Now it is time to begin the results announcement for the second quarter FY 2022. We will hold this meeting on an online basis. Until 3:50 P.M., the company will make presentation, and twenty minutes after that, it is going to be a Q&A session for only the members of the media. We will accept questions from analysts and investors at around 4:10 P.M. to 4:30 P.M. We will accept your questions only via teleconferencing system. As is informed beforehand, you need to pre-register your participation. When you raise questions when other noises are interfering, then we may not be able to hear you well. Please make sure that you are in the conference room or otherwise, so that the noises are avoided to the extent possible. Now, as we announced on the 30th of September, a timely disclosure document, since the company now expects to enter into a more critical phase of the process, the company does not anticipate to provide answers to the questions on the updates of the process. Please do understand the situation. Now let me introduce the presenters today. Representative Executive Officer, Corporate Executive Vice President and CFO, Masayoshi Hirata. Representative Executive Officer, President and CEO of Toshiba Electronic Devices & Storage Corporation, Hiroyuki Sato. Corporate Officer, Vice President of Finance and Cash Management Division, Yasuhiro Matsunaga. I am Midori Hara, Corporate Communications Division. Now, without further ado, let me start the PowerPoint presentation for the results for the second quarter of FY 2022. Mr. Hirata, please. Now, may I present on the results for the second quarter of FY 2022. If you could kindly look at page three. This is the key points of the second quarter results announcement. There are two key points. First is that, in the first half results, in regard to operating income, there was one-time factors, including provision for HDD product warranty and also drastic change in HDD market, as well as the goodwill impairment in the printing businesses. Mostly because of the one-time factors, we have lower operating income. In regard to the non-operating income, we were able to increase the net income, but, I will cover the detailed number later. Second point is regarding FY 2022 full year forecast. Because of the one-time factors that I have mentioned earlier, the JPY 45 billion of change was made to the operating income, and revised forecast is JPY 135 billion. Just for your information, for net income, we have downward revised by JPY 10 billion and revised forecast is JPY 190 billion. Now, if you could kindly move to page six. This is the income statement. Now, during the first half of FY 2022, JPY 1,675.2 billion was the net sales, which was JPY 48.8 billion increase compared year-over-year, and it is an increase of 3%. Operating income was JPY 2.7 billion, hard disk drives and retail and printing and other one-time factors are mostly the reasons, and we had a decline of JPY 42.3 billion year-over-year. However, the non-operating income was improved, and therefore, net income was a JPY 40.9 billion increase to JPY 107 billion. Page seven is the overall picture of the operating income. On far left, you have the actual of first half 2021. When adding back JPY 4.3 billion with restructuring costs in it, et cetera, the total actual H1 operating income in FY 2021 was JPY 49.3 billion. Far right, you have darker gray area called one-time factors. In hard disk businesses, there were market change, and also, there was a retail and printing business had some impairment and one-time factor existed. In the middle, as you can see, for material cost hike and logistics cost hike, and there were some changes in our profitability. We had about JPY 42.3 billion and JPY 11.6 billion of a cost was incurred. But all these were actually offset by JPY 10.7 billion of exchange rate change as well as increased DC in sales, and we were able to absorb these changes. Page eight is breakdown of non-operating income. As I mentioned earlier, the sales of Toshiba Carrier posted some gains and JPY 90.9 billion yen was income on sales of securities, as well as equity earnings from Kioxia and others of JPY 31.8 billion. A total JPY 127.8 billion was the gain on operating, non-operating income. At page nine is a cash flow items. EBITDA decline, as well as the advances we had last fiscal year no longer exist this year. As a result of that, the working capital was deteriorated. However, on the whole, we were able to make a positive cash flow from operating activities of JPY 18 billion. In regard to cash flow from investing activities, while we are making investment for the growth, we were able to have some gains on sales of the securities. On the whole, JPY 57.8 billion positive investing activities cash flow. As a result, free cash flows was positive, JPY 35.8 billion. In the lower half of the same chart, equity attributed to shareholders of the company was JPY 1,245.8 billion. There was a dividend, a full year dividend, as well as special dividend was made. Yet, on top of the net income, as well as the improvement of the comprehensive income, as a result of that, we have JPY 39.2 billion increase, and a 34.2% is the shareholders' equity ratio. Net interest-bearing debt was JPY 80.5 billion. That is the borrowing position. If you could move on to page ten, these are the detailed items of the previous item. So please refer to this for your reference. Next, I will move on to explanation by segment. Please turn to page thirteen. This is the breakdown of the energy systems and solutions. Net sales was JPY 280.5 billion, a JPY 44.5 billion increase year-on-year. Operating income was a JPY 5 billion loss, a JPY 9.5 billion decrease year-on-year. This operating loss of minus JPY 5 billion is due to, in power generation systems, project cost re-examination in Toshiba Plant Systems & Services. In transmissions and distribution systems, soaring of transport costs and rising fuel prices due to the weak yen, et cetera, in