This is Horikoshi, CFO of the company. I will go through the highlights of the financial results for fiscal year 2023, which has just ended, as shown on page four. For FY2023, based on the exchange rates of 144.3 yen to the dollar, 156 yen to the euro, and 94.7 yen to the Australian dollar, the yen depreciation against all of the three currencies over the previous year levels were recorded. Net sales increased 9.1% year-on-year to JPY 3,865.1 billion, and the OP increased 23.7% to JPY 607.2 billion, with the income ratio up 1.9 percentage points to 15.7%. Sales and OP increased due to the positive impact of exchange rates and improved selling prices. Net income increased 20.5% to JPY 393.4 billion. Net sales, segment profits, operating income, operating margin, and net income all reached record highs. ROE was 14.4%, up 0.4 percentage points from the previous year. Dividend per share for FY2023 is projected at JPY 167, up from JPY 144 announced in October for a consolidated payout ratio of 40.1%. Page five shows sales and profits by segment. In construction, mining, and utility equipment, sales increased by 9.7% to JPY 3,615.2 billion. Segment profit increased by 29.4% to JPY 574 billion, and segment margin increased by 2.4 points to 15.9%. Retail finance revenue increased 20.9% year-over-year to JPY 103.5 billion, and segment profit declined 11.1% to JPY 24.2 billion. Sales of industrial machinery and others increased by 2.5% to JPY 195.6 billion, and segment profit decreased by 54.5% to JPY 10.3 billion. I will discuss detailed factor analysis by segment later in my presentation. Page six shows sales by region for the construction, mining, and utility equipment segment. Sales increased 9.3% year-over-year to JPY 3,591.4 billion. By region, sales increased in North America, Latin America, and Oceania, and decreased in CIS, Asia, and other regions. Page seven shows causes of difference in sales and segment profit of Construction, Mining, and Utility Equipment. Sales increased by JPY 318.6 billion year-on-year, mainly by the positive effects of foreign exchange rates and selling prices. Segment profit expanded by JPY 130.4 billion year-on-year, reflecting the positive effects of foreign exchange rates and selling prices, which absorbed decreased volume of sales and increased production and fixed costs. Segment profit ratio was 15.9%, up by 2.4 points year-on-year. Page eight shows Retail Finance. Assets and new contracts increased from the previous fiscal year end and from FY2022, respectively, mainly due to foreign exchange rates. Revenues increased by JPY 17.9 billion due to the positive effects of interest rate hikes and foreign exchange rates. Segment profit decreased by JPY 3 billion, mainly due to the absence of a gain on reversal of allowance for doubtful accounts recorded in the previous year. Page nine shows segment sales and profits of Industrial Machinery & Others. Sales increased by 2.5% year-on-year to JPY 195.6 billion. Segment profit decreased by 54.5% year-on-year to JPY 10.3 billion, and segment profit ratio decreased by 6.5 points year-on-year to 5.3%. Sales increased mainly due to the increased sales of large presses for automotive industry, but profit decreased mainly due to the decline in excimer laser maintenance revenues, which have high margins, affected by a globally declining demand for semiconductors. Page 10 shows consolidated balance sheet. Total assets increased by JPY 760.8 billion from the previous fiscal year end to JPY 5,636.7 billion, partly affected by depreciation of yen. Inventories increased by JPY 211.5 billion, mainly due to the depreciation of yen and increased demand for mining equipment and parts. Komatsu Limited shareholders' equity ratio was 53.8%, up 1.7 points, and net debt-to-equity ratio was 0.26. From page 11, I explained the progress made in the mid-term management plan. In the current mid-term management plan, DANTOTSU Value: Together to the Next for Sustainable Growth, which started in FY2022, we have been acting with three major growth strategies of accelerating growth by means of innovation, maximizing earnings power, and enhancing corporate resilience and FY2024 will be the final year of the actions. First, accelerate growth by means of innovation. In Smart Construction business, we advance our DX partner program with Japanese customers. Overseas, we expanded sales of Smart Construction 3D Machine Guidance. In the mining business, the cumulative number of AHS units installed became 727 units as of the end of March this year. We also started commercial operation of the remote-controlled bulldozers. In response to carbon neutrality, we have introduced four electric models for Japanese and European markets. We also acquired American Battery Solutions, a U.S. battery manufacturer, with the aim of developing and producing batteries optimized for construction and mining machineries and accelerating technological development toward carbon neutrality. In addition, we have begun a proof of concept for hydraulic excavators equipped with hydrogen fuel cells, and for super large dump trucks, we have signed a joint development agreement with General Motors on hydrogen fuel cells. Next, for maximizing earning power. In strategic markets, the number of vehicles allocated increased due to expansion of models and region covered by two-line model strategy. In aftermarket business, the number of contracts for extended warranties with maintenance contracts, which leverage our strengths in in-house component development and production and IoT, steadily increased. For enhanced corporate resilience, in addition to activities aimed at building a supply chain that's resistant to geopolitical risks and fluctuation in production volume through cross-sourcing and multi-sourcing, we introduced Enterprise Risk Management. In addition, we continue to work on reforming the way employees work and improving their skills, such as by conducting global engagement surveys, promoting diversity and inclusion, and developing AI and DX talents. Page 12 shows the progress toward achieving the management target for MTP. In FY2023, with decline in demand, particularly for construction equipment, we actively worked to improve sales price. Combined with a trend toward a weaker yen and the results of our growth strategy and structural reforms, we achieved record sales and operating profits. Regarding business targets, the operating income ratio was 15.7%, an improvement of 1.9 percentage points year-on-year. We'll continue to improve sales prices and pursue growth strategy. In terms of efficiency, ROE was 14.1%, exceeding the target of 10%. Regarding the shareholder returns, we will maintain a consolidated payout ratio of 40% or higher. Regarding ESG, we have been selected by the Dow Jones Sustainability Indices, and we've been rated A by CDP in both climate change and water risk. We also made steady progress in our efforts to reduce CO2 emissions and increase the rate of renewable energy use with a view to achieving our 2030 targets. In the retail finance business, we have achieved our targets for both ROA and net DE ratio. That's all from me. Thank you. This is Hishinuma, General Manager of Business Coordination