Briefing for the Fiscal Year ending March 2024. I am, Makise from the IR and Corporate Communication. I'd like to provide you some clarifications regarding the procedure for participating in this conference. Simultaneous Japanese English interpretation will be provided for this briefing. For audio, click on the globe symbol at the bottom of the screen to open the menu. Please select the Japanese, English, or off. Off is the original audio without interpretation. As for the language of the presentation, you can select either Japanese or English from the View options pull-down menu on the top bar of the window. Please note that our presenters have their individual microphones muted due to the audio equipment settings. Please note that the audio will come from a different account than the presenter. I'd like to now introduce today's presenters: Kyoko Deguchi, President and CEO, and Frederick Reidenbach, CFO. After their presentations, we will have time for questions and answers. Now, Ms. Deguchi, the floor is yours. Hello, everyone. My name is Deguchi. I have been appointed President and CEO as of April 1, 2024. I would like to thank you for your continued support for the PHC Group's business activities. I have been involved in the management of PHC Holdings since 2021 as an independent outside director overseeing the execution of business operations. Since 2022, I have served as the chairman of the Nomination and Compensation Committee. Since April of this year, I have been working as President and CEO of PHC Holdings from an executive position, utilizing my experience and knowledge in the healthcare and chemical industries, as well as my overseas experiences, to swiftly implement measures to address issues. I look forward to your continued support. Now, today, I will provide an executive summary. There are 5 items from number 1 to number 5. First of all, number 1 is executive summary and number 4, progress and review of midterm plan. I will be explaining these two items. Number 2, FY 2023 financial results summary, and number 3, FY 2024 annual forecasts will be explained by CFO Fred. May I have the next page, please? This is executive summary. FY 2023, I would like to explain the financial results. The revenue was JPY 353.9 billion, which was in line with the previous year. This was mainly due to a decrease in sales of BGM business in diabetes management, lower sales of PCR testing in healthcare solutions, and reduced special demand for ultra-low temperature freezers in diagnostics and life sciences. This was offset by the positive impact of currency exchange and the positive effect of the acquisition of electronic medical record-related business in healthcare solutions. This is operating income, which was JPY 1.6 billion. This was due to a decrease in the BGM business with good profit margin, as well as an increased investment in the CGM business in the diabetes management segment. On the other hand, we have implemented restructuring, whose costs are being appropriated. Other than that, in healthcare solutions, we had decrease in PCR testing, and also up until the third quarter, there has been the impairment that has been accrued. Because of that, the operating profit was markedly down from the previous year. Cash-based profit attributable to owners of the parent was JPY 10.7 billion. Compared to the February forecast, it was JPY 4.6 billion less. This is because of the currency exchange, which led to more FX expenses as well as the tax expenses. Because of that, cash-based profit attributable to owners of the parent came at JPY 10.7 billion. This fiscal year's dividend, interim dividend, JPY 36, as well as the year-end dividend, which was changed from JPY 33 to JPY 18. Unfortunately, we had to review the year-end dividend. With that, the year - all the year dividend will be JPY 54 per share. I hope that you will show the understanding for that. May I have the next page, please? And this is by business. Within this fiscal year, in these three major areas, I'd like to explain the overview. There have been negative impacts as well as the positive impacts from the original plans. First, in diabetes management. In diabetes management, BGM market with a high profit margin, particularly in the developed countries, the market has been shrinking. We have been restructuring the organization, however, and the shrinkage in the developed market was more than expected, undermining the revenue and profit, as well as the profit margin, more than expected. And also, there has been the termination of partnership in the United States, but we have seen a certain level of bottoming out. In these advanced countries, we had to offset the decrease in the sales, and we are trying to increase the sales in developing countries. However, because of the difference in the profit margin, this is not enough to compensate the loss. CGM is a growth market, and the major market is the United States, so we are accelerating the investment to increase the sales. With regard to the number of users worldwide, it is still below our expectations, but, there are issues, operational issues on our side. That is why we are working toward addressing these issues one by one. On positive side, in April last year, Senseonics applied for approval. That was iCGM, but this April, it received designation by the FDA. With that, we believe that this would be able to be used for those who need to monitor continuously the blood glucose, and that will be the promising area. We are, and Senseonics is currently negotiating for business alliance with pump manufacturers. We will continue to try to expand the portfolio. That has been the diabetes management. Next, healthcare solutions. We have LSI Medience. This is where PCR testing is done. But after the boom, during the corona pandemic, the number of testing has not recovered to pre-pandemic level. This reduction in the number impacts very much our business. On the other hand, the general testing and esoteric testing, the number has not recovered to pre-pandemic level. In addition to that, there was an inappropriate incident concerning precision control