It is time for us to start the briefing of financial results for the fiscal year ended March 31, 2025, of LIXIL Corporation. This briefing is streamed live online. Thank you for being here today. First, I would like to present to you the presenters for this afternoon: Director, Representative Executive Officer, President, and CEO Kinya Seto. Next, Executive Officer, EVP in charge of Finance, Treasury, IR, and CFO Mariko Fujita. Senior Vice President, Leader of the Investors Office, Aya Kawai. I will be serving as the emcee from IR Office. My name is Seto Guji. The materials for this briefing have been uploaded on our website in the Investors page. I would like to explain about the proceedings for today. First, Fujita, the CFO, will be giving you the financial results for the fiscal year ended March 31st, 2025, as well as the forecast for the fiscal year ended March 31st, 2026. Medium-term direction will be explained by Mr. Seto, and that will be followed by Q&A. In terms of the Q&A, we will be using the Zoom video and audio functions, and you will be asking the questions directly, and we will be giving you the directions for how to use them. We will be concluding at 6:00 P.M. Ms. Fujita will be giving you the overview of the financial results for fiscal year ended March 2025, as well as the forecast for fiscal year ending March 31st, 2026. Ms. Fujita, please. My name is Fujita, and I would like to give you the highlights of the financial results for the fiscal year ended March 31st, 2025, as well as the forecast for fiscal year March 2026. This is the first highlight. Revenue and profit increased year-on-year for the fourth quarter, as well as for the full year, and the free cash flow has improved as well. As for the results for Q4, in the Japan business, there were new housing starts, which continued to be hovering low, but due to an increase in the renovation business, it had improved. For LWT International business, we had seen improvement in Europe, as well as growth in the Middle East and India. The ongoing international structural reforms included the completion of the transfer of the U.S. bathing business and the closure of a plant in Thailand. As for the full year in fiscal year ending March 2025, in line with what has happened in Q4, free cash flow had improved by JPY 53.8 billion year-on-year. The second highlight for today: full- year forecast for fiscal year ending March 2026. We are forecasting the revenue of JPY 1.540 trillion, core earnings of JPY 35 billion, and profit attributable to the owners of the parent of JPY 8 billion. We are forecasting an annual dividend of JPY 90 per share. Business environment and outlook for international business: there are impacts from tariff policies of the U.S. administration, but we are currently assuming a neutral impact. In terms of the new housing starts in Japan, we expect it will continue to be weak for sales in Japan. We expect that the renovation business is expected to remain strong, and some structural reforms will continue to happen into fiscal year ending March 2026. I talked a little bit about the structural reforms, and I would like to continue to talk about the progress of structural reforms. In FY 2025, we have been able to see almost all of the completion of the structural reform in international business. In the U.S., we have transferred part of the bathing business to American Bath Group, and we have concluded a strategic partnership agreement. We have concluded a transition service agreement, so we will be managing production facilities and operating the bathing business for a certain period under that agreement. We aim to significantly strengthen the brand recognition and competitiveness, and we will expand sales and achieve growth through the joint collaboration. As for Thailand, we decided to close the Rayong plant in Thailand. As a result of that, there was a consolidation of sanitary production in Thailand from two plants to one. For FY 2026, we do not foresee significant costs for structural reforms. However, for the unprofitable businesses, we will plan to implement further streamlining. This is the last of the highlights for today: the core earnings review of fiscal year ending 2025 and outlook for fiscal year ending in March 2026. For FY 2026, the core earnings result for fiscal year 2025 was JPY 31.3 billion, and we expect it to grow to JPY 35 billion for fiscal year ending March 2026. Aluminum, the component costs, will continue to rise. However, we expect to offset by price optimization, as well as higher renovation sales. In the international business in Europe and the Middle East, we expect the core earnings to increase due to sales increase in those areas. Next is the fiscal year ending March 2025 performance highlights. Revenue was JPY 1,504.7 billion. It was up JPY 21.5 billion year-on-year. As for core earnings, it was JPY 31.3 billion. It was up JPY 8.2 billion year-on-year. EBITDA was JPY 114.5 billion, up JPY 10 billion year-on-year. The profit was JPY 2 billion. It was up JPY 15.9 billion year-on-year. In the full year, there was an increase in the tax expenses, but due to increasing core earnings and a decrease in structural reform costs, we were able to improve the profit by JPY 15.9 billion year-on-year, as I have mentioned. This page explains the fiscal year ending March 2025 consolidated business results. Key points are as follows. As for the gross profit, it was up 1.2 percentage points. As for SG&A, there were impacts from Forex. There was a deterioration of 0.7 percentage points, but for the core earnings ratio, it was an improvement of 0.5 percentage points. Next will be FY 2025 business results by segment. As for LWT, Japan and international businesses, both have an increased revenue in core earnings. As for LHT, there was an increased sales window of renovations. However, it was offset by the drop in sales of new housings. Next is