biomass power generation business. Page 14 is the breakdown of Infrastructure Systems and Solutions. Net sales was JPY 300.2 billion, and operating income was JPY 3.2 billion. Public infrastructure and railways and industrial systems are both trending steadily. Page 15 is Building Solutions. Net sales was JPY 258.1 billion, and operating income was JPY 0.7 billion. Elevator and escalator business saw decrease in sales and decrease in profits, mainly due to parts shortages such as semiconductors, especially in the Japanese market. Further, the air conditioning business sale bore a deconsolidation effect of JPY -27.7 billion in sales, and JPY -9.5 billion in operating income year-on-year. Page 16 shows the electronic devices and storage solutions results breakdown. Net sales was JPY 403.2 billion, a decrease of JPY 29.7 billion year-on-year. Operating income was JPY 20.2 billion, a decrease of JPY 14.5 billion year-on-year. In the semiconductor business, the market continues to be firm, plus the weak yen is contributing, and NuFlare Technology mask writer sales are increasing, resulting in increase in sales and in profits of semiconductors. On the other hand, in HDDs and others, due to shrinkage of mobile and desktop markets, and new line HDD market adjustment, and increase of provisions for product warranty, mainly due to these one-time factors, profits decreased year-on-year. For our responses going forward, Mr. Sato, Representative Executive Officer managing electronic devices and storage, will be explaining later. On page 17, upper half shows Retail and Printing Solutions. Net sales was JPY 246.2 billion, a JPY 24.5 billion increase. Operating income was a loss of JPY 4.5 billion, a decrease of JPY 8.8 billion year-on-year. This is due to goodwill impairment in the printing business. Details will be explained later. Bottom half is digital solutions. Net sales was JPY 104.8 billion, and operating income was JPY 8.3 billion. Although the sale of Chubu Toshiba Engineering Corporation has a deconsolidation impact, digital solutions is trending relatively steadily. Page 18 shows orders received and order backlog three-year trends. Orders received in the first half was consistent with previous years. For order backlogs, we are at a time of progression into sales of large orders we received so far, such as thermal power projects. Although order backlogs are less year-on-year, the level is consistent with previous years. While in the recent market environment, carbon neutrality related demand is increasing, and with the resolution of power shortage, service and maintenance related demand is also growing. Further, social infrastructure related demand is steady overall, with stable growth expected. With these market environments as the background, we are in a position able to expect further order growth. Please turn to page 20. This is the FY 2022 forecast. Both net sales and operating income have been revised from the previous forecast. Net sales increased by JPY 50 billion due to yen depreciation, and operating income decreased by JPY 45 billion. On the other hand, due to an increase in non-operating income, net income is expected to be JPY 190 billion, although this figure is for reference only. Free cash flow forecast remains unchanged due to the revision of the timing of some investments and loans, despite the deterioration of EBITDA. Page 21 shows the FY 2022 forecast by segment. Please refer to the column on the right, versus previous forecast. Operating income has been revised downward by JPY 45 billion, mainly due to the deterioration Electronic Devices & Storage Solutions and Retail & Printing Solutions. Page 22 is operating income comparison of FY 2022 forecast and FY 2021 actual. The leftmost column shows FY 2021 actual operating income. FY 2021 actual operating income was JPY 165 billion, excluding the JPY 6.1 billion in restructuring costs. As we explained in the first half, there is one-time factor for the hard disk drive deteriorated by JPY 34.7 billion, and Retail & Printing Solutions, including goodwill impairment, one-time factor deteriorated by JPY 43.4 billion. Other than the one-time factor, as shown in the center part of the chart, fixed costs for growth increased by JPY 93 billion as planned, which was fully absorbed by the effect of the yen depreciation, revenue growth, and other factors. FY 2022 forecast breakdown of the main business is shown on the appendix beyond page 33, and please look at it for your reference. I would like to make three additional explanations on page 23 and beyond. First is about the goodwill impairment of Retail and Printing Solutions. Please take a look at page 24. The company recognized signs of impairment due to the decline in the share price of Toshiba Tec Corporation, a consolidated subsidiary of the company, and the impact of foreign exchange rate fluctuations, and performed an impairment test. As a result, a loss of JPY 10.4 billion was recorded for goodwill. After goodwill impairment, the balance of goodwill is JPY 35.1 billion. This impairment loss was recorded in Toshiba Group's consolidated accounting in accordance with U.S. GAAP. In Toshiba Tec Corporation's consolidated accounting, most of the goodwill has been already amortized at the end of FY 2021 in accordance with JGAAP. From page 25, it is related to the HDD business profitability improvement and the future forecast. Mr. Sato, Representative Executive Officer in charge of electronic devices and storage, will explain. I will explain about the hard disk drive business. We have taken measures to cope with the deteriorating market conditions and quality problems as shown. For HDD Philippines, our main HDD production site, we have already reduced the total number of direct employees by 1,500 or 16% of the total workforce between last year and this fiscal year due to the decrease in scale of production. In addition to the 1,300 personnel downsizing, 200 personnel were streamlined through the