charts. That unfortunately occurred, and that was leading to the lower revenue and lower profits. There is good news, Wemex. There was an M&A, with which the company expanded the customer base. Last year, it acquired electronic medical record-related business. With that, they were able to expand the customer base, and also they captured the medical DX demand. There will be e-prescription to come in the future, and we're currently preparing to address that. Wemex, thanks to the M&A, there will be further growth expected. The third thing is CRO business. This was originally with CRO, the Medience, but this was divided, and drug development support and reagent business, these were separated. That is how we are trying to ensure the growth. Drug development system was put to the Mediford that was newly established. The third is in the diagnostics and life sciences area. We have biomedical business. At one point in time, there was a special demand during the corona pandemic, which boosted the sales of ultra-low temperature freezers. But that special demand is gone, but we were preparing well in advance for that. There is a launch of new products according to the schedule this fiscal year. And also, in the United States and in Europe and in Japan, we are enhancing the sales structure. Epredia is pathology business. It has been promoting margin improvement by growing the revenue. They are doing it one by one, but they are taking time, more time than expected. This has been the overview of fiscal year 2023. What about the fiscal year 2024? This is a forecast for the next fiscal year. And this fiscal year, JPY 360 billion is the forecast for fiscal year 2024. This will be +2%, including the FX impact, or +3% excluding the FX impact. That's the revenue. contributing to that is the BGM business will further shrink in 2024. In LSIM, there was an inappropriate incident, and there would be a certain level of reduction in the revenue that is already appropriated in the budget. But in order to compensate that, we have the electronic, medical record, the business with Wemex, and this business would have the full year contribution by expanding the customer base. And also diagnostics and life sciences, there will be foundation business to grow, particularly in biomedical. Also the growth will be had in pathology business, particularly digital pathology business in Epredia. Also we will be focusing on CGT or cell gene therapy. There will be new products to be launched. The development is according to the schedule, and these products will be launched in fiscal year 2021. This would lead to the increase in the revenue of JPY 6.1 billion. Operating profit will be JPY 19.1 billion. There was the impairment loss in the previous year, so compared to that, this would be a big increase in operating profit. Of course, BGM business with high profit margin, the shrinking of the market will continue. But on the other hand, what about CGM business and pathology business? There will be the improvement in the profit margin there. Cash-based profit attributable to owners of the parent, and this will be JPY 17.5 billion. This is 64.1% increase year-on-year. In the previous year, there was an increase in the interest rate, but interest expense will be lower this year, so this will be plus JPY 6.8 billion, to be JPY 17.5 billion. Dividend will be JPY 42 on a full year basis. And this is based on policy, and we believe that this will be the 30% of the cash-based profit attributable to owner of the parent. And in the midterm, this ratio should be up to 40%. And this has been the dividend explanation, which will be JPY 54 per share. Cash-based net income is down, and also there are difficult business performances and financial situation, so we had to reduce the year-end dividend per share, making the 54 JPY per share for the whole year. This would make the dividend payout ratio to 63.7% of cash-based profit. This was March 31, 2024. March 31, 2025, the dividend will be 42 JPY per share, with the payout ratio of 30.2% of cash-based profit. Over mid to long term, there will be shareholder return to make it 40%. That will continue to be our goal. Now, individual financial results will be explained. We will review the previous year figure and next year figure, and the CFO, Fred, will be doing the explanation. Thank you, Deguchi. The next few slides- next few slides, I will walk you through the keys to the performance for this year. Next, I will help to bridge this performance to our Q3 forecast. Finally, I'll give you an updated view on how we are thinking about our fiscal year 2024. On slide 10, we have included on the left side our full year fiscal results, and on the right side, our results for the fourth quarter. Both are compared to the same period of the prior year. As you can see in the blue column, our revenue for fiscal 2023 was JPY 353.9 billion. This is a decrease of JPY 2.5 billion from the JPY 356.4 billion reported in the prior year. This revenue was calculated using average exchange rates of about 157 yen to the euro and 144 yen to the U.S. dollar. These are up from 141 yen to the euro and 135 yen to the U.S. dollar used in the prior year. This weakening of the yen did result in a favorable foreign exchange revenue impact of about JPY 14 billion. However, this benefit was offset by revenue decreases seen in several key business units, which I will go over later in the presentation. Our operating profit decreased by JPY 18.4 billion to JPY 1.6 billion. This drop is mainly due to impairment losses recorded in our Epredia business unit in Q2 and in our LSI Medience business unit in Q3. In addition, though, to the impairment, our operating profit was affected by lower revenues in our BGM business, increased investments into our CGM business, and higher one-time costs, mostly related to organizational restructurings. Our profit before tax and our profit attributable to owners of the parent company both came in negative at JPY 13.2 billion and JPY 12.9 billion, respectively. The gap between operating profit and profit before tax is due to two reasons. First, we recorded in financing costs