the consolidated financial position. Mainly, there was a completion of the U.S. bathing business transfer, and the equity decreased mainly due to so in the U.S. Net debt EBITDA improved by 0.6 year-on-year to 4.7x, and the equity ratio is 33.7%. Cash flow status and cash balance. As for the free cash flow, it increased by JPY 53.8 billion from the same period last year. This is due to the improvement of the year-on-year improvements in working capital, and the operating cash flow has remained positive and improved. With this, I have explained the last fiscal year's financial results and the outlook for the next fiscal year. Thank you. Next, from Seto, he will be explaining the medium to long-term direction. Mr. Seto, please go ahead. Hello, everyone. From this fiscal year, I want to talk about the direction for the next three years. Having said that, in the fall of 2021, we have come about with the LIXIL Playbook. At that time, I have shared with you the direction for the medium term. Long term, we aim for the core earnings margin of 10%, and as a medium-term target, we have shared a number of core earnings margins of 7.5%. The base of this plan, in a very summarized way, was the portfolio strategy. Within the portfolio, international business was making more profit than Japan, and Japan had the lowest margin but had 67% of the sales. On the other hand, the international business, the high- profitability businesses, for example, fitting and faucets, had a high margin, but for the bathing business, the margin was low. We wanted to pivot our focus onto the higher profitability businesses and have that at the base of the further growth. There was a profit imbalance in the regions of the international business, and products-wise, there was an imbalance. The low-margin ceramics or bathing products, they had the higher sales. We wanted to improve that balance. From the overall business perspective, we wanted to conduct a differentiation. We have to come up, we wanted to come up with an innovation plan to differentiate ourselves. Also, we wanted to have the product innovation as one of the pillars. The result is that for the last three years, we were not able to achieve that result. There were faults on us. However, the important environmental factor is Europe, where we are depending on the most, as also in the U.S. After the inflation occurred, the interest rates increased, and the demand towards housing went down. It was actually an unfavorable situation for us in terms of housing. Also in the U.S., to begin with, ourselves, we had many assets. We were an asset-heavy company. The break-even point was set at a high level. When the volume goes down, it directly hits us, and the U.S. business became a loss-making business. Also, for the Japan business, of course, new housing starts going down. We knew about that, and we knew that we had to shift over to renovation business. The impact of the hike of the interest rate in Japan, the new housing starts, was kind of dependent on the younger generation's income level. Due to the inflations, the younger generations were not able to afford new housing. As a result, the new housing starts has rapidly declined. Also, we wanted to build up a global supply chain, and we had more of a global supply chain compared to competitors. Due to geopolitical reasons, due to that, it became unfavorable for us due to the Russian invasion of Ukraine. Our supply chain flow in certain areas of Europe was cut off. What we've learned with these experiences is that, as written here, when the company LIXIL was established, we bought too many companies and became asset-heavy. As a result of that, the profitability was not generated, or the revenue was not generated that matched the asset size. We were working on divesting the non-core business to improve the situation. What we have learned in the last three years where the business was not doing so well, there were some unprofitable businesses within the core business also. We needed to improve that situation. Furthermore, what we were doing is that in terms of innovation, adapting to the environment and the society, we feel that we're able to differentiate our products in that way. When we were in a tough situation, we progressed quite a bit in the streamlining of the business. We are also making improvements by utilizing more IT or AI type of technology. Therefore, next page, please. We wrote the medium-term roadmap as this. Roughly speaking, 2026 March term. For this fiscal year, objectively, the environment surrounding us is no different than last year. There are still difficult situations. We are not expecting that much of a growth. However, next fiscal year, 2027 March, excuse me, next year, we will be able to bring it back to the level of March 2022 term. If we are able to do that, March 2028 term, it is a 2.3%. Against that, we can add 4.3% and achieve 6.6% or 6.7% of core earnings margin is our expectation. This part, to achieve this, the key is to change the portfolio content. I'll explain about that later. On the other hand, next page, please. When we look at the business overall, there is another issue that we need to focus on. We are generating the cash. Also, EBITDA is high, but the core earnings is only JPY 35 billion, and this is not something that we can be satisfied with. The net profit is even lower than that. It is because of the asset inefficiency that is the issue that we have. We are generating cash, but there is a lot of depreciation associated with our business. It's not just about equipment, but also the intangible assets. It all comes down to the JPY 35 billion in the end. The U.S. and the U.S. business, which had been partially transferred, as well as the selling of the Thailand plant. We have been working on to improve that situation, and we have not been able to recognize the tax-affected accounting. Even though cash is actually decreasing, we