labor saving. Since there will be no hire for attrition, there is no restructuring costs. In addition, the entire business unit will review the timing of CapEx and reduce expenses, which will result in JPY 5 billion fixed cost control. We believe, however, that the market downturn of the data center market is temporary, and we plan to continue to invest in R&D to realize next generation high capacity data centers. This is once again the storage market outlook. The 2020s will be the decade of data. Here is the transition for the four-year period from 2021 to 2025, and the amount of data creation will be approximately 2.2 times greater. Storage capacity installed base will increase by 2 times. HD capacity installed base is expected to grow by 1.9 times. Although a decrease in demand occurred due to customers' investment restraint, we believe that the size of the market, which is the basis of future plans, will not change significantly. Nearline HDDs are a large part of the right side in the tiered diagram and high capacity data storage mix. It is a balance of capacity and speed, and more economical nearline HDDs will be required. As part of Toshiba HDD's growth strategy, we will continue to focus our resources on nearline HDDs. We have already engaged with eight out of 10 major cloud service providers, and plan to launch new products to increase our market share. For this year, FY 2022, 20 TB customer verification is taking place. Sales volume decreased due to the need for the reliability improvement with some customers. We will focus, however, on the development of the microwave-assisted switching technology, and also the shingled magnetic recording, and the 29 TB model, and launch it as a leading-edge product in FY 2024. Furthermore, we aim to achieve over 30 TB using 11 disk by FY 2025. Next, I will explain the semiconductor market. The pie chart on the left shows the semiconductor market excluding memory and Toshiba sales by application for FY 2022. In the semiconductor market, demand is softening in applications such as data centers and consumer equipment, which account for more than 70% of the market. That is due to the impact of slowing IT investment and consumer demand. On the other hand, sales of automotive and industrial applications, which are relatively less susceptible to market fluctuations, are expected to remain strong. Our semiconductor business, automotive and industrial application accounts for 60% and remain our focus. We plan to grow our power semiconductor. As you can see in the bar graph on the right, the size is accelerating due to the spread of electrification of automobiles. Therefore, we will continue to make capital investments of JPY 120 billion, JPY 20 billion more than our initial plan for FY 2022. We will continue to invest our resources. That will conclude my explanation. Finally, I would like to discuss the equity earnings from Kioxia. The details, as usual, based on the information that we have received is explained, and these are for your reference. This is about the financial results for FY 2022 second quarter. Thank you. That concludes presentation by the company. We now move on to the Q&A session. We will spend about 20 minutes to accept questions from the media. May I elaborate on the ways to participate in the questions. Those of you who are pre-registered to the telephone conference system will be prioritized. First, we will ask questions from the Japanese channel, followed by questions from English channel. If you have any questions, please press star and one. It is not pounds, but it is a star mark, so please make sure that you push the correct button. When your name and the company name was called out, please start your questions. When you withdraw your questions, please press star and two. Please stop the live streaming from the website while you are raising the questions. When the microphone on your side picks up the live audio from the PC and you will hear the audio is duplicated. Also, when you are not speaking, in order to avoid the unnecessary noises to be picked up, such as typing the keyboards, please mute your mic. Now, if you have any questions, please press star and one on the Japanese channel first. Nikkei, Yao-san, please. T his is Yao of Nikkei. Can you hear me? Yes. There are two questions. Once again, strategic alternatives. What about the process for determining the strategic alternatives? What is the progress and what is the projections for the future progress? I am aware that because it is going to face a more critical fate, and if it is difficult for you to make specific remarks, and couldn't you just give us a general directions of the process? Second questions. In regard to the market fluctuations, in regard to a drastic change in HDD market, that you've referred during the presentation, and your assessment is that drastic change in the market is going to be a one-time factor, but to what extent do you expect that to continue? As a result of that, the customers are suppressing the investment. What are the reasons behind the customers' suppression of investment? These are related to the changes in the market. Also, in the memory business, I know the company only have an equity interest in that. However, if you could also elaborate on the market changes for the memory side as well, it'd be appreciated. Thank you for the question. For the first point, Hirata will answer, and Sato will take up the second question. As I mentioned at the very outset, our special committee have been playing a role in exploring the strategic alternatives, and that effort is ongoing at this point in time. As of today, there's no new news to be announcing to you. Therefore, please forgive us, and please allow us to refrain from making any comments at this point in time. When appropriate timing comes, and when a specific event happens, to allow us to make an announcement, and we will appropriately disclose such information. Please do understand the situation. Thank