a JPY 6.4 billion FX loss. This was principally due to the strengthening of the euro against the yen, with most of the charge recorded in Q1 and Q4. Secondly, we recorded interest expense of around JPY 8.8 billion. After adding back one-time charges, our Adjusted EBITDA decreased by JPY 15.2 billion to JPY 49.7 billion. Lastly, our cash-based profits came in at JPY 10.7 billion, a decrease of JPY 11.8 billion relative to prior year. On Slide 11, we have provided the difference between our February forecast and our actual full year results. In the middle, you can see that profit attributable to owners of the parent was down by JPY 5.3 billion from a forecasted loss of JPY 7.6 billion to an actual loss of JPY 12.9 billion. The drop was mainly due to increasing one-time costs included in operating income, additional financial expenses due to revaluation losses on euro-denominated intercompany loans, and an increase in income tax expenses. Cash-based net income was also revised down from JPY 15.3 billion to JPY 10.7 billion. This drop was mainly due to the same reasons which caused the drop in profits attributable to owners of the parent. Slide 12 shows the quarterly trend of our revenue and operating profit. As I have explained in previous quarters, Q1 tends to be our slowest quarter, and the numbers tend to increase from the second quarter to the end of the fiscal year. Spending from U.S. and European customers typically gains momentum starting in July, reaching their peak during the October to December quarter, with Japanese-based customer spending accelerating from our third quarter, with the most significant growth coming in our fourth quarter. This trend from our Japanese customers, coupled with growth in our healthcare solutions business due to additional demand for their online eligibility check system, and an increase in revenue and an improvement in the profit margin in our diabetes management segment, is what drove the growth in Q4. Excluding the impact of impairment losses recorded in Q3, these items together resulted in an increase in revenue in Q4 of JPY 7.4 billion, or 8.2%, and an increase in operating profit in Q4 of JPY 2 billion. Slide 13 shows our revenue performance across the five business units within our three segments. Our diabetes management segment reported revenue down 2.5% year-on-year to JPY 109.1 billion Our healthcare solutions segment reported a 0.1% year-on-year decrease in revenue to JPY 133.4 billion. Within the segment, our healthcare IT solutions business reported a 16.6% year-on-year increase in revenue to JPY 44.2 billion, but this was offset by a 6.8% decrease in LSI Medience's revenue to JPY 89.2 billion. A portion of the change within this segment was due to the transfer of LSI Medience's health checkup support business to Wemex. Lastly, our diagnostics and life sciences segment saw revenue increase 0.3% year-on-year to JPY 109 billion. Within this segment, our previous business reported revenues up 8.8% year-on-year to JPY 53.8 billion, but this growth was offset by a 6.9% year-on-year decrease in our biomedical business's revenue, which came in at JPY 55.2 billion. This drop was mainly due to lower COVID-related ULT sales this year relative to last year. I will go over each segment in more detail later in my presentation, but first, on slide 14, I want to go over a bridge chart that helps to explain the year-on-year change in our revenue and operating profit. In the top chart, you can see that our revenue, excluding a net positive COVID-related headwind of JPY 5.9 billion, was down 3% year-on-year. The growth in our healthcare IT solutions business, which includes revenue from the FUJIFILM Healthcare Systems, EMR, and medical receipt systems-related business, which we acquired in October of this fiscal year, was not enough to offset the weakness we saw in our other business units. In the bottom chart, you can see that our operating profit, excluding a net positive COVID-related impact of JPY 1.9 billion, decreased from JPY 18.1 billion to JPY 1.3 billion. This result was due to a combination of factors. On the positive side, we saw savings of about JPY 4.3 billion in our headquarters costs, most of which relates to early retirement programs offered in Japan and the downsizing of our U.S. headquarters during Q1 of the previous fiscal year. In our diagnostics and life sciences segment, our operating profit increased by JPY 8.7 billion. Included in these results is a profit reported on the sale of an investment, but part of this profit was offset by impairment taken on our Epredia business in Q2. These positive items were offset by a JPY 17.3 billion drop in our healthcare solutions segment, most of which is from the impact of the impairment recorded in Q3 on LSI Medience. We saw a JPY 12.5 billion drop in our diabetes management segment, most of which is due to an acceleration of the decline we have been seeing in our BGM business in the U.S. and Europe. A rise in one-time costs, mostly related to organizational restructurings, and lower sales in our CGM business, despite planned investment increases. From here, I will get into a little more detail around the breakdown of revenues and operating profit by segment. First, diabetes management. In the diabetes management segment, revenue came in at JPY 109.1 billion. It's a decrease of 2.5% year-on-year, despite positive FX impacts of JPY 6.7 billion. In the BGM business, we continued to see declines in sales in developed markets in Europe and in the U.S. due to the termination of the sales collaboration agreement, which we have been reporting on during the current and previous fiscal years. Sales of CGM product, while increasing versus prior year, continued to trail behind plan. These sales misses were partially offset by our IVD business, which continued to report growth in sales of motorized drug delivery services. The 42.7% year-on-year decline in operating profit from JPY 26.7 billion to JPY 15.3 billion is what drove the segment's operating profit margin down to 14.1%. This drop continued to be due to the same four factors I noted last quarter. First, we