need to think about the improvement of the net profit. In order to do so, we have to think about making our assets more efficient. In changing the portfolio, we need to think about the priority of how we would change it. The first two are in the international business in terms of the priority focus areas. The U.S. was in the red ink, and because of that, we were not able to recognize the tax-affected accounting. We want to change that situation. We want to turn around the U.S. business. U.S. business is as important as Europe, and we believe that this market will also be growing. There are unprofitable products. The bathtub was the most unprofitable. It's very difficult to differentiate, and at the same time, the distribution cost was high. We had the plant in Cleveland and another plant in Mexico. ABG and Kohler had a lot of plants compared to us. We were in an inferior situation, but we were able to negotiate with ABG. As Fujita-san has mentioned, they have agreed to partner with us. American Standard brand will be sold with the cooperation of LIXIL and ABG. ABG will be selling the faucet and the other water-related products and sell ABG's bathtub. We will be making that mutual effort. We have transitioned a service agreement, and for a year, they will hold the asset, and we will conduct the operation. The cost reduction impact will be seen in fiscal year ending March 2027. Another is that the second unprofitable business is the ceramic business. We have been thinking about how we would be able to turn around the ceramic business. We have the upper class to mass, and under the mass product, there is opening price points. Mass market and the opening price point is the biggest market. There, the private brand coming from China had been faring very strongly in this area. Because of the Trump administration policies, the products from China cannot get into the U.S. market as easily. The private brand, especially from China, it would be very difficult to enter in the U.S. market. It is possible that our profitability will be improved. When there are cheaper products in the opening price points, it will be bringing down the upper market price down as well. We want to capitalize on the situation where the Chinese products would not be coming in so easily. It is like a pie in the sky for us. In the U.S., we now have the opportunity for turnaround. The second is the European market. We want to grow the GROHE brand. Europe's market is not fully improved yet. In terms of the financial easing bill that had been passed in Germany, that impact will be seen only about a year later. In Europe, we have been able to launch their innovative products. We will see improvements there. In the case of the domestic business, even though the new housing starts is declining, we are working more on the renovation business. We need to improve the productivity of the renovation business. We will be using the digital technology in order to realize that. The digital solution will probably be launched sometime this year. We believe that the fruitful results will be derived from the next fiscal year on. Last year, we launched a lot of new products and that worked well. Also, LHT has an opportunity in the heat insulation products. We have been creating a business which would be able to provide for the kitchen and the living room together. Another is differentiation in the sustainable products. We would like to accelerate the launch of the sustainable products that would differentiate us from the competitors. In LHT, centering around India as well as other Asian countries, we have been growing. We would like to focus there. I may be repeating myself, but what we will be doing is as follows. As for the gross profit, we will be increasing Europe, and we will be turning around the U.S. business. We would like to improve and increase the value-added products. Going on to the next page, it is related to what I have mentioned. As of fiscal year ending March 2022, we thought that the international business in LWT, we believe, would be increasing. This pie here is the amount of the sales for the businesses. We thought the core earnings will be increased. In Europe and U.S., there was economic downturn. If you look at the fiscal year that just ended, there was a decline in the CE margin. As I have said earlier, we have a lot of facilities ourselves. In the case of the competitors, they are working with OEM. When the utilization of the plants comes down, the CE margin will be coming down immediately with it. Also, we have not been able to pass on the inflation. We have been able to increase the price in the products, but there were areas we were not able to cover with the increase in the prices. Towards fiscal year ending March 2028, how will we be changing? We would like to increase the international business up to the fiscal year ending March 2022 levels. If the Near East and India will increase, there will be a natural increase in the international business, and the CE margin improvement will come along with it. We have a very strong cost structure, and we are now able to launch good products, and the utilization of our plants will be going up. We will be balancing our facilities so that we will be able to counter the economic downturn should it come in the future. Considering the assets that we have, we need to sort out what's inefficient, and we would like to clean it up. There are a lot of variable factors. With the Trump administration in place, there are so many new things happening. We did not have the visibility to what will happen in the midterm if we do not have the clear understanding of what the Trump administration's policies are. We are thinking that the policy of the U.S. administration would change. Ms. Fujita mentioned that we are looking at the impact neutrally because there are positives and negatives. Currently, the situation is not bad for us. The