Department. I will give an overview of our forecast for FY2024 and update on major markets. Page 14 shows an outline of our forecast for FY2024. First of all, we expect exchange rates for the U.S. dollar, euro, and Australian dollar to be 140 yen, 149 yen, and 90 yen, respectively. Net sales are projected at JPY 3,861 billion, almost at the same level as the last year. In the construction, mining, and utility equipment segment, we expect a decrease in volume due to lower demand, but due to improved selling prices, we forecast a year-on-year increase in sales, excluding the impact of FX. Operating income is expected to decrease by 8.3% to JPY 557 billion. The segment expects a year-on-year decrease in profit, although the negative impact of lower sales volume, higher material costs, and fixed expenses, as well as foreign exchange rates, will be partially offset by improved selling prices. Net income is expected to decrease by 11.8% to JPY 347 billion. The board of directors today adopted a resolution to buy back shares up to either JPY 100 billion or 33 million shares, and retire all of the shares to be repurchased during FY2024. ROE is projected to be 11.7%, taking into account the repurchase and cancellation of shares. Dividend per share is expected to be JPY 167, the same amount as in the previous year, and the consolidated payout ratio is projected to be 45.5%. Page 15 shows the forecast of net sales and profit for each segment. For construction, mining, and utility equipment, sales are projected to decrease 1.7% to JPY 3,553 billion, and profit is expected to decrease by 6.3% to JPY 538 billion, resulting in a segment margin of 15.1%, down 0.8 points year-on-year. Retail finance revenue is expected to increase by 2.4% to JPY 106 billion, and profit is expected to decrease by 9.3% to JPY 22 billion. For industrial machinery and others, sales are expected to increase by 17.1% to JPY 229 billion, and profit is expected to increase by 172.4% to JPY 28 billion. Details of each sector will be discussed later. Page 16 is a forecast of sales by region for the construction, mining, and utility equipment segment. Overall, segment sales are expected to decrease by 1.2% to JPY 3,548.3 billion. By region, sales are up in North America and Oceania, where sales of mining equipment are expected to increase, while sales are down in Latin America and Asia, where sales of those products are expected to decrease. Page 17 shows the variance analysis of sales and profit in the construction, mining, and utility equipment segment. Sales are expected to decrease by JPY 62.2 billion due to the negative impact of foreign exchange rates and decrease in volume, despite the positive impact of selling prices. Segment profit is expected to decrease by JPY 36 billion, although negative impacts of lower volume, higher cost of sales, and fixed costs, and exchange rates will be partially offset by improved selling prices. Segment profit margin is expected to decline 0.8 percentage points to 15.1%. Page 18 is the outlook for retail finance. Assets are expected to decrease by JPY 166.2 billion due to the impact of foreign exchange rates and a decrease in new contracts. New contracts are expected to decrease by JPY 95.6 billion, mainly due to the negative impact of foreign exchange rates. Segment profit is expected to decrease by JPY 2.2 billion due to a decrease in resale profit of used equipment after the termination of leases. ROA is expected to decrease 0.1 percentage points year-on-year to 1.9%. Page 19 shows projection of sales and segment profit in industrial machinery and other segment. Sales will increase by 17.1% year-on-year to JPY 229 billion, expecting the recovery of maintenance sales of excimer laser for semiconductor industry. Segment profit will expand by 172.4% to JPY 28 billion. From page 20, I explained the actual and projected demand for seven major products. This slide shows the demand dynamics of seven major products, including mining equipment. The preliminary figure in our estimate is shown for Q4 FY2023. In FY2023, global demand decreased by 7% year-on-year. In FY2024, demand will decrease -5% to -10%, with demand decrease mainly in construction equipment in each area. From next page, I explained the condition of major markets. Page 21 shows actual and projected demand in Japan. In FY2023, demand increased by 3% year-on-year. Demand remained steady in both public works and private sector construction. In FY2024, demand will remain almost flat year-on-year. Page 22 shows actual and projected demand in North America. In FY2023, demand increased by 3% year-on-year. Demand remained steady in the rental and energy industry, and infrastructure development and residential construction. In FY2024, demand will decrease between -5% and -10% year-on-year. Demand in North America is at a historically high level, and it will be sustained in general. But given negative factors for demand, including strong inflationary pressure and receding prospect for interest rate cuts, I observed we'll continue to watch the situation closely. Page 23 shows actual and projected demand in Europe. In FY2023, demand decreased by 10% year-on-year. Demand for construction equipment decreased, centering the UK, Germany, and Italy, the major European markets which were affected by high interest rates and high energy prices. In FY2024, demand will decrease between -5% and -10%. As we expect, the declining demand will continue with a dampened regional economy and investment appetite affected by the interest rate, inflation, and sustained high energy prices. Page 24 shows actual and projected demand in China. This slide shows the demand for hydraulic excavators, excluding mini excavators. For reference, demands including Chinese makers are also shown. Demand growth is net of foreign makers. In FY2023, demand declined by 42% year-on-year. Total demand, including Chinese makers, decreased by 35% year-on-year. In FY2024, demand will decline between -20% and -30% year-on-year, and total demand, including Chinese makers, will decline between -10% and -20% year-on-year. Page 25 shows actual and projected demand in Southeast Asia. In FY2023, demand declined by 16% year-on-year. Demand for mining equipment in Indonesia remained steady, but demand for construction equipment dropped in Indonesia, Thailand, and Vietnam and others, mainly due to delayed implementation of public works budget and unclear outlook of economy. In FY2024, demand will remain almost flat year-on-year. In the largest market of Indonesia, demand decline year-on-year is expected in mining equipment, with expected moderately falling core prices. As for construction equipment, demand is expected to recover in the second half of the fiscal year because a new government will be officially established in October after the presidential election, and the budget execution of the public works will start following that date. Page 26 shows the price trends and forecasts for major minerals related to demand and for mining equipment. The price of major minerals has fluctuated recently, but from a long-term perspective, they remain at high levels. On page 27, I will explain the trends in demand for mining equipment. Demand