Hello, everyone. Thank you very much for joining Nidec conference call. My name is Chiharu Abe, General Manager, Institutional Sales Department of Mitsubishi UFJ Morgan Stanley Securities. As we start this conference, I'd like to ask you to make sure all of the materials are ready in front of you. If not, please download the files on Nidec's website right now. Please note this call is being recorded, and the conference materials will be posted on Nidec's website for the coming week for those investors and analysts who are not able to join this call. I would like to introduce today's attendees from Nidec Corporation. Mr. Akinobu Samura, Senior Vice President and Chief Financial Officer, and Mr. Masahiro Nagayasu, General Manager, Investor Relations. At first, Mr. Samura will make a presentation. After his presentation, he will move on to Q&A session. Mr. Samura and then Mr. Nagayasu will answer your questions. Mr. Samura now presents Nidec's fourth quarter fiscal 2022 results, future outlook, and then management strategy. Mr. Samura, please go ahead. Good day, everyone, and welcome to today's conference call. I'm Akinobu Samura, Chief Financial Officer of Nidec. I'll be your main speaker today and answer your questions with the help of Mr. Hironari Iguchi as an interpreter. Please see slide three for the fiscal year 2022 full year results. As shown on slide four, net sales stood at a record high of JPY 2,242.8 billion, 16.9% higher year-on-year. Operating profit decreased 41.3% year-on-year to JPY 100.1 billion due to structural reform expenses of JPY 75.7 billion. Profit before income taxes decreased 29.1% year-on-year to JPY 120.2 billion after foreign currency gain of JPY 20 billion posted. Profit attributable to owners of parent decreased 66.9% year-on-year to JPY 45 billion after income tax expenses of JPY 75 billion and losses from discontinued operations of JPY 2 billion. We will continue WPRX, the drastic reform of profitability and aim to make a V-shaped recovery in fiscal year 2023. On slide 5 and 6, you have step charts showing the net sales and operating profit year-on-year and quarter-on-quarter respectively. As you see, slide 5, the operating profit decline roughly corresponds to the structural reform expenses in the period. As you also see slide 6, the quarter-on-quarter net sales decline roughly matches exchange rate decline. Q4 operating profit was slightly down before the effects from exchange rate and the structural reform expenses. Please see slide 8. For the fiscal year 2023 forecast, we are aiming for the net sales of JPY 2,200 billion, operating profit of JPY 220 billion, and operating profit margin of 10%. Please see slide 10. Out of the five executive vice presidents appointed by the nomination committee in March, a new president will be selected by the same nomination committee in April next year. The new president succeeds to the management position with four-year term of office as president and another four years as chairman. When the new president is selected in April next year, the current CEO, Mr. Nagamori is going to become representative of Nidec Group and board director, while the current COO Mr. Kobayashi will be promoted to CEO of the company. Please see slide 11. We exceeded net sales of JPY 10 billion in fiscal year 1985. Twelve years later, we hit 10 times higher net sales of JPY 100 billion sales in fiscal year 1997. Seventeen years later, in fiscal year 2014, we achieved another 10 times higher net sales of JPY 1 trillion. Last fiscal year, we exceeded JPY 2 trillion net sales. Going forward, we are going to increase sales and profit through organic growth and M&As with a focus on expanding markets and aim for net sales of JPY 4 trillion in fiscal year 2025. In fiscal year 2030, that is 16 years after we hit net sales of JPY 1 trillion in fiscal year 2014. We are aiming for another 10 times higher net sales of JPY 10 trillion. Please see slide 12. Nidec's midterm strategy Vision 2025 remains unchanged. That is organic sales target of JPY 3 trillion. Its operating profit margin of 15% and M&A sales target of JPY 1 trillion. Please see slide 13. We are aiming to become number one automotive