continued to make investments to reinforce the sales force and marketing of our CGM product. Second, the business continued to see a change in the BGM sensor channel mix from developed to developing markets. Third, there continued to be a change in a product mix as we continued to see increased sales of lower margin IVD and CGM product at the expense of reduced sales of higher margin BGM product. And lastly, we incurred one-time expenses of JPY 5.1 billion due to organizational restructurings, which included the streamlining of our BGM business. These expenses were partially offset by a one-time gain of JPY 1.8 billion, recorded in Q4, related to an IP license settlement. For your reference, as you can see at the bottom of the slide, the segment's Adjusted EBITDA was JPY 25.9 billion. This is down from JPY 37.2 billion reported in the prior year. Our healthcare solutions segment saw a slight revenue decrease of 1.1%. This was driven by LSI Medience, which saw a drop of 6.8% year-on-year, due to the continuation of the decrease in COVID test counts. The shortfall in LSI Medience's revenue drop was offset by a 16.6% year-on-year growth seen in our healthcare IT solutions business. This business did benefit in the first half of this year from the continued pressure on the industry by the Japanese government to complete the rollout of the online eligibility check system. In Q3, the business began to see some demand resulting from the start of e-prescription operations, and in Q4, the business reported additional revenue from the online eligibility check systems. These benefits, coupled with inorganic revenue growth in the second half of fiscal 2023, coming from the FUJIFILM Healthcare Systems business, which was acquired in October of this fiscal year, is what drove the 16.6% growth. The drop in the segment's operating profit from JPY 9.8 billion to a loss of JPY 9.2 billion was mostly due to the impairment loss of JPY 14 billion reported in Q3, and from the impact of decreases in the volume and profitability of PCR tests within LSI Medience. Like in prior periods, these drops could not be offset by growth in the healthcare IT solutions business, as despite the increase in sales, this business continued to see increases in procurement costs. For your reference, you can see at the bottom of the slide that the segment's adjusted EBITDA was JPY 17.1 billion. This is down from JPY 22 billion reported in the prior year. Finally, our diagnostics and life sciences segment's revenue of JPY 109 billion increased 0.3% year-on-year. This growth was due to a positive FX benefit of JPY 6.9 billion. Excluding this benefit, the segment's revenue came in at JPY 102.1 billion. Within the segment, our biomedical business continued to be successful in raising prices. However, these increases were not enough to offset lower demand for COVID-19 related ULT shipments relative to the prior year, or the impact of restrained capital investments and inventory adjustments by our customers outside Japan due to concerns over inflation and a potential global economic slowdown. Our Epredia business within the segment faced the same impact of restrained capital investments and inventory adjustments on capital equipment sales, but the weakness in this business was offset by continued growth in sales of consumable products. The business also saw a rebound from lost sales due to the factory lockdown in Shanghai in the previous year. It recorded positive benefits from FX and price increases, and it recorded inorganic revenue from M&A transactions. The segment's operating profit came in at JPY 6 billion. Both the biomedical and Epredia businesses continued to work to pass on increased costs to their product selling prices, but not all of the cost increases could be offset with higher prices. This increase in cost, coupled with lower COVID-related demand for higher margin ULT freezers as compared to the prior year, are the main factors which drove down the segment's operating profit. Another factor was one-time profits and losses, which included a JPY 8.7 billion impairment loss in fiscal 2022, and in fiscal 2023, a JPY 2.7 billion one-time profit recorded on the sale of an investment, and an impairment loss of JPY 2 billion on our Epredia business, both of which were recorded in the first half of this fiscal year. Again, for your reference, you can see at the bottom of the slide, the segment's adjusted EBITDA came in at JPY 15.2 billion, is a decrease from JPY 16.1 billion reported in the prior year. Slide 18 shows a revenue breakdown by region. Japan reported revenue of JPY 150.5 billion. This was down 0.2% versus prior year, with the shortfall mainly due to the decline in PCR testing at LSI Medience. The EU region reported revenue of JPY 85.8 billion, a year-on-year decrease of 5.5%. This drop was mostly due to weaker sales in diabetes management's mature markets in the EU region and in our biomedical business, which delivered fewer ULTs this year compared to prior year, due to the loss of special demands. The North American region reported revenue of JPY 75.4 billion, up 0.7% year-on-year, but this was due to a favorable FX benefit. The drop net of the FX benefit came from weaker sales in our diabetes management business in the U.S. due to the termination of the collaboration agreement we have been reporting on. Lastly, sales in other region, which include APAC as well as the Middle East and Africa, rose to JPY 42.2 billion, an increase of 5.6% year-on-year. In this region, we saw strength in drug development support business, and growth in emerging markets in our diabetes management segment. Slide 19 provides a reconciliation between operating profit and adjusted EBITDA, and a conversion of IFRS reported profit attributable to owners of the parent to a cash basis. As shown in the top chart of the slide, the only material item between operating profit and EBITDA continues to be depreciation and impairment. Depreciation continues to decrease year-on-year, as capitalized intangible assets in our diabetes management segment continue to become fully amortized. Most of the JPY 16.7 billion