for units in 2023 appears to have increased by 1% compared to the previous year. Demand decreased in the CIS region and other regions, but increased in North America, Central and South America, and Oceania, resulting in solid demand overall. Demand outlook for the FY2024 is expected to be ±0% to -5% compared to previous year. Indonesia is expected to see a decrease, but other regions are expected to remain generally strong. On page 28, I will explain mining equipment sales. Sales for FY2023 increased by 21% year-on-year to JPY 1,717.2 billion. Exclusion impact of FX sales increased by 15%. Sales for FY2024 is expected to be JPY 1,709.7 billion, the same as the previous year. Exclusion impact of FX sales would increase. Page 29 shows the outlook for the sales of equipment, parts, and service, et cetera, in the construction, mining, and utility equipment segment. In FY2023, parts sales will increase 11% year-on-year to JPY 975.4 billion, with overall aftermarket sales ratio, including service, etc., being 50%. Overall aftermarket sales, excluding FX impact, increased by 7% year-on-year. In FY2024, parts sales are expected to be JPY 966.7 billion, down 1% from previous year. The aftermarket sales ratio, including service, is expected to be 51%, and overall aftermarket sales, excluding the effect of FX, are expected to increase by 3% compared to previous year. Page 30 is the outlook for capital expenditures, et cetera. On the left-hand side, capital investment, excluding rental asset investment, is expected to remain at the same level as the previous year, with continued investment mainly in the production base, sales base and solution business. In the middle, the R&D expense is expected to increase compared to the previous year due to the focused investment in electrification automation. Fixed costs on the right include the effects of structural reforms, but are expected to increase compared to previous year due to effects of inflation, personnel costs and expense, as well as investment in midterm projects. From page 46 onwards, I will explain some of the main topics. This is page 46. As a part of our efforts to strengthen our corporate brand, Komatsu has entered into a multi-year sponsorship agreement with British Williams Racing, one of the leading F1 teams. Through this partnership, we aim to create a new value together, both inside and outside of circuits, and to write history in the new era starting in 2024. Page 47. Komatsu's unmanned dump truck operation system, AHS, for mines has achieved a cumulative total of over 700 ultra-large self-driving dump trucks in February 2024. The 700th unit began operation in February 2024 at Glencore's Lomas Bayas Copper Mine in Chile. This mine is the eighth mine in Chile to have Komatsu AHS installed. Page 48. Komatsu, in cooperation with Denyo Corporation, has developed a concept generator that uses a hydrogen mixed combustion engine as a power supply device for electric mini excavators. In the first half of 2024, we plan to conduct a proof of concept at the customer site. When using electric construction equipment, one of the issues is the preparation of power supply infrastructure, as some of these sites are located in areas where power distribution networks are not yet in place. With this generator, we aim to realize a power supply solution that meets the environmental needs of our customers. That's all for my explanation. Now we will take questions from the audience. Thank you. This is Sasaki from Morgan Stanley MUFG Securities. I have two questions. One is about your shareholder return policy. You have announced a JPY 100 billion share buyback this time, as well as a forecast of negative profit growth. Nevertheless, you are maintaining a dividend of JPY 167 per share, resulting in a payout ratio, I believe, of 45%, which is rather generous. What is the background behind the decision? What kind of internal discussions did you have in announcing this shareholder return? Could you share your thoughts and decision-making process on the shareholder returns? This is Horikoshi, CFO. First of all, regarding dividends, we have always said that we are committed to a payout ratio of at least 40%. Following this commitment for FY2023, when profits were higher than the forecast announced in October, we decided to raise the payout ratio to 40% or JPY 167. This year, however, we are forecasting a downturn or a decrease in profits. Even in such case, our basic policy is to maintain the same amount of dividend as much as we can. We would maintain the same amount per share unless it would push up the payout ratio too much. That's the basic stance. On the other hand, as for share buyback, we established our internal criteria for implementation of buyback a long time ago. The criteria would prevent us from using share buyback just for the sake of improving ROE. We are not going to do that. First, any buyback program shall not lower our credit rating. That's the first criteria. And second, any buyback program shall not lower the equity ratio below a certain level because it is an important source of doing business. Other, these are the two mandatory criteria. In addition, we have several other items to check, such as first, ROE, whether it's too low or not. Second, cash flow projection, what are we expecting? That's the second point. Third, current net cash, what is the level at the moment in terms of the net cash? That's what we check. That's the third one. And the fourth one is dividend payout projection. Of course, how much is the dividend payout compared with the overall business? And finally, PER. For example, if PER is high or low, if it is low, that means it is a good opportunity for us to buy back shares. So those are the things that we look at as criteria for implementing a share buyback. We have had these criteria for some time now, although last year we had a comprehensive discussion to review some of it as part of the overall capital policy. It was in light of these criteria that we decided to buy back shares this time. Thank you very much for the clear explanation. My second question is about concrete details of the FY2024 projection. Slide 14 shows that for FY2024, other operating expenses are -JPY 28 billion, which I believe is the major factor behind the JPY 30 billion decline in profits. Could you elaborate on this, please? On the other hand, if we look at slide number 19, industrial machinery profit is significantly increasing by JPY 18 billion, which is probably because of a sharp recovery of Gigaphoton and KELK. Could you explain why there is such a large increase of nearly JPY 20 billion in industrial machinery? Could you please give us some of the details about other operating revenues and industrial machinery? Thank you for the question. First of all, for segment profit, the line below operating income includes such items as losses on disposal of assets, appraisal losses of nonintangible assets, and impairment losses of intangible and fixed assets. Other operating income is usually negative, but last year we had positive JPY 1.5 billion. It was because of the gain on sale of subsidiary shares in Peru. That's the reason for the positive number, which is different from