohe is the biggest competitor, and the others are all small players. And outside of Geberit for flushing systems, we don't see many competitors. So sanitary ware is where there are a lot of competitors. We have not established a positioning in the sanitary ware. So in terms of the situation, not much has changed. In any case, in Europe, the competitive environment does not lead to any change in the prices, like price decline. So the competitive environment is impacting more in prices in the U.S. market. Next question is from Teraoka-san of Daiwa Securities. Can you explain in more detail the reason as to why your market share is increasing for shower in Europe? Well, we are regaining back where we had kind of failed in terms of pricing strategy. So copper price went up, and the shower price also went up at the same time. But others did not follow. And so we are making corrections to that situation. That's the first point. And recently for showers, for us, we have been able to launch many popular products. So Tempesta will be one good example. But these new products have become quite popular. And on a global basis, there are many changes, but the demand for shower itself is probably the strongest. We responded to all of the questions that have come up to this point. We still have some time left. We hope that you would be able to ask questions. Please click on the Q&A button. Please put your name, your affiliation, as well as your question, and press on the send button. It seems that all of the questions have already arrived. So we would like to conclude the Q&A session now. With this, we would like to conclude the briefing for the first quarter briefing for fiscal year ending March 2025. We ask for your support for the.