you. In regard to the change in the market situation for HDD, this is Sato to take up your question. To what extent the situation will continue, it is very hard to see the end of the current situation. A full-fledged recovery will be coming in the next fiscal year. Now, in regard to the major factors contributing to the drastic change in HDD, companies are forecasting a future recession in the advertisement revenues and the cloud service revenues. The data center provider have reduced the investment amid the decline in advertisement revenues or cloud services, and that is our irony. Thank you very much. On top of that, in regard to NAND flash memory, I believe that you have asked the questions. As always, Toshiba is only posting the equity income from Kioxia. In regard to the future forecast, we are not in the position to receive any type of outlook of Kioxia business. Therefore, at this point in time, our knowledge is the same as yours. Kioxia itself is that in the second half of this year, they are going to reduce its production volume, and therefore, perhaps they are adjusting at this point. Thank you very much. Understood. Thank you very much. Thank you very much. Let us move on. Nikkei BP, Kodachi, over to you, please. Thank you very much. I am Kodachi of Nikkei BP. Can you hear me? Yes, we hear you. Thank you. I have two questions. The first question is decrease in operating profit this time. You say not one-time factors, but materials and components cost soarings will continue going forward. Sorry, there is a lot of noise and feedback. Sorry, I could not hear your question. This time, although not included in the one-time factors, materials and components cost increases, we think, or I think, will continue to increase. Free cash flow compared to last year first half, JPY 55.6 billion decrease. The future expected cash flow, do you think these factors will affect? Secondly, your policy about dividend, JPY 290 full year, operating income base is coming down. Non-operating income is increasing mainly due to the sale of Toshiba Carrier. For dividends, do you link to net income regardless of the operating income which comes from the main core businesses? Now on the first question, future free cash flow, I think that was what you were asking about. Currently, apparently, materials, logistics costs are soaring, and this was happening, and we think are staying at a high level. In the last financial results announcement meeting, as we explained then, while gaining understanding from customers, we are also asking customers to bear the burden as well. This is the direction we are taking. With this factor alone, we do not expect free cash flow to worsen. Now for dividend forecast, I think this was what you were asking. Our basic dividend policy is as already announced, full year 30% or higher payout ratio. Once the full year accounts are closed, the audit firms, when the auditors sign, we review the balance sheet, and we calculate and evaluate the appropriate level of capital. Any shareholders' equity above appropriate level of capital, if there is such surplus, we will consider the future investments, and what we consider as surplus will be returned to shareholders as special returns. This is our policy, and this is what we have been doing from the past. In June, for FY 2021 end balance sheet, we reviewed and we returned back to the shareholders. This was the method taken, and we will go through the same process and method next year as well. This is all from me. Excuse me. To add one further question on that, 30% or higher annual payout ratio is the determined policy then. For Kioxia Holdings, this part is difficult to expect, therefore you don't have full year PL forecast, but you still have the dividend forecast. What is the reason for this? That is several years ago, we announced our dividend policy. At that time, we said this, that is dividend payout policy. When calculating this payout ratio, Kioxia equity method holding will be removed. This has been the way we have taken. This was the way we have been operating. Therefore, even if Kioxia profits are up and down, we check the payout ratio excluding Kioxia. I see. Thank you very much. Thank you. Next, Yomiuri Shimbun, Ichihara-san. Excuse me. Please wait for a second. Ichihara-san. This is Ichihara from Yomiuri Shimbun. Do you hear me? Yes. I have two questions. For the second quarter, there was the yen depreciation and also an effect from the Forex, and it contributed to increased the profit and increased revenue. How did it impact the segments, and also what kind of risk does it pose? My second question is the China lockdown political risks. From the geopolitical perspective, and are you planning of restructuring the supply chain structure? If there's anything that is being planned, could you explain and comment? About the first question, Forex. For each business. Well, basically, for Q2 accumulated six months, the average rate is as written with the yen weakening, and it is positive, especially for the semiconductor business. Also, for the second half, JPY 140, that is the basis for the assumption. Last night there was some correction to the weaker yen, and if it trends with this level, if that is the assumption for the plan for the full year, it will have a positive effect to the semiconductor business. About China, there are various factors and elements with China. Well, it is not that at the moment immediately we are changing the operation. That hasn't decided. Of course, we are closely monitoring the situation. That is all. Thank you. Thank you very much. Next is from Nikkei. Tsutsumi-san, please. Tsutsumi of Nikkei. Can you all hear me? Yes, I can hear you. There are two questions. Now on page 22, like you have discussed earlier, the logistics cost hike, material cost hike, that, during the first quarter results announcement, you mentioned that, material cost is soaring and, toward the second half, such cost increase will be offset by the, passing