usual years. But still, you may be wondering why we have such a large loss of JPY 28 billion this year. We posted a loss of about JPY 20 billion on the sale of reappraisal of Russian fixed assets, as we did in FY2022 and 2023, which altogether amounted to around JPY 12 billion in impairment losses or mostly inventory write-offs, which is counted against segment profits and losses. On the other hand, given the situation in Ukraine or Russia at the moment, which is growing tougher recently with time, we have decided to recognize losses on the appraisal of fixed assets this time. As for the Industrial Machinery and other segment, projected profits are stronger in FY2024 than in FY2023, as you have correctly pointed out. It's because in FY2023, as you know, the semiconductor industry was at a kind of plateau, and the maintenance sales of Gigaphoton declined significantly, resulting in a drop in profit margin. KELK, on the other hand, has both thermoelectric devices and semiconductor manufacturing equipment-related businesses. The former has a better profit margin but has declined in both sales mix and profit margin, both lowering profit margin of the whole sector. Another reason is that Komatsu NTC's automotive battery manufacturing equipment incurred some test and research expenses, which was not negligible. These are the factors behind the decline in margin for FY2023. For FY2024, however, the semiconductor industry is expected to have stronger performance, as you are all aware, and we expect a large increase in maintenance sales and recovery in profit margin at the Gigaphoton. That's why we expect a higher profit margin. Very clear. Thank you very much. Thank you very much. This is Kitaura from Bloomberg. I also have two points. Could you give us some additional information on the mining equipment business, where FY2024 projection is flat or a slight increase, excluding FX? Could you give us a breakdown for North America, Indonesia, and Latin America? How are these trends differentiated? How do your order books look like at the moment? And if there's any difference by the type of mineral, what are you seeing at the moment? I understand that, for example, the LME has restricted trading of Russian metals, which is affecting price trends at the moment. Thank you for the question. This is Horikoshi speaking. Please look at page 16 first. If you look at the sales trends by region on page 16, you will see that there are very uneven trends by region, which may appear inconsistent with the trends in market demands. That's what you may be thinking. For FY2024, as Mr. Hishinuma mentioned earlier, we believe that the orders for mining will be firm, with the exception of Indonesia. On page 16, there is a JPY 144 billion impact of foreign exchange rates, which is a factor pushing down sales and profits. But on the other hand, sales prices are expected to increase and contribute JPY 100 billion next year, meaning the net effect appears to be explainable by the volume trend. As you can see, North America is up significantly, most of which is attributable to mining, whereas Latin America is down due to mining also. The reason for this is simply a matter of deal-making. It just so happens that in FY2024, there are more deals recognized or booked in North America and less in Latin America. Such differences, however, are canceled out on a mid to long-term basis. For other regions, as I mentioned earlier in the discussion of demand for construction machinery, we are looking at negative growth almost in all regions except for North America, and any difference here is largely due to mining business. In North America, we plan to increase the inventory of rent to sell in the next fiscal year more than in this year, partly due to some delay we had this year. There is a positive growth for construction machinery as well. Thank you very much for the response. If you look at Indonesia alone, the mining sector is a little weak, but you mentioned earlier that there was a slight recovery in the construction machinery sector after the election. But if we look at the net effect, do you still expect a negative trend at this point? This is Hishinuma speaking. Thank you for the question. As for Indonesia, we are still seeing a negative trend on a net basis. As I mentioned earlier, for construction equipment, due to the presidential election, we had a modest forecast for Q4 FY2023. Although the new administration will be in place, we may have to wait until around October to see a pickup in trend from the current low level. If you look at the demand for nickel, which is more important for construction equipment than for mining equipment, the demand is slightly weak. This is another reason why we expect a modest trend in Indonesian construction equipment. As for mining, as I mentioned earlier, given our repeated comments about our equipment demand being related to 4,200 kilocalorie coal price, the price was around $53 per ton in April, and it's not that low. In view of the idle equipment ratio, it's kept low at around 5% or so at the moment. However, looking ahead, there is a possibility that the local prices may weaken slightly. So that's the outlook for the being negative. Thank you. My second point is about the mining equipment business and how you think about profit margin, which may not be all clear, but given the ongoing yen's depreciation trend, which should be positive to your profit margin, if the conventional profit margin is about 20%, which I believe is the case, has there been any major changes recently, including the impact of FX trend? Well, I like to answer. The biggest factor when it comes to foreign exchange trend is in which currency products are sold. In that sense, mining products are mostly sold in the U.S. dollar, meaning that there is a major impact at the moment. However, the profit margin itself has improved considerably beyond the impact of FX rates. In particular, KMC's operating income has improved greatly, especially in the underground mining business driven by structural reform efforts. So the overall profit margin is favorable. Thank you. Thank you very much. This is Maekawa from Nomura Securities. I have two questions. First is about the variance in segment profit. There was a factor called volume and product mix on page seven and 17, respectively, which show results for FY2023 and the forecast for FY2024. It appears that the volume impact is larger than the revenue impact. For FY2023, the results may have been affected by Russia, as you mentioned earlier. But for FY2024, what kind of impact do you expect? Is there any inventory fluctuation or other factors included? I like to answer. First of all, on page seven, the difference between FY2022 and 2023, the volume and product mix factor is negative JPY 20 billion, of which the volume factor accounts for negative JPY 1.2 billion. Since this factor affected sales only by JPY 3.3 billion, it affected profit only by JPY 1.2 billion. More important factor is regional mix and product mix, which totaled a loss of JPY 14.9 billion. The reason for this is, in terms of regional mix, contribution of Indonesia, where profit margin is relatively high, has declined, affecting the overall margin. And