system company by anticipating the strong electrification demand boosted by CASE or connected autonomous sharing electric mobility trends. In the area of EV traction motors, E-Axle business is expected to become profitable in fiscal year 2023 through introduction of Gen 2. A full targeted replacement ratio is over 70% and the cost reduction of Gen 1. In addition to this, the market areas will be shifted from China centric to global, including Europe and North America. The growth of sales and profits will be promoted strongly through focus on traction motors only and other components in addition to E-Axle. In the organic auto area, Nidec will capture increasing demand for electrification and gain further market share for motors for electric power steering and electric brake, despite slower growth in the global auto sales. Please see slide 14. The sales of EVs using Nidec's E-Axle made a rapid growth of 90% in fiscal year 2020. 100% in fiscal year 2021, and 138% in fiscal year 2022 year-on-year respectively. The number of models has reached 15, with one new model added in the March quarter. Please see slide 15. In China, the share of NEV or new energy vehicle, including both EVs and PHVs, is seeing a prominent increase until calendar year 2025. While in Europe it will be after calendar year 2025 when a remarkable increase of NEV share is recognized. The global market is expected to see NEV share of 38% in calendar year 2030. Please see slide 16. Nidec forecasted own E-Axle sales volume of 949,000 units this fiscal year. 71% or 812,000 units will be Gen.2. 26% will be value engineered Gen.1. We are targeting 10 million units sales of E-Axles in fiscal year 2030 by expanding into the European markets, et cetera, with a focus on profitability in fiscal year 2023 onward. Please see slide 17. We are targeting EV traction motor business sales of JPY 500 billion in fiscal year 2025 by supplying traction motors only and other components in addition to E-Axles. Please see slide 18. The operating profit and operating profit margin dropped significantly in the second half of fiscal year 2022 due to a massive structural reform expenses. We are preparing for a V-shaped recovery in fiscal year 2023 by building a lower cost structure. Please see slide 19. With the organic sales target of JPY 600 billion, Vision 2025, a Small Precision Motors division is transforming the portfolio by actively working on, firstly, small automotive motors for electric two-wheel vehicles and small EV motors that are less than 30 kilowatts. Secondly, thermal solutions such as cooling fans and our subsidiary CCI products. Thirdly, data home appliance motors. In HDD, we continue to focus on data centers and servers to improve the products mix for higher profitability. Now please see slide 20. Our Small Precision Motors division is preparing for mid-term growth while implementing WPRX for short-term recovery. Please see slide 21. We are going to realize high growth by capturing the innovation demand created by replacement with high-efficiency motors. The mid-term growth drivers, in the home appliance area, we offer brushless DC motors for air conditioners, washing machines and dryers, dishwashers and compressors for refrigerators to meet the increasing demand for replacement with high-efficiency motors. In the commercial area, we continue to supply motors used for commercial air conditioners and robot modules used for e-commerce. In the industrial area, we are focusing on battery energy storage solutions, essential systems in the renewable energy industry, and the joint venture business with FREYR, a semi-solid lithium-ion battery manufacturer. Now please see slide 22. We keep pursuing profitability improvement amid continued slowdown in the home appliance and commercial areas. Now please see slide 23. We have created a new business unit, called Machinery and Automation, starting from fiscal year 2023, with Nidec Drive Technology as a core company. This business unit handles reducers, press machines and machine tools, and is going to drive high growth of machinery business, and aiming for net sales of JPY 500 billion in fiscal year 2025, and JPY 1 trillion in fiscal year 