on to the customers through the price. When we compare the data quarter-over-quarter, and as material cost increase as is expected, however, it seems that price increase is not progressing well on the product side. Probably the timing of passing the cost on to the customers may be lagging behind. When you raise the prices, are there any particular segments or the product groups having difficulties in raising prices? If you could elaborate on that, the first question. Second question is in regard to HDD, the market situation is aggravating and the large scale investment in data centers and others are slowing down. Are there any particular breakdown in regard to each regions or by countries? Perhaps, by customer or by, regions or, the countries, are there any particular characteristics? I will take up the first question, and in regard to the second question, Sato will answer. On page 22 in the middle of this chart, now logistics cost and the material cost increase, probably passing on to the price increases is not sufficient. To be very honest, that is simply because of the time lag. There is always a time lag for passing on the cost to the customers. In fact, our products are not the catalog listed products, to be very honest. Particularly part of the lighting products, we've changed the catalog listed price and the catalog of course bears a price list, and we've increased the tariff or the list of the prices at once. Yet, although if we change the price on paper, we have to have some time lag that the true catalog price is applied to the customer's purchase price, and that's what we do. In fact, the prices are determined based upon the negotiation on one-on-one basis with each customers, and therefore some of the contracts are stating that. In the case that the material cost rises, which is what we call inflation clause, and we include such clauses into the contract with the individual or customers, we suggest application of such clauses, and we request a price increase to the customers. Of course, customer side would need some time to discuss internally on their side. Because of this reason, there is a time lag. Therefore, if the material cost hike happened during this fiscal year, would that be completely absorbed and price increases would not be guaranteed. Now, in regard to HDD, the market slowing of the market demand, and the question would say that were there any characteristics in regard to regions? There's no regional characteristics. The demand is slowing down across the world. The U.S. large-scale data centers, they are operating. Well, think about the advertisement revenues and cloud services, and because of expected recessions, they have tendency to suppress investment. There are quite a large data center markets in China that are the data production in east side and then on the west side in China that the data is stored. Data storage sites in western part of China, a lot of the players in that area is suppressing investment. Therefore, from our point of view, the market is tightening all across the world from our point of view. Thank you very much. Thank you very much. At this point, we want to switch over to the English channel questions. Anyone with a question, please press star one. No question? There seems to be no question. Therefore, we will accept questions on the Japanese channel again. Please wait, whilst we switch the channel. We have three more people remaining. NHK, Asahi Shimbun, and Kyodo News, Mr. Yamazaki, we will move on to these three people. Many apologies, but up to two questions per person, please. First of all, Shimai-san of NHK, please. This is Shimai of NHK. Can you hear me? Yes. I have two questions. Operating income, as shown in the slides, in cost increases JPY -14.9 billion. And with the weaker yen, are some costs increasing? This is my first question. And what will be your reaction to the weak yen? What countermeasures are you taking? The second question is, in June, you announced the growth strategy, and my question is your progression according to the strategy. Under the strategy announced by [Mr. Shimada], with going forward with data and digitalization operating income, I think your number was like JPY 170 billion this year. With more data advancement and with growth strategy advancement, from this perspective, how much effects are you seeing? What is your overall progress versus the growth strategy? Thank you for your question. I think you're asking about page seven. Out of the JPY 14.9 billion in the first half, material cost soaring, out of which FX impact. I think that is what you are asking. Currently, we are in weak yen environment, and it's not just FX only. Materials themselves, costs are rising, and the supply and demand is tight due to wars and other reasons. Major materials costs are rising, and logistic costs are also rising. Of course, when the FX swings to the reverse side, and if we are buying at dollar, if in that case, the prices will subside. Then second point, data business contribution to performance. I think that was the intent of your question. This year, and starting from this year, yes, we are seeing effects and seeing numbers, but not at the level that we can introduce to you in a straightforward manner. In this year's numbers, we don't see that yet. Next year onwards, under the midterm span, we will be able to show data and service based upon data, because we are expanding this business. Next fiscal year onwards, we will start seeing generating numbers, and at some point in time, big sales and high profit margin will be also contributing to the operating income numbers. At that time, we will be introducing to you, and when we introduce and explain the next midterm plan, and in the next midterm plan presentation meeting, we will explain our plan and the numbers. Again, this is all for me. How is the progress compared to the initial plan? Setting aside the details of the plan, are you advancing? Are you keeping pace? The measures