the product mix was also negative, significantly for the equipment sales. We sold more low-margin products in FY2023. That still is the case for FY2024. Just for your information, the impact of these two factors resulted in a loss of JPY 14.9 billion. The remaining JPY 3.9 billion is unrealized profit on inventories. One more factor, which is related to intergroup transactions, the export from Japan, which is high in profitability, has decreased considerably this time, especially due to the ongoing trend of inventory reduction. Therefore, an increase in unrealized profit on inventories and a decrease in exports from Japan, which is referred to as intergroup transaction mix, are the major factors. In addition, there was a loss of JPY 3.9 billion due to some small allowances for the accounts booked by some local entities during FY2023. The forecast for FY2024 on page 17 also shows a large impact of the volume and sales mix factors. Again, out of the sales volume impact of JPY 53.3 billion, the corresponding difference in gross profit is JPY 19.3 billion. In addition, we have the regional mix and the product mix factors totaling JPY 18 billion, which is rather significant. The regional mix factor is negative due to the same reason for FY2023, when the contribution of Indonesia declined. The product mix factor is mainly due to mining product mix. There is a large variation of profit margin among mining products, and next year, we expect to sell more low-profitability products, causing losses of JPY 18 billion in total. The remaining JPY 4.2 billion is explained by the acquisition of American Battery Solutions last year. This company requires massive R&D expenses, as a matter of fact, and generates limited profits on its own. Because of the acquisition of this company, overall mix has deteriorated. I hope this answered your question. Thank you for the detailed explanation. The second point is about share buyback. Once again, earlier, you took us through the internal criteria for executing buyback. Among them, one of the most impactful was free cash flow, I believe. As the company experiences a reduction in working capital going forward, there is less pressure to increase sales volume so quickly at the moment, meaning stable and solid free cash flow to be realized this year once again, which is a similar situation as last year when you decided to buy back your shares. In that sense, although you may make a decision on a case-by-case basis, I wonder if you can say that there is a certain degree of continuity in the outlook for your decision-making. I would appreciate it if you could elaborate on this. Free cash flows in FY2023 were JPY 230 billion. In April last year, I said that it would be JPY 350 billion, a much larger number. But the actual free cash flow was JPY 230 billion, down by JPY 120 billion. As a reason for one, we spent for the acquisition of ABS American Battery Solutions and iVolve. And more than anything, working capital did not decrease as we expected. As a result, free cash flow turned to JPY 230 billion this year. As I have been saying before, due to the structure of Komatsu, when sales increase, working capital tends to increase, and we wouldn't generate much free cash flow that worked in the fiscal year 2023, and free cash flow resulted in JPY 230 billion. Next year, as the sales would be flat and the reduction of inventory for which we are working hard would deliver results, we expect free cash flow would be around JPY 370 billion. So when the sales are flat year-on-year and working capital doesn't increase much, we would generate free cash flow as such. Is it correct to understand that in this fiscal year, you would have a considerable leeway with a cash allocation including that for shares buyback? We make an investment plan considering the possible M&A in the future. But the free cash flow number I mentioned does not include those unexpected factors, including M&A. Understood. Thank you. Thank you. I will take the next question. Mr. Isayama of Goldman Sachs, please. Thank you. I'm Isayama of Goldman Sachs. Do you hear me? Yes. Thank you. First, I'd like to ask about the construction in North America. Mr. Hishinuma mentioned that demand in January to March was flat year-on-year in North America. Excuse me for referring to a Japanese peer, but they said the demand for hydraulic excavator was -10%. Last night, an American peer said, "Passionate about Europe, the momentum in North America is slowing down as well." Please let us know your perspective of wholesalers, retailers, and the industry trend in the January to March period in North America. Do you expect that demand in FY2024 will decrease between -5% and -10%, while a Japanese peer expects the demand will be down by 3%? Please explain your current construction business in North America and your view for the industry. Thank you. This is Hishinuma. May I discuss Q4 of FY2023 alone? Well, our view is almost zero, a flat year-on-year. However, the situation varies by segment. For example, rental has been firm, but in Q3, it started to weaken slightly, and that weakness continued in Q4. Energy was not very strong either. On the other hand, residential investment has not been very strong in the first half. It was negative year-over-year in Q1, but it has been recovering gradually. The latest housing starts may not be very firm, but in January to March period, it was positive year-over-year. The total figure of each company might have been slightly different, like ±1% or 2%. Going forward, I think the trend will continue in each area. On the other hand, due to the sustained inflation and expected interest rate cut in FY2024, dealers postponed their replenishment of rental equipment. And now, as we see the prospect of interest rate cut being pushed back by another six months or more, the mindset seems to be slightly weakened. However, the overall situation of backlog on the side of retail customers remains unchanged, and the demand for equipment will continue to exist. But as mentioned before, we see that investment mindset might be slightly weakened. Thank you, Hishinuma-san. I think you commented in the Q3 meeting that there are some gaps between wholesalers and retailers on the dealer side. Would you additionally show us the current comments of dealers? According to dealers, their customers continue to hold order backlog, and dealers continue to restock their new equipment inventory. They are ready to sell if the demand comes back. Supply chain also recovered. If there is an additional order, we are ready to supply as well. But talking about the rental restocking, as mentioned before, we expected the rental replenishment in the second half onward due to the high rental season in spring onward. But actually, partly due to the prospect of sustained high interest rate, the timing of replenishment slightly delayed in the second half. They refrained from making orders. In FY2024, there are definitely replenished stock as the inventory is in short. But we need to be watchful for its timing. I will take the next question. Mr. Sano of JP Morgan Securities, please. Thank you. I'm Sano of JP Morgan Securities. I have two questions. First, I'd like to ask about