2030. As mid-term growth drivers, we are aiming to gain bigger global market share of strain wave gears for collaborative robots. As for planetary gears, we set a new production base for Europe by utilizing unused facilities of Nidec Motors & Actuators in Spain. In press machines, we are focusing on anti-plastic demands and EV demands against the backdrop of a shift from plastic to canned bottles and growing demand for EVs, and launching full product lineups from small and high speed to large machines and introducing related equipment. In machine tools, we are going to expand the product lineups and the market areas with a focus on the Chinese market to seek high growth. Now please see slide 24. The operating profit ratio of other product groups remains stable at a high level of over 15% since fiscal year 2021, with exception of the March quarter of fiscal year 2022. Please see slide 25. Our subsidiary, Nidec Components, former Nidec Copal Electronics, completed the acquisition of all the shares of Midori Precision at the end of the last month. Making Midori Precision a whole owned subsidiary of Nidec Components enables the two companies to develop products jointly, based on each other's technological strengths. The Nidec group to enhance its product lineup of potentiometers and encoders. In addition, via this stock acquisition, utilizing Nidec Components' global sales channels, the two companies will deliver products across the world to meet the global demand for sensors. Going forward, Nidec Components will make gross investment in Midori Precision in a timely and appropriate manner to make the position a sensing business, a major pillar of the Nidec Components businesses. Lastly, on behalf of the entire management team, we would like to thank our customers, partners, suppliers for their support and commitments as well as our shareholders. At this time, we would like to open up the call for questions. Thank you very much, Mr. Samura. We would like to turn to the Q&A session. Mr. Samura and Mr. Nagayasu will be pleased to answer your question. Today's Q&A session will be conducted electronically. If you'd like to ask a question, please press the star key and number one on your touchtone phone. Again, please press star and number one if you'd like to ask a question. If you'd like to cancel your request, please press star and number two. We will now pause for questions from participants. Today's first question is from Mr. James Pulsford from the Alma Capital. James, please go ahead. Thank you very much indeed. You plan I think your third-generation product from June 2024. I wonder, could you comment on what are its characteristics compared to the second-generation one? After delays and problems you had with customer acceptance for Gen.2, how can you avoid this with Gen 3? When it comes to Gen 3, it is not that we're trying to avoid making any delays. When it comes to Gen 3, our initial plan was to launch the product in fiscal year of 2025. However, considering the current situations in the market, we decided to advance our schedule by a year, and we decided to launch Gen 3 in June of fiscal 2024 instead. We are going to launch new technologies for Gen 3, therefore, there is a possibility, I believe, for us to be subjected to some issues that we may have experienced with Gen 2. We will make sure to learn lessons from Gen.2 as we try to advance our schedule by a year when it comes to Gen 3. What can you make any comment on the characteristics of the third-generation product? For example, in terms of what sort of cost reduction relative to Gen.2 you target. I think the problem with Gen.2 was that your clients weren't keen to make the shift. I was wondering how you could manage that better this time around. When it comes to cost, if the cost of Gen one is 100, cost of Gen two was 65-70. When it comes to Gen three, the cost is down as much as 50 of Gen one, therefore this is a significant reduction of cost from Gen one through Gen three. When it comes to the shift from Gen two to Gen three, we will make sure that the timing is right for us to be able to introduce Gen three. That timing has to be based on our customers' period of switchover