that we need to do today, for the measures for every item, we are steadily and favorably moving ahead. All the members of the staff are working very hard. In the not too distant future, big contribution to performance is expected. I see. Thank you. Thank you very much. Next, Sugiyama-san from Asahi. This is Sugiyama from Asahi. Do you hear me? Yes. I have one question about the hard disk. In relation with the hard disk, so it is about the allowance reserve made in Q1 in the press conference for the cause that is known, and it was explained that Q2, the reason, the cause, will be investigated. On slide 16, still it says that it is under discussion. The amount, I believe that it is after investigation and we already are close to knowing the cause or still it may fluctuate and increase in the future. Yes. Sato will respond. Last time, when we released the figures, we have explained that the number of returns have increased, and also that is the reason we have made the revision. I will not go into details, but between our customer, in terms of this quality issue, at the moment, the negotiation is ongoing, and what we know is what we have already incorporated all the factors that are known in a conservative manner. Thank you. Lastly, Yamazaki-san of Kyodo, please. Hello. This is Yamazaki of Kyodo News. Good to talk to you. Please. There are two questions. First question is regarding the expense costs related to special committee. During the first quarter, when you made an earnings release and JPY 13 billion was the number for the cost of the special committee. On page seven of today's slide, now the special committee cost of JPY 2 billion as listed in this chart, but 13 billion first quarter, does this JPY 2 billion include it? Yes. If you could pay attention to page 22. Now, when we explained three months ago, our annual cost is going to be JPY 13 billion. Now that was the intent of the company's announcement. If you look at page 22, second bar chart, backlog 43.3, the special committee costs of JPY 13 billion is included, as is the same as the six-month announcement. Understood. What is included in page seven, stated JPY 2 billion special committee cost is a part of JPY 13 billion? Yes. JPY 2 billion is the actual result for the first half. I have second questions. In regard to the schedule of the special committee's strategic alternative decision, would that be affected by the economic situation? Compared to the beginning of the year, the yen is depreciating to a quite extensive level, and also there's some signs of the future recessions. Such a business environment change would affect the timing with which the company decides on the strategic alternative. Right. That was quite a sensitive question. In fact, economic situation will change over time, of course. It is not just our side, but also, those who would be interested in our business would evaluate and assess dependi ng on all the situation. That is all from myself. Understood. Thank you very much. Thank you very much. With this, we would like to conclude questions and answers with the members of the media. Next, we would like to further move on to questions and answers with analysts and institutional investors. We will start with the Japanese channel first and then move on to the English channel. First of all, from the Japanese channel, anyone with a question, please press star one on your telephone. To withdraw your question, please press star two. UBS Securities, Yasui-san, please. Thank you very much. Yasui of UBS speaking. Can you hear me? Yes. First question, hard disk quality issue. The amount is quite big. At the time of the first quarter, you said, "I think we'll be over in one quarter." This is my memory. The explanation was that there are product returns. Are there returns possibilities from other customers? You say this is certain customer, but will be limited to this specific customer? Is there any assurance that the issue will be over within this fiscal year? Sato will respond. On this matter, this is an issue limited to this specific customer. This issue is not taking place at other customers. The response to the quality issue. We have been working diligently since we made announcement last time, and we are confirming on both sides what is happening. As of this stage, the information we share with the customer, and we maximize information sharing with the customer. Based upon the information we have, we have provisioned conservatively. Thank you. Any cash out items? Is any cash out happening? Just provisioning only? Yes, that is the case. No cash ou ts. Thank you. My second question is orders. If first half FY 2020 orders same level, I think there was such a chart on page 18. FY 2020 and this year first half. FY 2020 is right after the start of COVID, during the pandemic order level, where there was a lot of economic anxiety, which appears to be weak. Considering FX, this appears to be very low orders. P/B ratio-wise also seems to be very difficult. Order environment, can you explain to me in more detail, for example, where orders are not favorable? You raised P/B ratio. This order backlog, semiconductor related area where Mr. Hiroyuki Sato is responsible for is not included. Basically, this year's orders and this year's sales there, so not included in this group. Content-wise, industrial goods, energy, infrastructure, elevator, these orders are included. You said you have the impression of orders being weak, but first half 2020 we had, 2021 first half we had large energy orders received, so 2021 is outstanding. Our feeling is this year we are at a normal level, normal year level. Yes, in 2020 there was COVID that struck, but in energy and social infrastructure businesses we are in orders, COVID did not affect us that much. This is all. Thank you very much. Finally, FX sensitivity. If possible, for device and others, can you explain to me the breakdown of the FX sensitivity more in detail? In the former, with one-year fluctuation, JPY 