impairment is made up of the JPY 2.1 billion impairment reported in Q2 at Epredia, and the JPY 14 billion impairment reported in Q3 at LSI Medience. Between EBITDA and adjusted EBITDA, I would like to point out the largest items. First, in the diabetes management segment, there was a JPY 5.1 billion charge from organizational restructurings and a JPY 1.8 billion one-time gain related to an IP license settlement. Secondly, there was a profit of JPY 2.7 billion reported in the diagnostics and life sciences segment on the sale of one of our investments. And lastly, we incurred costs of roughly JPY 1.1 billion in the HQ, most of which are related to the cost of the business reorganization within the group, which I will go over shortly. Other than these items, there are no other material one-time items to report. On the bottom of the slide, we have disclosed the profit attributable to owners of the parent company on a cash basis. Adjustments from the IFRS presentation includes amortization expense from M&A-related intangible fixed assets of approximately JPY 10.8 billion, and the JPY 16.7 billion impairment charge recorded mostly on Epredia and LSI Medience. After adjusting for these two items and the related tax benefits, our cash-based profit came in at approximately JPY 10.7 billion, lower than the JPY 22.5 billion reported in the previous fiscal year. The lower cash base profit is mainly due to increased FX losses and lower operating results. Let's now move on to the balance sheet on slide 20. In the asset line, other than the JPY 13.9 billion decrease in cash to JPY 47 billion, there were no other material changes in our total current or non-current assets. A bridge explaining the decrease in cash is provided on slide 21. Similarly, there were next to no changes in our total current or non-current liabilities other than the change seen in our total loans payable. The drop in the long-term portion of loans payable from JPY 262.4 billion to JPY 248.1 billion was mainly due to refinancing of U.S. dollar loans to yen in Q1, and repayments of borrowings. But these decreases were partially offset by an increase in the carrying value of loans, mainly due to currency translation. Lastly, you can see that the decrease in our adjusted EBITDA versus prior year's result caused our net leverage ratio to rise from 3.6x at the end of fiscal 2022, to 4.8x at the end of fiscal 2023, and our gross ratio to rise from 4.5x to 5.7x. Slide 21 shows a bridge explaining the JPY 13.1 billion decrease in cash. In summary, operations generated cash of about JPY 41.3 billion. Of this, about JPY 21.1 billion was reinvested in the business. In addition, JPY 39.1 billion was used in financing activities, of which JPY 21 billion was used to repay debt and JPY 9 billion to fund our fiscal 2022 year-end dividend and our fiscal 2023 interim dividend. CapEx and prepayments for acquired subsidiaries came in at. I'm sorry, JPY 14.6 billion and JPY 11.5 billion, respectively. But these payments were partially offset in investing activities by proceeds from the sales of an investment in Q2. From here, we'll explain the forecast for fiscal 2024. On page 23, we have provided a high-level look at our fiscal 2024 outlook. On the top line, we are forecasting a slight increase of approximately JPY 6.1 billion to JPY 360 billion. Drivers of this increase are explained in more detail on the next slide. On the operating profit line, we are expecting a recovery to JPY 19.1 billion, up approximately JPY 17.5 billion. On an upcoming slide, you will see that this increase is principally due to the unwinding of the impairment loss of JPY 16.7 billion, offset by a decrease in our diabetes management segment, most of which is from the BGM business. We are increasing profit attributable to owners of the parent by about JPY 23.2 billion to JPY 10.3 billion. This take up is equal to the increase in profit before tax of JPY 27.1 billion, impacted by an increase in tax expense. The net of the above results in about a JPY 6.1 billion increase in our cash-based profit, and as Deguchi-san explained in her section, we have decided to forecast a full year dividend for fiscal 2024 at JPY 42 per share. Slide 24 shows a bridge chart, which explains the changes in revenue from fiscal 2023's results and fiscal 2024 forecast. In the interest of time, I will skip detailed explanations for this bridge, but Yamaguchi-san or I will be happy to answer questions on this and the rest of the forecast later. Slide 25 shows a comparison of fiscal 2023's actual operating profit with fiscal 2024's forecast. On the right side, you can see we are forecasting an increase in operating profit from JPY 1.6 billion in fiscal 2023 to JPY 19.1 billion in fiscal 2024. This increase is mainly due to a decrease in impairment losses of JPY 16.7 billion. Within the bridge, though, you can see two things happening. First, there is a JPY 6.7 billion drop in the diabetes management segment, most of which is from our BGM business, as we still do not expect the increase in our CGM business to be able to offset this decline. Secondly, an increase in other segments of JPY 5.3 billion. This increase comes from a combination of sales growth, price increases, and cost savings, which have been put in place to address current issues. As I will explain in a moment, we have reclassified how our business units fit into our business segment beginning in fiscal 2024. To allow for comparison between fiscal 2023 and fiscal 2024, the reclassified figures for fiscal 2023 are included on this slide for reference purposes only. As this is similar to what was just explained in the previous slides, I will also skip this slide in the interest of time. On slide 27, I would like to provide a little more clarity around the quarterly balance of our revenue and operating profits for fiscal 2024. As you can see on the right side of the slide, we expect a quarterly unbalance for operating profit. There are several reasons behind this. First, seasonality. As I have explained in a previous slide, spending from customers tend to gain momentum from the second half of the year, starting