your view for the Indonesian market in FY2024. I think you talked about your prospect of construction equipment three months ago, saying that after the presidential election, we expect to see the project-related budget, also for the relocation of the capital. On the other hand, due to the weakening Chinese market, I think Chinese makers seem to be more focused on the Indonesian market. So including this competitive environment, please let us know how you view Indonesia in this fiscal year, including demand and market share. Thank you. Regarding Indonesia, as I mentioned briefly before, demand for construction equipment in FY2023 was firm. Due to the presidential election, we expected a drop in Q4. As a new government will start in October, overall, FY2024 will be slightly weak. Because of expansion of Chinese makers, the competitive environment is tough, but we will continue to address as before. This is Ogawa. Let me add a comment about Indonesia. Talking about the seasonality, Q4 is a sales season in Indonesia. Unfortunately, in FY2023, demand fell considerably, as mentioned in that quarter. In FY2024, the first half will be weak as a new government will start in October, and the budget execution will be after that point. In our demand plan, we expect a low first half and high second half. As for mining equipment, in other areas except Indonesia, demand will be almost flat year-on-year, and in Indonesia, it will be lower than the previous year. Partly, it will be affected by the coal price. Current price is about $56 for 4,200 kilocalories. Going forward, due to the built-up high-level coal inventory in China, we see the risk of thermal coal price falling further, and the risk is included in our plan. As for the permit for the coal production, it is slightly delayed, though it seems to be progressed gradually. And this is also one of the major impacts. So coal price determines the mining demand in Indonesia, and we need to monitor this closely. Due to the very weak price of coal in the last few years, replacement during the idle time to the new equipment is progressing. We need to be watchful for that development as well. But as Hishinuma mentioned before, the operational level of equipment is very good, so we do not have to worry about the after-sales market. Thank you, Ogawa, Hishinuma-san. Second question is about selling prices. The last factor by selling prices in the FY2024 plan is shown as JPY 105.1 billion. Would you comment on this in terms of area and the key driver? When I simply compare this with sales, it is close to 3%. Compared to the competitor Caterpillar, whose number was 3.6% in Q1, you are getting closer to the peer. Let us know your thoughts on the difference from three months ago, the competitive environment, and the after-sales market, whether your share there is larger. I'm Horikoshi. I said that in FY2023, the selling price increase was JPY 173.1 billion, and this is 3.8% of sales. It is based on the calculation of the selling prices increase compared to the sales before the price increase. When it comes to FY2024, the selling prices increase impact is expected to be JPY 105.1 billion. Compared to the sales before the price increase, it will be 3.1% of sales. When I compare last year and this year, partly due to the improvement in the supply chain, the selling price increase ratio is down. You referred to the example of Caterpillar. The selling price increase was over 10% before, but we assume that it is coming down to around 4%. For the next fiscal year, the price increase ratio of construction equipment will be lower than this year. We raised the price last year, but the price increase ratio of equipment will be down. Relatively speaking, parts price will not be so much lower than the previous year. The price increase ratio of parts is currently set at a high level. By the product segment of construction and mining, the price increase in construction in the next year will be controlled as we have been raising the price before. That in mining equipment in FY2024, it will be higher as it has been controlled before. Talking about the major resource companies, the price is set by a formula, and it is reflected after some time lag. Partly due to this, in the next fiscal year, the price increase ratio in mining will be higher. Overall, including the supply year's condition, the price increase ratio is slightly down. Thank you, Horikoshi-san. Do you think the selling price impact this time is a bit conservative, or that it is substantial as demand seems to be sustained because in the last few years, the results regarding the impact of selling prices exceeded that of the projection? One thing I can say is that previously, we have been pushing hard to increase prices, and the price increased. But this time, knowing the recovered supply chain, we are not pushing them as hard as before. But this time, this is a figure based on the presented number by the operational side. So how shall we describe it? It can be a slightly conservative view. Understood. Thank you very much. That's all from me. Thank you. Question from Mr. Isayama from Goldman Sachs was cut off at the first question. So Mr. Isayama, would you ask a second question? I wanted to ask about the production. I think that you sustained the high utilization and production to maintain the peak sales so far. Now you are on the declining trend in volume. Is the production utilization also on the declining trend, or don't we have to worry about that because you wouldn't have any issues in sales through? In the course of profit, the difference of volume and product mix and others was shown as a negative factor. So I was interested in that point, whether you expect the profit decrease due to the utilization is included. Also, please let us know if that factor is included in the plan for FY2024. Thank you. We have already cut back the production substantially from the second half of FY2023, partly due to the built-up inventory. In Europe, in particular, in some locations, we have already suspended the production. In the next fiscal year, we will reduce further. The current utilization level will be sustained. This is Ogawa. In FY2022 and the first half of FY2023, the utilization level itself was very high in each plant. But in the second half of FY2023, production was substantially reduced. In the second half alone, we reduced the production volume by about 7,000. In FY2022 and the first half of FY2023, there was a lot of order backlog. To meet the demand, we increased utilization and overtime. Then demand started to decline, and the gap led to the built-up inventory. We had a drastic production adjustment in the second half of the year. As the production adjustment progressed, the overtime in FY2024 in plants in Japan will be more optimized to the level of 0.5-1 hour per day. But the condition varies by region. For example, for mini shovel in Europe, the inventory level is still high. So we need to have further production adjustment. But put simply, the situation was tough in the second half of FY2023, but over time, it is coming back to the more appropriate level gradually. Thank you, Mr. Ogawa. Based on what you just said, is it okay to think about