500 million for the second half. Do we know the sensitivity by division? No, not that detailed. We don't have information by division, but broadly speaking, as explained, semiconductor related with one yen fluctuation, about JPY 600 million. Others, JPY 400 million with one yen fluctuation, or maybe less JPY 300 million. This is the general idea. With weaker yen, there are cost increases and included negatively in the FX sensitivity resulting into this result. Company-wide second half, JPY 500 million by one yen fluctuation. JPY 600 million semiconductor, was that full year or six months? Second half. So other divisions will be affected negatively? Yes. Not much sales in dollar area. We buy more in the dollar region. So other businesses, non-semiconductor will be affected negatively. I see. Thank you. This is all that I had. Next, SMBC Nikko, Yoshizumi-san, please. SMBC, Yoshizumi speaking. Thank you for this opportunity. I have two questions. First is about second quarter. For the three months. Out of the plan, some one-off factors I would like to confirm about the one-time factors. Just a rough calculation, energy related, that is about JPY 5 billion. And for printing, that is JPY 10.4 billion. And HDD, JPY 9 billion. I think roughly it is mainly the three. Is my understanding correct? I just want to confirm. Right. Well, I think you were asking the question and you responded yourself. Your understanding is correct. Thank you. My second question. Price hike, so how you're responding by the each business by segment already executed, in which areas already have been accepted the price hike? Also, if you can explain for the plans, also if there's, on the contrary, difficulties in increasing the price, if there's any area that is difficult. Yes, that will be explained by Mr. Matsunaga from the Finance and Cash Management Division. For the first half, the situation is explained on slide seven, and JPY 8.7 billion from price hike. The impact and the contribution TDSC Semiconductor are the major contributors. Also, other than that, infrastructure, as Hirata-san explained, it is by each contract and each negotiation. For building, also by changing the catalog price, and it may take some time for the customer to accept. There are some time lag. That is the situation. That is all. For example, the competition, any weaker demand and difficult to raise the price, is there any specific industry application? In terms of competition, as Matsunaga explained, for the semiconductor, our business domain, it is. There is a lack of products in the market. Relatively speaking, it is rather easier to raise the price. For the infrastructure, as I've said before, in the contract, so it does say by mutual negotiation it could be discussed. We will make our rational explanation. Of course, there is some time required for the customer to accept and discuss. We are having our customers discuss the matter. For elevator and lighting, I would assume that it is difficult to raise the price. What is the situation? For lighting, well, excluding some specific indent, we use the catalog price in many of the products. In that sense, it is rather easier. Well, still, having said that, the customer may say they want to wait for the new price to apply. I would say it is relatively easier to change the catalog price. For elevators, right, the needs of the customers is there. On our part, we cannot have the parts, and sometimes we cannot service the demands, the needs of our customers. Of course, we do mention about a price hike, but we cannot reach the stage to sit and negotiate because we are not able to meet the needs of the activities, and we're still not at that stage yet. Understood. Thank you very much. That is all for myself. Thank you very much. Next, Citigroup, Ezawa-san, please. Citigroup Securities, Ezawa speaking. Can you hear me? Thank you. On page 22, the analysis is made, and I'd like to ask questions. First is that for the fixed cost for growth, JPY -39 billion, and previously it was JPY -45 billion. What are the reasons for making changes in this regard? The first half results as well as the second half plan or forecast. In the second half, the number is going to be heavy, and in total is going to be JPY 39 billion. It seems that investment seem to be reduced gradually going forward. If that's the case, second half budget may be reduced, and perhaps the number could be smaller. Isn't that a case? I'd like to hear from you. Second question is, right next to this particular number. Now, there are factors contributing to fluctuations of the operating income, and there are some changes being made. For the change in net sales, there's no change made at the beginning. However, first half result is negative and the second half is significantly positive, and you are having such a number at this point in time. Now, I believe that the second quarter is contributing positive for the earnings power, but why do you expect that in the second half you will have the better earnings power? Now in regard to R&D, on the annual basis, as you mentioned correctly, annual number is declined or reduced a little bit. In particular, in regard to energy, we've accumulated the item to be implemented this year at the beginning of this fiscal year, and yet three months, four months passed so far, and there were some item which is not truly necessary. On the other hand, there are some additional item required, and on every month basis we are reviewing R&D. Therefore, on the whole, for the full year basis, we are leaning toward reducing the R&D expense. It is not intentional, it is just for the better performance of the R&D, and we conducted a review of what is truly necessary, and this is the result of our exercise of review. In the second half, the R&D expenses is higher than the first half, and that is the business as usual. Our company always have a such tendency. Now, we have higher proportion R&D conducted by our in-house employees, but we resort