sanitary ware is the biggest contribution for ourselves, and we are manufacturing in Mexico. Because of the USMCA, we would be able to bring it without the tariffs, which is good. If the tariff policies are all put in place, there is a possibility of inflation, interest rate going up, and the housing business may be negatively impacted. We will see. In terms of the European economy, it is recovering. The interest rate is coming down in the European region, and the positive impact of that will be materialized sometime next year. I think that there will be expectation for pent-up demand. There are a lot of unclarity as to what will happen to interest rates overall. Globally, we believe that it will be coming down, especially in Europe. We are seeing the coming down of the interest rates in Europe at 0.25% each time. We don't know what will happen in the U.S., but I think that it will be very difficult for the U.S. to increase the interest rate considering the economy. I believe that there may be a possibility of increase of maximum of 0.5% in interest rate in Japan, but I don't think it would be a drastic change. In terms of the heat insulation subsidy, it's now in its third year. Overall, the low carbon society goal would not change. By 2050, the Japanese government is trying to reduce 50% of the CO2 emission. The building sector is contributing 37% of the CO2 emissions, and 50%-55% is coming from the doors and windows. For the heat insulation, I believe that in the mid to long term, there would be a continuation of the subsidy, and it may be impacting significantly to our business. With regards to AI, we are working on various initiatives. I do not want to elaborate too much here. I think by the end of this year, all of our sales force would be able to utilize the AI. We want to expand sales of new products with social and environmental impact. We want to create something good globally, and we want the customers to recognize us as that we do something good for the society. These are the risks and opportunities. I think I can take that during the questions because it is the repetition of what I have already said. In terms of the expansion of the sales of the new products, we are working on this steadily. As for capital allocation, gradually we will have a retained that will gradually improve, and we will have to create a situation where we will have a surplus. The EBITDA level in the industry, we have reached a level that we should not be embarrassed at all. We would like to further increase that in the medium to long-term perspective. Sorry, I rushed through it, and I spoke quickly or very fast, but now I would like to take your questions. Thank you very much. From now, we would like to move on to the Q&A session. This will be repeating what we have said at the start, but when you ask your questions, please ask your questions directly using the audio and the video function of the Zoom. When you'd like to ask a question, please click the raise your hand icon at the bottom of the screen. The MC will be calling upon you in order. Once you're appointed, you will see a confirmation screen. Please click where it says you will be participating at the panel list at the bottom of the screen. Lastly, please turn on the audio button. If you turn on the video button, your video will be shown, so please choose to turn it on or not. We would like to have as many questions asked as possible, so we would like to limit your questions to two each time you have the opportunity to ask. You will be able to repeat to register that you have a question again after you ask the first question, so please do so. If you mistakenly press the raise your hand button, you can actually turn it off by clicking the icon again, so please do so. First, Fukuhara-san from Jefferies Securities, please ask your question. Please select the audio and excuse me, turn on the audio, and if you like, turn on your video. My name is Fukuhara from Jefferies Securities. Thank you very much for today. I have two questions. The first is a short-term question, and the second is the long-term question. As for the first question, page four in your presentation material, and we are seeing the profit increase and decrease factors here. For the Japanese business, the raw material price impact, at the note, it says that there was an impact from the foreign exchange. Regarding this, I believe the assumption was JPY 155 to a dollar, and currently, it is around JPY 140. Therefore, when the foreign exchange rate fluctuates, what kind of changes or impact will it have on the profit? Furthermore, for the international business, the sales, I believe that this year it's going to increase by JPY 20 billion and towards that, a JPY 30 billion increase in revenue, you're expecting a JPY 3.7 billion in profit increase. How this JPY 3.7 billion increase in profit is built up is what I would like to know. That is my first question. I will explain from the foreign exchange impact first. As you have pointed out regarding the FX impact, when we purchase the raw materials, there's a part that the FX will directly impact the cost. That's a transaction impact. The overseas revenue will impact it. We call it the translation impact. As for the transaction impact, as basically you have mentioned, if the yen is appreciated, then the importing price will be lower, so it would be favorable for us. Currently, we have many that we purchase based on dollars, but also we have the yuan, Thai baht, and Vietnam dong, and U.S. dollars. Those are the currencies. We have some euro, but the four I mentioned are the representative currencies. For them, they're weak against the yen, meaning the yen is appreciated. For us, for the transaction impact, it is favorable for us. It just happens to be for copper and aluminum. It seems that it may go towards the weakening direction. There is the U.S. tariff policy. When we're considering