from existing model to a new model. We will base our timing to introduce Gen three on our customers' timing to introduce new product. Great. Thank you. Can I ask a follow-up separate question, which is, I gather you plan to launch a fully comprehensive E-Axle package, including various other components like on-board charger. This was written in your documents. That's also June 2024. I wonder how much demand do you think there is likely to be for this product rather than just the axle. Sort of how popular do you think that's likely to be? Can you comment also on the difference in price and potential margins that may be achievable on this greater level of sales? [Foreign Language]あ の こ の あ り が と う ご ざ い ま す 。 別 個 の 質 問 な ん で す け ど も 、 こ の E ア ク セ ル の で す ね 、 そ の い ろ ん な 部 品 を 組 み 込 ん だ E ア ク セ ル 、 全 部 の 部 品 を 組 み 込 ん で E ア ク セ ル も 販 売 さ れ る と い う ふ う に 聞 い て い る ん で す け ど も 、 い た だ い た 文 書 に よ り ま す と 、 そ の 投 入 日 も 6 月 24 日 と い う ふ う に な っ て い る と 思 う ん で す け ど も 、 今 ま で そ の 単 体 の も の と 比 較 し て で す ね 、 価 格 が ど れ だ け 違 う と か 、 マ ー ジ ン で ど れ だ け 違 う の か と い っ た 、 そ う い っ た 相 違 点 な ど も ご 説 明 い た だ き た く 思 う の で す が い か が で し ょ う か 。 [Foreign Language] 6 月 24 日 。 い や 、 24 年 。 No, no, that was a mistranslation. It's that 2024 year. Yes. [Foreign Language] え っ と で す ね 、 あ の 、 要 す る に Gen3 の 1 年 前 倒 し と 合 わ せ て で す ね 、 あ の 、 こ れ か ら メ イ ン に な っ て く る 、 要 す る に あ の 大 き さ が で す ね 、 今 我 々 100 キ ロ ワ ッ ト か ら 150 キ ロ ワ ッ ト と 進 め て き ま し た け ど も 、 こ れ か ら は 70 キ ロ ワ ッ ト あ た り 、 こ の 辺 が 主 流 に な っ て く る と い う こ と で 、 こ の サ イ ズ を 投 入 す る と い う こ と と 合 わ せ て で す ね 、 え ー 、 6in1 で す ね 、 こ う い う も の も 投 入 し て い く 考 え て お り ま す 。 When it comes to Gen 3, we try to move up our schedule by year. We will change the size of the kilowatts. So far, the mainstream has been 100 kilowatts and 150 kilowatts. Going forward, the mainstream will be 70 kilowatts. That's the type. That's the size of a product that we are going to launch. That's what we are going to do going forward. Sorry. The 70 kilowatt is going to be your standard Gen 3 products. Is that right? Is that different to the comprehensive axial package that you're going to launch? Is that correct or am I misunderstanding? [Foreign Language] E ア ク セ ル と い う 製 品 以 外 に 、 そ れ に 加 え て あ の 70 キ ロ ワ ッ ト の も の を Gen3 と し て 投 入 さ れ る と い う 。 [Foreign Language] あ の 70 キ ロ ワ ッ ト は で す ね 、 Gen2、 Gen2 の バ リ エ ー シ ョ ン と し て 70 キ ロ ワ ッ ト を 導 入 す る と い う こ と で す 。 し た が い ま し て で す ね 、 足 元 は Gen1 の 改 良 版 、 そ し て Gen2 の バ リ エ ー シ ョ ン を 広 げ る と い う こ と 。 併 せ て Gen3 の 投 入 を 前 倒 し を す る と 、 こ う い う こ と で 今 進 め よ う と し て い ま す 。 When it comes to 7 kW product, that will be a value added version of Gen.2 product. Therefore, for our as part of our immediate actions, we are going to introduce Gen.1 in a value added version of Gen.2. Plus we are going to move up our schedule to launch Gen 3 by a year. Sorry, but you didn't. The answer didn't really cover this point about the likely demand for the more comprehensive axial package, which includes DC-DC converter, on-board charger, power distributions, power distribution unit. I wonder, could you comment on that? I'm slightly confused is that product that's going to be launched then? Is that the product that 70 kilowatt or is have we got muddled up? [Foreign Language] あ の 、 こ の い た だ い た 文 書 で VCDC コ ン バ ー タ ー と か で す ね 、 あ の デ ィ ス ト リ ビ ュ ー シ ョ ン ユ ニ ッ ト な ど が 搭 載 さ れ た 、 あ の コ ン プ リ ヘ ン シ ブ な モ デ ル が 投 入 さ れ る と い う よ う な 旨 の こ と が こ ち ら に 書 か れ て い る ん で す け ど 、 そ れ が 70 キ ロ ワ ッ ト の こ と で し ょ う か 。 そ れ と も 私 の 方 で 混 同 し て し ま っ て い る 。 あ の 、 私 も わ か ら な い ん で す け ど 。 [Foreign Language] あ の 、 い わ ゆ る コ ン プ リ ヘ ン シ ブ と い う ふ う に 今 お っ し ゃ っ て い た だ い て い る の は 、 い わ ゆ る 6in1 と か 7-in-1 と い う ん で す ね 。 で 、 も と も と の E ア ク セ ル は 3-in-1。3 と い う の は モ ー タ ー と イ ン バ ー タ ー と ギ ア で す 。 で 、 6in1 と い う の は そ れ に 加 え て DC、 [Foreign Language] DC コ ン バ ー タ ー 、 そ れ か ら オ ン ボ ー ド チ ャ ー ジ ャ ー 、 そ れ か ら パ ワ ー デ ィ ス ト リ ビ ュ ー シ ョ ン ユ ニ ッ ト 、 PDU、 こ の 3 つ が 大 体 典 型 な ん で す け ど 、 こ れ ら が 全 部 入 っ て い る 。 で 、 そ れ ら は で す ね 、 [Foreign Language] 必 ず し も 70 キ ロ ワ ッ ト だ け で は な く て 、 70 キ ロ ワ ッ ト で あ り 、 100 キ ロ ワ ッ ト で あ り で き る ん で す ね 。 で 、 ポ イ ン ト は あ の 、 何 が ポ イ ン ト か と い う と 、 ト ー タ ル に 当 社 の 売 価 は 上 が り ま す 。 