in July, reaching its peak during the October to December quarter for U.S. and Europeans, and for Japanese customers, with most of the growth coming in the fourth quarter. This leaves Q1 as our weakest quarter. Secondly, we expect the slow pace of investments into capital equipment by medical institutions and our life sciences and diagnostic segment to bottom out in Q1. A rebound after Q1, coupled with the launch of new products within this segment in the second half, will drive growth in fiscal 2024, but it does mean that we will see weakness in the first half, especially in Q1. Lastly, we do expect some of our business units to see incremental revenue growth and expanding margins, such as the diabetes management segment, where we expect a positive impact from the growth of CGM sales. But again, this will also come towards the end of fiscal 2024. These trends, coupled with the decline we expect to see in BGM, the loss of special demand for the online eligibility check system in the healthcare IT business, and forecasted weaker performance in our biomedical business, does mean that Q1 of fiscal 2024 will be particularly low, especially when compared to the prior year. Slide 28 shows the reclassifications we are making in our business unit with effect from April 1. There are two main changes. First, we have combined in the diagnostics and life sciences domain, the IVD business unit previously reported in the diabetes management domain, with the diagnostics, reagents, and instrumentation business previously in LSI Medience. Secondly, the drug development support business, previously in LSI Medience, is now under the CRO, CRO business in Mediford, which was established in November last year in our healthcare solutions segment. Finally, on slide 29, we have provided a top-level exchange rate sensitivity guide. We have listed only U.S. dollars and euros, since these with yen are again forecasted to continue to make up approximately 85% of the group's revenue and 90% of the group's operating profit. For every one yen of depreciation, we would expect to see an increase of approximately JPY 400 million versus the euro, and JPY 500 million versus the U.S. dollar in revenue, and an increase of JPY 60 million versus the euro, and JPY 25 million versus the U.S. dollar in our operating profit. I will end my presentation here, but before turning the floor back to Deguchi-san, I would like to end on a personal note. As announced today, effective July 1 of this year, I will be leaving PHC Group and stepping down from my role as CFO. At that time, Chief Strategy Officer Kaiju Yamaguchi will be assuming the position of CFO. I worked closely with Yamaguchi-san for the last five years, and I am confident that his leadership and experience will help take PHC Group to the next level. It's been a great pleasure and an honor to serve as CFO of PHC Group during important moments such as our IPO. Before leaving, I do want to express my sincere gratitude for all of your support during the last five years. Thank you. And with that, I will turn it back to Deguchi-san. Thank you, Fred. Now to review the current mid-term plan and explain the direction of future revisions. We actually announced the VCP, and, looking at, the current situation, we have, about, JPY 360 billion revenue expected, but, it is, still, much lower, than, the VCP number. And, the same goes to, the operating profit. There is still a large gap, from the VCP OP numbers. Therefore, once again, here, we wanted to review, the, VCP or our mid-term plan. So first, about the review. Looking at this three-year plan, there are, things who went, on as part of the plan and who, other things which couldn't, follow the plan. We have been negatively impacted by the volume decrease due to the slowdown of the business in the European and American markets. And also, we had the increasing expenses due to rising interest rate, FX inflation, and so on, which had negative impacts. However, in the past two years, we made some progress, too. First, we conducted LSI Medience restructuring, establishment Wemex, transfer of health management business. Within the group, we could build a structure for growth. In healthcare IT, Wemex will be in charge, and that company was newly established. And, by the acquisition last year, we expanded our customer base and online-... qualification checking system and e-prescription, those medical DX, demand should be captured, so that we'll be able to grow the business. In biomedical, there have been economic slowdown in Europe and the US, and a decrease in special demand for COVID-19. We know this beforehand, therefore, we have been raising prices and launching new products. New products is the one that is a live cell metabolic analyzer using our own technology, and with that, we will enter into the new CGT cell and gene therapy area as a new field. On the other hand, there are challenges. In BGM, the shrinkage of the BGM market in developed countries, particularly in Europe, will continue. It will be bottoming out. However, more than we expected, a shrinkage has been taking place in developed countries, and on behalf, CGM business are emerging. We'd like to prepare for, for the launch of new products, and we'd like to expand our sales. However, CGM's sales volume haven't reached to our initial planned numbers. And, there, we do have some newly hired executives who has expertise in this industry, and their report directed to me, and we would like to make corporate-wide efforts to make a turnaround. In pathology business, we suffered from a slowdown in market growth due to the cautious investment stance of the medical institutions, mainly in the European and U.S. markets in the past two years. This year, it's not recovering yet, but toward the second half, we estimate that there will be a recovery, and we are taking actions, including digital pathology, new DX, or making use of new technologies. We'd like to strengthen our product competitiveness. However, our situation is not reaching to the original plan. Profitability has been improving year after year. However, it hasn't reached to the level of