that, aluminum and copper will be weakening. For transaction, the commodity price and FX, we believe that there will be a favorable impact on us. On the other hand, we have four FX rates, so we have not fully calculated how much in detail. However, on the other hand, with the translation impact, basically, it only has a meaning where it is the area that's generating profit. In that sense, Europe will have the largest impact. It will be the movement of euro. It is not linked to dollars this time. Euro is fluctuating around JPY 160, so it's close to our assumption that is the current situation. On the other hand, for the currencies other than euro, of course, we have dollars and we have yuan as well. However, for this part, for the U.S., two of the businesses are in the red. More than contributing to the profit in the foreign exchange from the foreign exchange perspective, there is not a benefit for us. For the latter part of your question, the international revenue is increasing and the core earnings is increasing by JPY 3.4 billion is your question. On page three, we have organized the structural reform, and this year, the impact is about JPY 1 billion. We are not seeing a positive impact as much as last fiscal year. That JPY 1 billion is included, but the remaining basically is related to the increase of the revenue and sales. I think that is the way that I would like you to understand this. Is that all right? Thank you very much. I just want to confirm. If that is the case, the sensitivity against just the dollar, do you have that? We are hedging our currencies. Depending on the hedge situation, there may be a slight difference. Recently, if there is a JPY 1 depreciation, there is about a JPY 100 million sensitivity. For appreciation, it will be positive. Excuse me. JPY 1 appreciation, yes. It is a positive impact. Thank you very much. My second question is related to page 15, especially for the international business margin. Currently, it's a several percentage, and in FY 2027, you're aiming to become 10%. This is just a rough calculation, but it seems that in the next three years, you'll have to increase your profit level by several JPY 10 billion. There's an explanation sentence at the bottom. However, specifically speaking, how are you going to increase the profitability and the margin three times than what it is now? March of 2022 is a number I'd like you to look at. At that point, it's 9.7%. On page 15, the core earnings margin from the far left, it was 9.7%. It became 3.4%, and it's going back to 10%. That is the plan. Why did it drop to 3.4% from 9.7%? The main factor is that the European business became extremely small due to the economic recession. The margin went down, and the plant's costs have increased. As we have said, for faucet products, the OEM percentage is low. When the volume goes down, basically, the facility utilization decline impact hits directly. At that time, the U.S. was in making profit. This is more serious. For the sanitary products and ceramics, the manufacturing plant costs directly impacted, and the margin was low. If it is the 2022 March volume, it was in the black ink, but when it is the volume of 2025 March term, it will be in the reds. The volume itself had the negative impact. Looking at the situation right now for Europe, we believe that we can be quite bullish. Reason being, last year, we were able to increase the market share as well as the sales volume. However, for 2027 onwards, as a result of the interest rate going down, we believe that there will be a pent-up demand that will be coming back. Also, for the U.S., we have divested the bathing business, meaning that we have divested the lowest profitability business. Therefore, we believe that the U.S. business is going to turn around, and we have been conducting structural reforms in the U.S., so we're probably going to see the effect of that as well. The first impact of the volume is going to occur. For the March 2022 term and March 2028, in terms of volume, it will be closer to March 2022. During this time period, we have conducted structural reforms, and we are now able to launch new products. In terms of the core earnings, we believe that it can be improved more. LWT, when it had a high core earnings, Europe, Middle East, and India's percentage, when it becomes larger, then the core earnings becomes better as well. China, in terms of percentage-wise, was large, but in terms of volume, it is declining. For China and Asia, we do not think that it is going to be remarkably improving. That is why we are looking at it like this. Okay, understood. Thank you very much, Fukuhara-san. Thank you very much. 様からご質問を。 We are getting a lot of hands raised. We would like to ask you to ask one question per person in order to get to all of the questions. The next question is from SMBC Nikko Securities, Kawashima-san. Please ask your question. Please put your audio on, and if you would like, put the video on as well. This is Kawashima from SMBC Nikko Securities. Thank you very much for your presentation, and I would like to ask my question. The domestic business, the restructuring of the industry in Japan. I think that you have been sorting out the plants in Japan. In bathroom and kitchen, there are many competitors still. Norin had withdrawn from the market, but there are many manufacturers. Maybe the manufacturers could be consolidated more in the industry. As a leader, maybe you would be able to play a role in the consolidation of the market. What is your take on that? Frankly speaking, there has been some inquiries about that to us, and there are companies which we would be able to acquire if we want to acquire, but we do not want to acquire at this moment. As Kawashima-san said, I think it may be possible that we may be working on some area of the work and letting the OEMs do the other work. I think that we need to do what we should be doing. We