な ぜ か と い え ば 、 3-in-1 が [Foreign Language] 3 つ し か な い の に 、 そ れ に 3 つ の 新 し い 機 能 が つ い て い る わ け で す か ら 、 当 然 当 社 の 6in1 パ ッ ケ ー ジ の 価 格 は 上 が る ん で す が 、 お 客 さ ん の 方 か ら す る と 、 別 々 に 買 [Foreign Language] っ て そ れ ぞ れ や る よ り も ト ー タ ル な コ ス ト が 下 が る と い う こ と な ん で す ね 。 特 に 今 別 々 に や り ま す と 、 そ の 間 を つ な ぐ ハ ー ネ ス と い う の が 非 常 に 高 い の で 、 そ う い う 部 分 が 要 ら な く な る 。 そ う い う こ と に よ っ て 、 6 つ を バ ラ バ ラ に 3 [Foreign Language] つ の セ ッ ト プ ラ ス ス リ ー よ り も 全 部 が 入 っ た 6in1 に な る と 安 い と い う こ と で 、 特 に OEM は で す ね 、 今 開 発 を 急 い で い る 。 こ れ は 今 ご 存 知 の 通 り 、 今 中 国 の で す ね 、 EV、 NEV 市 場 に お い て は 価 格 競 争 が 勃 発 し て お り ま し て 、 各 社 ネ タ バ レ 走 っ て い る と い う こ と で わ か る と お り 、 価 格 競 争 が 非 常 に こ れ か ら ど ん ど ん 厳 し く な る と い う 中 で 、 い か に コ ス ト ダ ウ ン を 図 る か と い う こ と を OEM の 目 線 で 見 る と 、 6in1 を 使 う こ と に よ っ て ト ー タ ル コ ス ト が 下 が る と い う こ と で 考 え ら れ て い る と い う こ と で す 。 This is Nagayasu speaking. When it comes to comprehensive model, it's so-called a 6-in-1 and a 7-in-1 model. When it comes to the original E-Axle model, that's a 3-in-1 which comprises the motor, inverter, and a gear. A 6-in-1 model will be comprised of these three aforementioned elements, plus DC-DC converter, on-board charger, and a power distribution unit or PDU. This can be made into both 70 kilowatts and 100 kilowatts. Compared with the 3-in-1 model, price will be higher with for a 6-in-1 model. On a total basis, a 6-in-1 model will be cheaper than it will be to purchase two sets of 3-in-1 model plus three additional units. Because you know that the harness will be expensive, which harness will be a component to connect to different sets. If you think about purchasing a 3-in-1 model plus additional 3 components, 3 different additional components, it will be cheaper for you to purchase 6-in-1 model alone. What we are trying to do is to hurry up and launch this 6-in-1 model in a hurry, especially for our OEM customers. Currently, especially in China, price competition is growing more and more intensive. Therefore, cost reduction will be very key for us to able to survive in the market. We are trying to see it from the perspective of our OEM customers and trying to appeal in saying, by saying that the 6-in-1... Purchasing a set of 6-in-1 model will be cheaper than to purchase 3-in-1 model plus additional three different functions, components. Thank you. Thank you. One very last question, I promise, follow-up, which is just these extra three components, the PDU, on-board charger, DC-DC converter, will they be internally manufactured or procured from outside? This is Nagayasu speaking once again. Some of the components we will be able to produce in-house, but at this moment, it is uncertain as to whether we will be producing everything or some of them in-house or some of them will be outsourced or not, et cetera, when it comes to DC-DC converter and other components. What we need to do is to develop substrate or control board. The development of the control board or substrate will be very important. And when it comes to the motor generator and inverter and on-board charger, they need to be able to be controlled in one single control unit. Development of the semiconductors to handle all of these different components will be truly critical for us. Thank you very much. James, thank you. Next question is from Mr. Ito-san from Iwai Cosmo Securities. Ito-san, please, go ahead. Okay. Can you hear me? Yes. Yes. Thank you. Thank you. Okay. I'll ask my questions in both Japanese and English. Speaks in foreign language. The first question is, your margin for this year looks kind of conservative. Is that just being conservative or are there macro headwinds that make this a pretty appropriate target? Speaks in foreign language. The second question is, we hear news that there's a lot of inventory in the Chinese car market. Just want to understand the situation of your customers, you know, your customers of your E-Axles and how that is being incorporated into your budget. Thank you. When it comes to this operating profit forecast, if you know, exclude restructuring cost, our E-Axle business will be turning into the profit from this fiscal year. We are going to