turning around. LSI Medience, non-clinical testing, we haven't seen any recovery to the pre-COVID level. That's something quite different from our original estimate. Also, we had some inappropriate management issue over precision charter control. As a result, volume and profit contribution couldn't be made as we planned. These are the issues we have had. So we reviewed those issues, and I believe that they can be boiled down to the three issues on the right. First, we need to strengthen the cash flow generation. Second, we need to improve the capital efficiency. Given the input to capital, how much return is achieved by each business unit? We need to severely review that result. And thirdly, there are eight businesses, and those eight businesses and the three growth areas, in those way of segmentations, we have been operating the business. And there, what are the true growth areas which will drive our overall business? I think we need to, once again, review all those, once again, strictly. So these are the issues identified. Going to the next slide. As top management, we would like to take the following three steps. First is restructure to enhance earnings base. We believe that enhancing our cash generation capability and improving the financial stabilities are urgent tasks. In FY 2024, I think, this is one of the largest issues for us, and at the same time, we need to improve, portfolio management. Capital cost has to be more, keenly aware, and we will introduce ROIC management. Against the input investment, how much return will be gained? We monitor this, and the three growth areas are expected to grow in the previous midterm plan, but we would like to promote, selection and concentration. Going beyond that is a focus on to growth areas. We will focus more management resources to diagnostics and, life sciences, and, we would like to, focus managerial resources into, the emerging, potentially future growing areas. In terms of timeline, currently we have a midterm plan, but that will be reviewed because we need financial situation to be rectified right now, and we need to have a stronger cash generation power, and we need to be more selective and concentration, so we'd like to conduct restructuring. We have been conducting restructuring in each business unit for the past several years, but this time, across the companies, we'd like to stabilize our financial capabilities so that we'll be able to achieve more capital efficiency. And we believe that that initiative will require one year and a half, and we will strengthen portfolio by selection and concentration. And then we will identify the growth areas, which will be a future driver of PHC, and we'll be focusing on those growth areas. The specific, midterm plan and, the numbers in November, this year, we would like to make an announcement. There, we would also like to explain and direct capital allocation, how much capital will be allocated where. That's planned in November this year. Going beyond that, what is ideal state? We would like to, generate, stable cash generation, and, also we'd like to be focusing around, the diagnostics and life science. Our strengths is, the expertise in sophisticated, precise manufacturing, such as we can say examples in, the blood glucose monitoring system. And also, we need to make use of a diverse product portfolio. We have, built a global network to healthcare professionals, and also we do have a PHC human resources to support them. Representing them, all the new entire management team, we will do our best. I'd like to ask for your continued support. Thank you very much. Thank you. We will now move on to Q&A session. Koichiro Sato, Executive Vice President and COO, Kaiju Yamaguchi, Chief Strategy Officer, will join us as respondents. If you have questions, please click on the Raise Your Hand button at the bottom of the screen. When I read your name on the screen, the microphone setting will be changed. Once the microphone is on, please state your name and your affiliation. Each person, I will call your name in order of your hands. Mr. Yamaguchi, please unmute and ask a question. Can you hear me? Yes. This is Kaiju Yamaguchi. I have two questions. You mentioned about the VCP, which will be reviewed, which Ms. Deguchi mentioned. You said you will be focusing on diagnostics and life sciences. You have various businesses, amongst which, considering the competitiveness, you will be focusing on this segment. Although you have been focusing on many areas, but you change the tactic strategy and focus on where you have the strengths, and you do not do much in the area where you are not strong. So is my understanding correct? Thank you. I will answer your question. As I have explained, we will be focusing on diagnostics and life sciences. That's what I said. As we move, we will introduce the ROIC, that is, the return on invested capital, and we'll also see the market growth per se. So these are the two pillars with which we would like to assess the eight businesses, just as you asked in the question. We will consider the allocation of our resources, and there will be the concentration on some of the areas. Another question: BGM CGM sales figures, -JPY 8 billion versus +JPY 2.5 billion. I believe that the CGM at the start, +JPY 4 billion, but previous year performance and this year, performance focus is +2.5. So this is, CGM sales, and could you please comment on the CGM performance? I will be answering. My name is Sato. With regard to the previous year, it was focused on 180-day product, but as I have mentioned, in terms of the operation, there has not been an improvement as much as we expected, and that was one reason why sales were not as we targeted. But in the latter half of the year, there has been improvement. So as we move into the fiscal year 2024, that improvement will be reflected. That is why we have this business plan. Also, in the second half of this fiscal year, 365-day will be come onto the market, and that is also reflected in the budget. Thank you. Thank you. Next, Mr. Akinori Ueda, please. I'm Ueda, Goldman Sachs Securities. My first question is about the