this fiscal year with this assumption that the production operations will already return to normal and the first half is to be negative compared to the previous year, but it will be positive from the second half, that is, if things return to normal? We believe that we are getting closer to retail equals wholesale, and we are making production plans while keeping this in mind. Although the operating rate will not be as high as it was in the first half of 2023, but how should I say it? It is gradually reaching an appropriate operating state. I understand very well. Thank you very much. And I repeat, Mr. Hishinuma, I am so sorry. I thank you. Excuse me. I thank you very much. Next question from Nihon Keizai Shimbun, Mr. Motoaki, please. Hello, I am Motoaki from the Nikkei. Can you hear me? Yes, please. This is related to the question from JP Morgan earlier, but I also have a question about the price increase. I think JPY 105.1 billion for this fiscal year is quite aggressive. But you just told us about your outlook by product, but will you please elaborate about your strategy by region? For example, where should the prices be raised? Yes, this is Horikoshi speaking. In terms of value contribution from the sales price increase, the biggest markets are North America and Central and South America. We also have a very large project in the Middle East in each country, so we think we will be able to raise sales prices there as well. And in Japan also, we plan to continue raising sales prices, although the rate of increase will be slightly lower than last year. You just mentioned that you will raise prices in North America, Central and South America, but the outlook for the demand is going to be slightly lower, right? So in that case, it will be difficult to raise prices simply by adding in the higher cost of the raw materials. Do you have a strategy to get customers to accept the price increase? I think there are areas where it will be easy to raise prices and areas that it will be more difficult to raise prices. If anything, North America, Central, and South America have a culture of being able to raise prices in proportion to inflation price increase. So I think in America, North America, we will be able to continue raising prices. On the other hand, though, it is difficult to raise prices in areas where competition is fierce, especially in Southeast Asia. That situation is the same in 2023. I think it will remain true for 2024 as well. I say thank you. Thank you very much. Next question from SMBC Nikko Securities, Mr. Taninaka, please. Hello, Taninaka from SMBC Nikko Securities. Can you hear me? Yes, please, go ahead. I have two questions. The first question is about the change in the views for the demand from the third quarter. Is it correct to think that your company's major thinking has not changed much, and since interest rates remain high in the macro environment, do you think that the demand outlook takes into account the risk that demand in North America was stagnant? Yes, that's how we are seeing it. Your current question is mainly about North America, right, and that area, right? Yes, yes. And please let me know if there are any major changes or general changes. The main reason is, of course, inflation and also interest rates remaining high. We thought that these would be resolved sooner, but they have not been resolved. Also, the political instability and uncertainty for the future after the election will continue, so we think that the demand in North America will not increase. Thank you very much. I understand very well. My second question is about progress in the midterm business plan. It is written in your materials, but would you please tell me about the progress again? Your company's business goals include a sales growth rate that exceeds the industry standard and a profit margin that is at the top level of the industry. However, though, your competitors are also growing quite a bit, so would you please tell me whether your company's current performance you consider good or bad compared to your competitors or in the industry, or is it just a passing grade? What's your sense? This is Horikoshi speaking. I think our growth potential is not bad compared to other companies. In terms of profitability, CAT is at the top among its peers, thanks in part to its ability to flexibly raise selling prices, and I think Komatsu is at a level second only to CAT. This is Ogawa. Let me jump in. I think that we need to be comparing our profitability always against other pillars. Until a few years ago, the difference in profitability between our company and CAT was 3-4 points, but recently, the difference has widened considerably. Most of that is due to construction equipment. The difference in the main battlefields for construction equipment between the two companies has a big impact on profitability. CAT's focus is North America and Latin America, while our focus is on Japan and Asia. So that's a big difference. Cater pillar's sales in North America and Latin America, which accounts for about 60%-65% of the total sales, while ours is 40%-45%. As I mentioned earlier about the price increase, one of the reasons that is difficult is that it's difficult to raise prices in our main battlefield. And furthermore, Cater pillar's sales scales for construction equipment are overwhelmingly larger than Komatsu. They are about twice the size of ours. On the other hand, though, the sales of mine equipment are almost the same for both companies. Since acquiring Joy Global, sales have remained almost the same for both companies, and Komatsu's profit margins surpass the CAT peer because we produce and sell directly. This trend has hardly changed in recent years. Therefore, a major issue for us is how to increase the profit margin of construction equipment. We have reflected this fact in our operating profit margin. It is inferior to the Caterpillar's, which is one of the management targets in the midterm plan, and we would like to move forward while thoroughly discussing what measures we need to be taking in this area. I understand. Thank you very much. That's all from me. Thank you very much. I'd like to take the next question from Citigroup Securities, Mr. McDonald, please. Yes, can you hear me? Yes, please go ahead. Thank you. Sorry for having to participate remotely online today. I have three questions. The first question concerns the reports that the BHP is proposing to acquire Anglo American. If this acquisition goes through, what impact will this have on your company? That's my first question, please. This is Ogawa speaking. At this point, nothing has been confirmed, so I have nothing to comment on. However, if this actually happens, we will need to keep a close eye on it, but I'm not particularly worried about it at this point. Just to confirm, Mr. Ogawa, your company currently does more business with Anglo American, right? Sorry, I don't have exact figures in front of me now, so I'll need to get back to you later. Yes, got it. Second question. I'd like to ask you a quick question about the share buybacks. Japanese companies, in general, announce share buybacks over a one-year timeframe, but this time, your company announced that Komatsu