continue to launch a restructuring measures. Therefore, this current recently released operating profit figure is our forecast as of at this moment. That's my comment on the operating profit percentage. When it comes to my response to your second question, it is true that there are some goods on the inventory, due to the customer situations. We are going to make sure to take a very close communications with our customers to handle the current situation when it comes to inventory. That's our current plan. Thank you. Can I just ask one more question? you know your long-term operating profit margin target is 15%. is that something that is already being achieved by your new Gen.2, Gen.3 product pricing or 15% margin requires you know, the situation where your production volume is much higher and you are no longer spending a lot of money on you know, on CapEx? that's my sorry, my additional question. I believe you are talking about E-Axle related situation or traction motor business. When it comes to our traction motor business, as far as our 2023 fiscal year is concerned, we are trying to get into a positive territory, profit wise. In 2024 fiscal year, we are going to try to improve our operating profit ratio to close to 10% or so that we can achieve our target operating profit ratio in the fiscal 2025. When it comes to our moving up our schedule of launching Gen 3 by a year, we are trying to reduce cost very drastically. Depending on the competition, we need to check to see if there is any need for adjustment in our selling prices. That's what we need to be closely monitoring based on that market situation. Ito-san, thank you. Next question is Mr. Ramesha Nizam, from the State Street. Nizam-san, go ahead. Yeah. Can you hear me fine? Yes. Thank you very much. My question, just taking a step back and looking at our the volume guidance. Sometime back we have a volume guidance of 2.5 million, and currently we are standing at 1.5 million units for 2025. I understand we are focusing more on profitability over the volume growth. But I want to understand what are the other factors that are impacting the guidance, maybe competition and the overall EV market conditions, that might have changed over the course of last 2 years. Can you give some color on that? [Foreign Language]あ の 、 こ の ボ リ ュ ー ム が で す ね 、 あ の 以 前 と 比 べ て 変 わ っ て る ん で す け ど 、 二 百 五 十 、 二 点 五 ミ リ オ ン 。 前 一 点 五 ミ リ オ ン ぐ ら い だ っ た と 思 う ん で す け ど も 、 あ の 集 約 性 と か で す ね 、 あ の 他 に 、 あ の ど の よ う な こ と が 影 響 し て 、 こ の 数 字 の 、 数 字 が 変 わ っ て し ま っ た の か 教 え て ほ し い ん で す が 。 競 争 の 影 響 で す と か 、 あ の 市 況 の 影 響 で す と か 、 い ろ い ろ あ る か と 思 う ん で す け ど も 、 ど う い っ た 点 、 ど う い っ た 要 素 が 影 響 し て 、 こ の 数 字 の 変 化 が 、 あ 、 訪 れ た の か 教 え て い た だ き た い ん で す け ど 。 ボ リ ュ ー ム に つ き ま し て 。 [Foreign Language] ま ず 、 あ の 、 今 年 度 必 ず 黒 字 化 す る と い う こ と で 、 ま あ 不 採 算 機 種 で あ る 、 い わ ゆ る Gen1 に つ い て は 極 力 出 荷 を 抑 え る と い う こ と に な り ま し た 。 そ の 結 果 、 ま あ あ の 、 私 ど も OEM の 内 製 と か 競 合 が 増 え て く る と い う こ と で 、 そ う い う こ と が ま ず は 二 十 五 年 度 の 収 量 に 影 響 を 与 え ま し た 。 こ れ が 一 点 目 。 First, this is Naris speaking. First of all, I would like to mention that we are going to start generating profit in this fiscal year. As we try to do so, we are going to suppress or minimize the shipment of Gen1 model, which is not so profitable model. As we do so, we are trying to increase our in-house production volume and then there will be harsher competition. That's what we are going to experience in this fiscal year. [Foreign Language] 二 つ 目 は で す ね 、 あ の 当 然 黒 字 化 を す る た め に は 、 あ の 先 行 開 発 コ ス ト を 下 げ る 必 要 が あ る の で 、 開 発 費 を 削 っ て い ま す 。 で 、 開 発 費 を 削 る に あ た っ て は 、 今 申 し 上 げ た 、 ま あ 不 採 算 と い う よ り は 、 採 算 の 低 い モ デ ル に つ い て は も う 基 本 的 に 開 発 を し な い と い う こ と に し ま し た の で 、 そ の 分 の 数 が 二 十 五 年 、 例 え ば も う 生 産 数 と し て 減 っ て き て い ま す 。 Secondly, as we try to start generating profit this fiscal year, we are trying to suppress our R&D cost as much as possible. In order to do so, we need to, in principle, stop developing unprofitable models, and that is affecting our 2025 figures. [Foreign Language] 三 番 目 に 、 お 客 様 の い わ ゆ る 要 求 が E ア ク セ ル か ら 一 部 部 品 、 つ ま り モ ー タ ー だ け 欲 し い と い う よ う な と こ ろ に 、 中 国 の お 客 様 に つ い て も 変 わ っ て き て い る と い う こ と で 、 で 、 特 に ま あ 二 十 五 年 、 二 十 六 年 あ た り で す と 、 ま あ あ の E ア ク セ ル で は な く て モ ー タ ー が 欲 し い と い う こ と で 、 私 ど も の モ ー タ ー は 使 わ れ る ん で す が 、E ア ク セ ル と い う 形 に な ら な い 。 