to cooperation with outside researcher and conducting R&D. Therefore, receiving an advance in short term and posting expense is not always the case. Because of the nature of the R&D, the activities will be made through the year, and results will be delivered near the end of the fiscal year. We monitor their research activity outcome, and as a result of their delivery, we will make expenses or payment. That's why in the second half R&D is higher. In regard to the change factors affecting changes, first half is 66.1 and the second half is much smaller. It is an in-house products or the custom-made products. Roughly speaking, the - 6.1 is that year-on-year, a year ago in the first half, there were some provisions applied. With the completion of the work is nearing, as a result of that, cost is reviewed once again. It seems that cost hike is not that much, and therefore, some of the provisions were reversed back. That happened in FY 2021 during the first half, but that impact is now gone. With absence of that factor, compared to the last year's results, we have some negative number for this first half. Now, in the second half, there are some opposite situation ongoing. As you remember, for the connected grids and T&D, software was contracted, however, that software was stopped. Because of the termination of the contract, we've applied a provision in the second half of the last fiscal year. Without such negative impact, in absence of such negative aspects, we have positive impact in the second half. Because of the natural disaster last fiscal year, we had stopped some of the works. That negative impact is gone in the second half of this year. Therefore, we would have positive impact. Another factor is, I'm not sure if you remember correctly, but toward the end of the last fiscal year, there were soil restoration costs, soil improvement costs of about JPY 6 billion or so provisions. We know that that provision is sufficient enough, and therefore, there will be no additional provisions in the second half of this year. These three are the key factors, which means that some of the negative impact which we had for the last fiscal year, which is no longer exist for this fiscal year. We already applied profitability analysis for the differences. Thank you very much. May I? Sorry. One point. In regard to the fixed cost for growth, may I supplement some information? Hirata-san's comment is very true and helpful when we look at each business units. But how to read this analysis chart, JPY 45 billion is reduced to JPY 39 billion. The largest effect is coming from the HDD and retail and printing. These are reclassified, and that is the largest impact. It appears to be a reduction to the fixed cost for growth, but in fact, actual investment for growth remains unchanged in how we managed the cost. Depending on the business, the timing of incurring such costs may change depending upon the situation. On the whole, the number considers to be unchanged. Just to add to the explanation. Thank you very much. Thank you very much. There is no participation on the English channel today. We have passed the scheduled time, two hands raised now. Sorry, we limit to one question per person. Two persons, one question each. First is Okawa-san of Daiwa Securities. Thank you very much. I am Okawa of Daiwa Securities. I have a question on hard disk. First quarter versus second quarter sales, JPY 90 billion, JPY 100 billion second quarter, and first half, second half, JPY 190 billion each. The explanation versus the movement seem to be different. How come second quarter is more sales so much? And in second half, do we have enough disks ex-factory? Sato would like to respond. For the second half of the year already, we are starting to acquire certifications, approvals of customers, and these customers' business will start contributing to sales. As of August, mobile, we had a conservative forecast for PCs and desktops. We thought there will not be much growth, but they are growing more than being flat. This is being reflected. Mobile and desk, desktop market condition, we cannot be optimistic. This is how we have made the forecast. I say thank you. Just one supplementary question. In the press conference of the president, you indicated, suggested there will be an explanation of the midterm plan. Will there be a presentation of the midterm plan? The next time means whether six months later, one year later, or two years later can be different time. It's not that we will never ever explain the midterm plan. We don't know when exactly. There is no specific timing determined. Sorry for causing this misunderstanding. That's all right. Sorry. Sorry for this additional question, but this is all I have. Thank you. Thank you. The final question. Tokai Tokyo, Ishino-san, we ask you to ask just one question. Do you hear me? I have one question about the NuFlare technology and the mask. The performance between first half and the second half also. Recently we see, hear about how the investment CapEx is softening, but could you explain about the environment at the moment? I am in charge of the NuFlare, and my name is Sato. I will respond NuFlare technology. Now at the moment, we are receiving very robust inquiries. First half, second half, so the robust situation of the orders that we have received. For the next fiscal year, also very good forecast and strength it remains. First half, second half, well, the number of units itself is limited, so the timing of when the revenue is booked, it could be skewed towards the first half or the second half. It may appear that way, but in general, for the full year, it is trending in a very good way. What about the balance between the sales and profit? Unfortunately, for specific company's business, the sales and also profit is not going to be specified. Thank you. Thank you for the question. Now it is time to close the briefing, and we will conclude the Q2 results briefing. Thank you very much for your participation.