created the living business, so that is kitchen and the washing area and interior. We are able to provide the volume in a consolidated manner and in the kitchen. Through this initiative, we would be able to consolidate what we manufacture in the plants by having the similar products for those spaces. If we are to work on the consolidation in the industry, I think that someone needs to say that they would go fabless. We will prioritize what we can do first, and if there are opportunities, we will think about it next. At this point in time, I do not think that there are such kind of opportunities in the market. This means that there will be survivors and benefit in the end in the market. What needs to happen is that we need to differentiate first. We will sort out our business and become strong so that the competitors will give up. I should not say it. Sorry about that. We will first work on what we can do, but it is not just about how much energy that we have. We need to focus on the volume of our products. The kitchen and bathing system in Japan, it is not at the utmost volume, so we need to enhance your strength in those areas. Thank you very much, Kawashima-san. 次の質問。 I would like to take the next question, Morgan Stanley MUFG Securities, Yagi-san, please go ahead. If you see the confirmation screen, please click participating as a panelist. Next, turn on your audio, and for the video, it's optional. Yagi-san, please go ahead with your question. Thank you very much for your explanation. My name is Yagi from Morgan Stanley MUFG Securities. One question. The international business's core earnings way of thinking, I would like you to explain that once again. For American Standard, this fiscal year, can you expect a turnaround into the black ink? For the bathing business, you are going to be running the operations still, so is that going to increase the cost? Also, for March 2027, you believe for international, there is a JPY 30 billion increase in profit, and I believe the recovery or turnaround of the U.S. is included in that. For March 2026 and towards March 2027, there is quite a jump up. The way you look at the American Standard performance, if you can sort that out in terms of the order of time, it is going to be quite impacted by the policies from the Trump administration is how we look at it. However, as you have pointed out, even though we divest the bathing business, the cost that is related to that business, the cost and people, unless we are able to have an appropriate structural reform, then we will not be able to achieve a large cost reduction. For 2026 March, thinking of the Trump administration, we changed the pricing of ceramic towards the trade. We are aiming for putting in more of a high-end products. However, we cannot say that we removed risks by doing so. However, for us, this part is considered to be the priority, meaning that to improve the loss so that we will be able to lose the loss in March 2026. There were a lot of assets in this business, including distributing center, and there was a high-level inventory that are being divested as a business. We believe it's going to go towards a good direction. I will be repeating myself, but for America, there is quite a naming factor due to the Trump administration's policy. The market price itself going up, the possibility of that, many of them are playing from Asia and China. Therefore, U.S., if they go to a more conservative policy, depending on the situation, there's a possibility that the market can change into a high-margin market as we see in Europe. Furthermore, moving forward, how much of the trade business can we increase? GROHE product, how much we can focus on that included. There are many uncertainties. However, looking at the current situation, for us, for March 2027, we have quite a bright expectation for 2026 March. We would like to keep a close eye on the Trump administration's policy and implement measures where we can suppress the loss-making. I just want to confirm one thing. If there is no cost related to the bathing business, if the current business environment doesn't change, can you expect profit-making? Or even though the cost burden of the bathing business is gone, it's not gone. You can still look at turning into black ink due to structural reforms. Those structural costs will be people, products, facilities, equipment. The calculation is not simple. However, divesting the bathing business, and if we are able to clean it up, then with just that, we'll be able to turn into profit-making. Yagi-san, thank you very much. の質問です。 We will move on to the next question. Mizuho Securities, Nakagawa-san, please ask your question. When you see the confirmation screen, please click on participate as a panelist. Nakagawa-san, please ask your question. Thank you very much. I have one question about the U.S. business. On page 13 in the material, in number one and number two in the priority areas, GROHE brand in the U.S., how would you be rolling it out? I think that GROHE brand faucets were to be expanding in sales, but I was wondering how you were thinking about expanding the GROHE brand in the U.S. going forward. The U.S. product, our products in the U.S., where we would be able to differentiate and also profitable is the GROHE products. If we just look at the one to two years, we have to think about how we can sell the ceramic products because it's more impactful in terms of the profitability. How the Trump administration will move about in the coming few months will affect our policies. The GROHE faucets are brought from the European market, and as for the U.S. faucets, we manufacture in the Mexico plant for American Standard. Depending on the Trump administration policies, the contribution balance of American Standard and GROHE brand may change. Thank you very much for your question. Thank you very much for your response. Thank you for the question. の質問です。 