そ の 部 分 だ け 数 が 減 っ て き て い る 。 こ の 三 点 で ご ざ い ま す 。 Thirdly, our customers' demands are rather shifting somehow, especially shifting from E-Axle to motors alone when it comes to especially our Chinese customers. Therefore, when it comes to 2025 and 2026 fiscal years, some customers will be wanting not our E-Axle, but our motors alone. Is affecting our figures for 2025 and 2026 fiscal years. Yeah. Thank you. That, that's helpful. Just to follow up on that, I think we were initially planning for 6 million units of capacity for 2025, with around JPY 500 billion cumulative CapEx over a few years. With the change in the guidance now, there are any changes in planned capacity as well as the CapEx guidance? [Foreign Language] あ の 計 画 の Capacity と で す ね 、 こ の 、 な ん か ガ イ ダ ン ス に つ き ま し て 、 こ の 変 化 が あ る の か ど う か と い う こ と に つ い て お 聞 き し た い ん で す け ど も 、 あ の Capacity も と も と 6 million と い う ふ う に 2025 fiscal year に は な っ て い た と 思 う ん で す け ど も 、 あ の CapEx で $400 billion と い う 数 字 も で す ね 、 こ ち ら に 記 載 さ れ て い る と 思 う ん で す が 、 最 終 的 に こ の 数 字 変 わ り そ う で す か? [Foreign Language] あ の で す ね 、 こ の 能 力 に つ い て は で す ね 、 こ の 数 量 、 ま あ 建 物 と か で す ね 、 場 所 の 確 保 っ て い う の は こ れ 先 行 し て 進 め ま す け ど も 、 実 際 に こ う 機 械 の 導 入 で す と か 、 人 の 手 当 て と い う の は 、 こ の 仕 事 量 を 見 な が ら 、 そ の 直 前 に 手 当 て し て い く と い う や り 方 、 ま あ こ れ を こ れ ま で も 進 め て き て お り ま す ん で ね 。 ま あ そ こ に つ い て は こ れ ま で 同 様 に や り 方 変 え な い で 進 め て い く と 。 あ の こ う い う 工 場 に つ い て の 確 保 は 先 行 し て や り ま す け ど も 。 When it comes to capacity, our priority is to secure land and the buildings in order to secure our volumes. some adjustments mechanically will be done right before everything starts. Therefore, that's going to remain unchanged. Therefore, our priority remains to be to secure plants and land for our production. Is there an official guidance you can give, like in terms of capacity, in terms of units or the CapEx amount you're planning to do over the last, next few years? Can you please repeat that, please? Can you give any official numbers on how much capacity you're gonna expand over the next few years and also the CapEx? Are you referring it to traction related figures? Yeah, traction, E-Axle or traction related, yeah. When it comes to the investment, we have already started investing in advance in the scale of JPY 5 billion or even JPY 10 billion. When it comes to 2023 fiscal year, we are trying to minimize the making of any huge investment. Okay. Okay. Thank you. Last question probably, from the slide number 14 and 18. I see the E-Axle unit, volume grew 70% roughly, in Q4 year-on-year, but the revenue has declined 50% roughly. Is that there is some accounting gap between the volume shipped and the revenue booked? Can you give some color on that? When it comes to slide 18, the biggest factor is the restructuring cost, which is a huge amount. No, I'm talking about- If you exclude the restructuring cost, our profitability is actually improving. You know, I'm talking about the revenue part. In Q4, I think the difference between the blue line and yellow line, which I think is the E-Axle revenue, which has declined 50% from Q4 2021, whereas the volumes have increased. I'm asking whether there is any accounting gap between the shipments and the revenue booking? When it comes to January through March period, as stated, a few minutes ago, we have stopped the shipment of non-profitable, unprofitable models. Therefore, compared with the previous quarter or the pre-quarter before the previous quarter, or the same quarter from the prior fiscal year, the volume has declined. The bar chart on the slide 14 is about the shipment volume of models that are containing the Nidec E-Axle models. When it comes to our E-Axles alone, our share has declined by 50%. Specifically speaking, when it comes to during this specific period, you can see the figure on the number of models over here. When it comes to the models figure, 118,000 units. Compared with that, our E-Axle figure is 57,000 units. It's