will buy back its own shares for about six months until September 30th. Does your company have a message behind this that this is over six months instead of the usual one year? Regarding share buybacks, Japan's corporate law stipulates that share buybacks must be completed within one year. So your question is why you have a plan for a six-month period. I would like to answer with an example. For example, if you want to buy back 100 billion shares and the stock price is JPY 4,500, the first estimate is how many business days it would take. If you look at the range of ups and downs in stock prices, there are 245 and since there are 245 business days in a year, and in order to finish within the time limit, you have to set a buffer from that. Furthermore, we will be looking at fluctuation of the share prices to some extent too, so if we do a share buyback of, say, JPY 100 billion at a share price of 4,500 JPY, we would expect it to be completed in about 63 business days. If you have a little buffer against that, it will be about September 30th. I believe on this date, for example, even if you have some fluctuation, our share buyback policy can be completed. That's our approach. I understand. I learned a lot. Thank you very much. Final question. Regarding your increase and decrease analysis, I think that the logistic costs are included in the cost difference, but I think that the forecast for the past and the current period has changed due to various reasons such as shipping costs, the Red Sea issue, Baltimore bridge issues. It's a minor question, but how do you think about the actual results for the past period and the forecast for this period regarding logistic costs? A comparison between 2022 and 2023 is on page seven. The cost difference is a loss of JPY 17.3 billion, but in fact, the shipping freight cost is a positive of about JPY 15 billion. Shipping freight has dropped significantly from 2022 to 2023, so we have included that as a plus, but if we include that, netted the cost difference is a loss of JPY 17.3 billion. And Suez, this is Suez Canal. Now, it's closed due to Israeli issues, but now we have to go around the Strait of Malacca, but even so, the actual shipping freight has not changed all that much, and the period is longer, and the shipping freight has not changed all that much, although it takes more time compared to 2022. The shipping freight has decreased. This is reflecting actual results. So regarding 2024 compared to 2023, currently, we have a loss of JPY 25.7 billion due to a difference in costs, but here, the shipping fee is almost impacted zero. Therefore, we assume that 2023 level will continue in 2024. For example, there's a talk that Panama Canal is currently being restricted due to a lack of water or the bridge is broken, but it's also possible to use other ports and send goods, and we haven't heard nothing that is causing a major problem, so the price for the next year is at the same level as this year. Thank you very much. In terms of logistics, domestic logistics costs have risen considerably. We are also trying to eliminate the time that the trucks spend in our factory premises, so what we used to ask the logistics supplier, "We are bringing all the transportation loading, unloading of goods in-house work." We used to ask the transport company to do it, but we are doing it, so that effort is costing us. We are now bringing the workload of about 40 people to in-house. In addition to this cost, the Ministry of Land, Infrastructure, Transport, and Tourism has issued a guideline for an 8% increase for logistics costs, so we also reflected that in our 2024 plan. Okay, I understand. Here we go. Thank you very much. Thank you very much for your question. We are running out of time, so I'm sorry, but this will be the last question. Next question from Daiwa Securities. Mr. Tai, please. Hello, this is Tai. Thank you very much. I'd like to ask Mr. Ogawa, this is a very—I would like to get your rough impression. My feeling is that your company's view on demand has toned down a bit compared to three months ago. You explained the mining and Indonesia situation in quite a good detail. I'd like to know from you how you feel about the demand environment in regions such as the U.S., Europe, Asia, and Japan from your perspective before we end this call. Well, I think America's demand is a little bit on the conservative side. This is my personal feeling, though, but I think so because infrastructure and energy are relatively strong, and housing demand is still very strong in the U.S., and housing starts are also rapidly increasing, reaching 1.57 million units in February. I mean, it went up, so I think there's a bit of a conservative outlook on demand for the United States, but things are still rough in Europe. However, intuitively speaking, I feel that we have hit a bottom. As for Asia, as I mentioned earlier, Indonesia will probably return after October when the presidential election frenzy comes down. And as for mining, this is also, as I mentioned earlier, expected to remain almost flat except for Indonesia, and Indonesia will fall, but I think this is a bit conservative too. If the current coal price is maintained, I have a feeling that there will not actually be such a big drop. However, though, when the price of thermal coal was very high in 2021, there was a lot of equipment replacement, so I feel that we need to keep a close eye on demand for new equipment. And on the other hand, as I mentioned before, operations are operating at a very high level, so I'm not worried at all about the aftermarket. What about Japan? It's not very large, but there's almost no change in Japan. As you can probably tell by looking at our materials, it remains zero for almost the entire time, so no change. We're not expecting much demand for new equipment from Japan, but rather we are pitching solution business in Japan. I think that's a key in how to grow small construction. I understand. I'd like to ask you one more thing too, Mr. Ogawa, please. Regarding the rate of price increase, it is true that the 10% increase in the past may have been a bit abnormal, and the rate is now falling to around 3%-4%. I think you were saying three months ago, at the end of the year, that the price increase for the parts would be one of the focuses for 2024, but I felt that the rate of price increase has not factored in very well. What do you think about it? If the current operating unit is high, I thought it would be possible to increase the price of JPY 1 trillion parts more and incorporate that price increase. I understand that equipment is a different story. Relatively speaking, you're right. The parts prices are easier to raise. For example, based on the actual result for 2023, we've been able to raise prices by 5%-6%, and the current proposal also incorporates the price increase to approximately 4%-5%. Whether you can raise prices further is really depending on our customers, so relatively speaking, it is easier to raise prices on parts. I see. I got it. Thank you very much. Thank you very much. Now it is time to close, so I'd like to conclude Komatsu's 2023 financial results briefing. Thank you very much, everyone, for joining us today.