I'd like to take the next question. Daiwa Securities, Teraoka-san, please go ahead. Please turn on your audio, and for video, it will be optional. Teraoka-san, please ask your question. This is Teraoka from Daiwa Securities. Thank you very much for your explanation. Once again, I wanted to sort out my thoughts regarding America, U.S., United States. American Standard, on page 39, $44 million read. It's about JPY 6.6 billion of loss in Japanese yen, and you're aiming to turn that around into black ink during this fiscal year. If so, then it will improve the profitability by large, including this part. Core earnings, JPY 35 billion, is the same as the plan number of the previous year. It seems that it could do a bit more. What do you think about that? From next fiscal year onwards, the positive effect of divesting the bathing business is going to become full scale. This is $1 billion. Next year, how much are you expecting? I would like to know that. Thank you. Currently, honestly speaking, for us to make this a forecast, we have struggled. The Trump administration policies, in a short term, for us in the U.S. market, there is a possibility that it will work positively. However, it may actually bring about the global economic recession as well. Therefore, the aggregation of the numbers that we can see at each business front is what is compiling this. Of course, honestly speaking, we wanted to keep an eye on the situation, how it would go, and then create a more solid budget. Having said that, the U.S. businesses for the quarter, excuse me, due to the cyber attack-related event, we lost about JPY 4 billion, JPY 14 million worth of revenue. There was loss-making. As overall, we have spent a lot of focus on divesting the bathing business. Now it is all sorted. Therefore, we are now ready to make more moves in the U.S. In the past, we have struggled. For the ceramic, for the United States, I did speak about the bright future. If there is no tariff, then it will work in a reverse manner. That is why we are looking at it in a neutral manner. I apologize that there are many areas that there is no clear answer yet. Whether these numbers here are conservative or not, it will all depend on how things will turn out from now onwards. As for the structural reform, we believe that quite a bit will be impacted by the Trump administration's policies, specifically speaking, within the assets that we hold. What are we going to do about that is something that we need to think of in specific terms. Therefore, it's difficult to come out with a precise number. We can provide what we assume. That part is not disclosed. We are still reviewing it right now, is how I would like you to understand it. For us, honestly speaking, the assumption for this part is difficult to make. However, I slightly touched upon it before. In Japan, there is one or two matters that we believe that we need to conduct the structural reform. For the overall picture, unless President Trump will cause a major recession, we believe that with what we're thinking right now, the majority will be done. Teraoka-san, thank you very much. 次の質問です。 We will go on to the next question from Goldman Sachs Securities. Okada-san, please ask your question. Please put your audio on, and if you would like, please put the video on as well. Okada-san, your question, please. From Goldman Sachs, my name is Okada. I have one question. On page 14 of the materials, it talks about 6.5% core earnings ratio in fiscal year ending March 2028. Out of the four items that you put here, the higher probability item and the market-dependent items, if you categorize it like that, how do you categorize it? A lot depends on the market environment, the top-line improvement, and the gross margin to realize that the recovery in Europe will be critical. If Europe recovers, we would be able to foresee improvement in our business. On the other hand, whether we would be able to continue the growth, we would need the value-added products. Top-line and gross margin, a lot of that depends on the recovery in the European market and turnaround of the U.S. business. The U.S. business turnaround would depend on the objective, a market environment, as well as the initiatives that we take for improvement for top-line and the gross margin. Up to March 28, we will be impacted by the extrinsic environment. In the long term, it depends on our effort. In terms of the SG&A, we need to depend on our own efforts. I may be making excuses, but the top-line and the gross margin, the reason why it had been bad in the past three years was because of the deteriorating situation in Europe and U.S. We need to, we want to see the improvement of that. Thank you very much, Okada-san, for your question. It is time, but we still have more questions coming in. We would like to respond to the questions that have already been raised. Next question, CLSA Securities. Mochizuki-san, please go ahead. Please turn on your audio. For the video, it is voluntary. Mochizuki-san, please go ahead. This is Mochizuki. Hello. As for the net profit, I would like to ask a question. This fiscal year guidance is JPY 8 billion. In last fiscal year, you were not able to achieve the target, and you had to revise downwards. Moving forward, the core earnings from next fiscal year onwards will be increasing. Does that mean that the net profit will increase as well? The U.S.A.'s profitability, if that is going to improve, then the tax rate will go down. The PBR is quite low. In the background, there is ROE, and you may be generating cash flow. However, from the shareholders' values perspective, PBR is quite an important KPI. How are you going to look at that? What is the trend that you are looking for the net profit? As you have mentioned, turning around the U.S. business into the black ink is the highest priority because this fiscal year it was making a loss as well. For Asia, it is