LSI Medience inappropriate management. How you incorporated that into your plan? Overall, LSI Medience is expected to grow. And, is this impact marginal or, I think you can see, to some degree, the bidding situations and so on. So whether or not, this, impact is incorporated in plan, and if so, how? Please explain. Thank you. Yamaguchi would like to answer. In FY 2024 business plan preparation, the existing impacts in bidding, those were incorporated, and also in bio. But the second half, we believe that we'll be able to see improvement, including the certificate or qualification as side. Therefore, currently, any visible downside are incorporated. However, toward the second half, our expectation is that we'll be able to get it recovered. Thank you very much. Second question is about diabetes management, CGM business. Patients harvesting or conversion rate, whether or not it's coming up or not, please tell us what is the current situation? If I give you an answer, conversion ratio has been increasing. Lead acquisition, first of all, the lead quality has been improving. This is inside sales, data-driven, and there are a high conversion rate group that segmented area, so that we'll be able to make an approach in a concentrated manner. As a result, the conversion rate has been improving. Secondly, online prescription system is implemented. As a result, a cycle time is shortened. That also prevents patients leaving our system. As a result, the conversion rates are also improving. Thank you very much. Understood. Thank you very much. Next is Seiji Wakao. Please unmute and ask questions. This is JP Morgan. My name is Wakao. I have a question about diagnostics and life sciences. Diagnostics and life sciences, that will be your focus, that what you said, because this has a possibility for growth considering the current state. But when we see the track record, well, probably this business is better than others on the relative basis, but I do not know on absolute basis whether it is really good, because I'm looking at the track record. What were the good things about this business? And in FY 2024, in diagnostics and life sciences, the growth, you said, but where does it come from? Does it come from Epredia or biomedical? Could you please tell me the details? Thank you. Overview, I will explain, and the details will be explained by Yamaguchi. This is diagnostics and life sciences. First of all, the market will have a stable growth, and also there is relevance to DX. This is where DX is ongoing. We can utilize our precision technologies there. So that's our judgment. Just as I have mentioned, we will introduce ROIC and to improve the return on investment. So with that, specifically, which business will be the subject for more investment, where we have the priority? So market growth rate and the DX implementation in this segment, that was the reason. Amongst our businesses, last year, we had biomedical and Epredia and diagnostics, these businesses. When we consider these businesses, these are in the diagnostics and life sciences. So other businesses may come in and go out, so there can be a reclassification. But amongst our products and businesses, which will grow and which will lead our performance? Cell gene therapy or CGT, that is particularly important in oncology. This should grow according to the market survey. That is all. We have the digital pathology business in Epredia, and that's one thing of our strengths. And also, we have the live cell monitoring, which is to be launched at the end of the 2024 fiscal year. So there will also be a growth there. That is why we believe that we have the foundation for growth. We have Epredia and biomedical. These have synergies, and they have the common products, and they do the after service together. And that is why they can have synergistic effect by collaboration within the segment between the business, and thereby further enhancing the profit ratio. Yamaguchi will do the follow-up. Last year, with regard to biomedical, there was an ultra-low temperature freezer. The special demand is gone, and particularly, this was true in FY 2023 second half. Market CapEx was slow by our customers. So overall in FY 2023, Epredia was better than biomedical. But having said that, fundamentally speaking, in FY 2024, the market, the CapEx in the calendar year second half, the CapEx will return from our customers. And also, with regard to biomedical, we have the existing area where we are constantly introducing new products, so there will be additional benefits from here. And also, M&A is another thing, and just as Deguchi mentioned, there will be new product to be launched in the new area. So that will be the top-up from what we have already mentioned. And also, with regard to Epredia, currently there is an impact of slow CapEx, but we will focus on the digital pathology and we will grow in FY 2024. Biomedical will have a bigger contribution than Epredia in terms of concrete numbers. Thank you. This is a follow-up. You mentioned Biomedical. You do you have biotech customers? Because biotech funding is deteriorating, and probably that could be the top risk. But what about in your case? First, global. Yes, we have biotech customers. We have the big global pharmas and biotechs. They are our important users. That is why I just said when it comes to biotech ventures, the funding situation impacting our performance in the second half. In, and in the first half, what about the second half in FY 2024? There could be a certain level of risk, but we believe that the situation will be improved. And also, amongst pharmas, there will be an improvement in the market situation in FY 2024 from FY 2023. Let me augment one thing: It is not just biotechs, but also we have the research laboratories, who are also our customers. And so in academia, biomedical products are being used. That is why if it is biotech only, that is not a risk diversification. And so biomedical is expanding the channels in all these areas. Thank you. So these are all the people who raised their hands. Thank you very much for your questions. With that, I would like to conclude.