slightly in the reds as well. Moving forward, economically, due to the U.S. impact, they are going to struggle. For us, closing the plant in Asia or Thailand was good for us, meaning that we had quite a good positive effect from divesting the bathing business as well as closing the plant in Thailand. We have closed the plant or factory in China last year. China deteriorating and Asia deteriorating by large moving forward. There's still risk of that occurring. However, from an overall perspective in Asia and U.S., the risk of tax, we are able to pick them up in a way. At least for FY 2027, it will be all cleaned up. For FY 2026, as you have pointed out, however, we will be able to make a full turnaround of the United States business. It will be kind of impacted by the surrounding factors as well. On the other hand, for Japan, it needs to steadily grow, of course. Therefore, whether we'll be able to follow this plan and it will go as planned, the assessment right now is that it's based on the plan that we have right now. We just have to steadily implement that. For the last three years, our track record was not good. Therefore, all I can say is that we are going to work on what we have planned. However, the net profit, the EBITDA, and the core earnings difference. The net profit and the PBR, the restructuring that is working as a core, and also the tax-related costs and their financial costs at the end. As for financial costs, basically, we have been working on divesting, and the financial burden, the financial cost burden, is declining. Of course, the content we have right now, we also think it is not the best, as you have pointed out, Mochizuki-san. We believe that we can make further improvements at that point. Thank you. Thank you very much, Mochizuki-san. 質問です。 The next question from Sumitomo Mitsui Trust Asset Management. Takegawa-san, your question, please. Please put your audio on, and if you would like, please put on your video. Takegawa-san. This is Takegawa. Can you hear me? Yes. Thank you for taking my question. I would like to ask about the outlook for next fiscal year on. In the meeting with the external directors, there has been a positive response about the disclosure of the forecast next fiscal year on, and I would like to appreciate that from happening. Going forward, I would like to benchmark the forecast that you have created with the actual results. I hope that you would be able to show us the progress, whether you have been going line with the plan, above the plan, or lower than the plan, maybe on a quarterly basis or half-year basis. I would appreciate it. Also, you have shown us today the medium-term directions. It's very close to the midterm plan. If we look at page 12, you have given us the image of how the company would look like in March of 2027. I think that you have given us the nuance of what we could expect. This is not a commitment. Is it a commitment, or is it just an image of where you want to be? How should I look at this number? March 2027 and 2028, in the case that you go in line with the plan, how should I consider the shareholder returns? The payout ratio was 91%, what, 9%? The year just ended, and you have put the 323% for the payout for the future. I was wondering whether the dividend will be JPY 100 or JPY 150 going forward, or if the level of payout is already high and you may be adjusting that. I would like to know your thoughts about it. As you have said, we have put the image of how the future years would look like, and I have said that it's a direction. The reason why we have used those terms is because there are so many uncertainties in front of us. We don't know how the Trump administration's policy would impact the global economy, and we wanted to wait and see how that would be materialized. As Okada-san has asked, in March of 2028, there would be a lot of impact from the external environment. Also, in the coming six months, we would be able to see how the Trump administration's policies would be impacting things like interest rates. I will be discussing amongst the directors of the board as well as the executive officers and disclose a more concrete medium-term plan when it is ready. Considering we will be creating it bottom-up, it will take six months to have visibility to what is happening, and it will take about a year to create plans like a midterm plan. We will do that when we can. In terms of the dividend, we will be looking at the EBITDA, and we will look at the cash that we generate and consider the investment that we need to make and also pay the expenses and decide how much we would be able to pay as dividend. We are not looking at the payout ratio. The second point is whether we will be increasing it. This will be a decision made by the board of directors meeting overall, so I would not be able to answer myself. I think that the answer will be somewhere in the middle after generating the cash. If we do not have any useful use of the cash, we will be providing the return to the shareholders as dividend. We need to make reasonable decisions as management, and it is still uncertain, so I would not be able to give you concrete answers. Thank you. I hope that you would be able to update us as you go. You would not be able to have clear visibility to three years from now, let alone what is happening this year. Please let us know what has changed, what will be improved as those issues come up. Thank you very much for your response. Thank you. We will be sincere in doing that. We will be responding to everything that we can. Thank you very much, Takegawa-san. ご質問いただいたご質問について。 Regarding the questions that we have received at this point, we have answered all those questions. With this, we would like to conclude the Q&A session. With this, we would like to finish the LIXIL Corporation financial results for the fiscal year ended March 31st briefing session. Thank you very much for today.