approximately 50% of the models figures. Okay. Thank you. Yes. Nizam-san, thank you. Next question is from Mr. John Hall, from Juncker Investment. Good evening. Thank you for making time. Hello? Can you hear me? Yes, thank you. Okay. Excellent. Hi. Good evening. Thank you very much for spending time in the evening. I want to start my first question on looking back at the fourth quarter, which area did better and which area did worse than our original budget if we exclude restructuring costs? Can you talk a bit about the macro environment impacting the various businesses and give us some color on how those impact might be playing out this coming year? Thank you. When it comes to the guidance, I believe our Small Precision Motors business performance was lower compared with the other businesses that we do. This is chiefly due to the decline in the sales of HDD motors and other products in this area. Another area that performed worse than expected was the area of machinery. It is chiefly due to product mix. The semiconductor tester testing equipment was replaced by pressing machines and reducers, and these were not as performing as they should have. Whereas our appliance, commercial and industrial businesses did better than expected in our guidance. This is partial... This is mainly due to especially industrial business, where our volume was large, increased and profitability also increased. Therefore, when it comes to volume, our SPM business is in a struggle pretty much. Our appliance, commercial and industrial businesses, and especially industrial product businesses, is going to cover the loss made by the SPM business. I believe this trend is going to continue throughout this fiscal year. Right. Thank you. within ACIM, appliance, commercial, industrial, you mentioned industrial is doing really well. Is appliance and commercial similar to what we expect? Are we seeing some headwinds on appliances, things like consumer appliances or other commercial applications? [Foreign Language]に ず れ 込 む だ ろ う と い う ふ う に 今 見 て い る と こ ろ で す 。 逆 に で す ね 、 そ れ を 大 き く カ バ ー す る 形 で 、 イ ン フ ラ 関 係 、 こ の 産 業 分 野 が で す ね 、 非 常 に 好 調 に あ っ て 、 か な り バ ッ ク ロ グ も た ま っ て き て い る と 、 こ ん な 状 況 で ご ざ い ま す 。 When it comes to home appliances, in fiscal 2021, it was performing very good. After that, there was some struggle in the housing businesses, for example. We are not really sure if or when we will be able to get rid of, go past this current struggle with our home appliance business at this moment. Our current prediction is that this struggle continue to the second half of this fiscal year. I believe, once again, this industrial business, especially in the area of infrastructure, for example, are performing very good. Therefore, they will be able to cover the loss is that is currently being incurred by our home appliance area. I see. Thank you. Also wanted to ask some follow-up questions on E-Axle. On page 16 of our presentation, we give the market a forecast of our increase in the E-Axle volume. In particular, I think we are saying that it will grow from 339,000 units to 949,000 units. Sounds like most of it is going to be in this EMEA division. And I assume most of that is out of China. Can you tell us if that's true? Can you tell us who are the new OEMs and maybe the new models that we have won the contracts, that will make up that increase of about nearly 500,000 in EMEA division or China division? Thank you. [Foreign Language] あ の 、 一 点 E-Axle に つ い て 質 問 な ん で す け ど 、 十 六 ペ ー ジ 目 の ス ラ イ ド な ん で す が 、 予 想 で は で す ね 、 数 量 が 、 あ の 、 三 三 十 九 K か ら 九 百 四 十 九 K ぐ ら い ま で 上 [Foreign Language] が っ て い く こ と に な る と 思 う ん で す け ど 、 こ れ は 中 国 の ビ ジ ネ ス 、 中 国 以 外 の ビ ジ ネ ス に な っ て い る と 思 う ん で す が 、 あ の 、 も し で す ね 、 こ の 増 加 が 、 あ 、 本 当 で あ る と い う [Foreign Language] 場 合 は で す ね 、 ど う い っ た OEM の 方 々 が 新 し く 、 こ う 、 登 場 し て い ら っ し ゃ る の か 、 ま た ど の よ う な 新 し い モ デ ル が で す ね 、 投 入 さ れ る と し て い る の か と い う こ と に つ い て お 聞 か せ い た だ き た い ん で す け れ ど も 。 [Foreign Language] あ の 、 前 か ら 申 し 上 げ て ま す け れ ど も 、 中 国 の お 客 さ ん に つ い て は 、 現 在 、 え ー 、GAC、 広 州 汽 車 、 そ れ か ら 奇 瑞 汽 車 、Geely と 、 こ の 二 社 で す け れ ど も [Foreign Language] 、 こ れ に 加 え て 、 え ー 、 ま ず は 上 海 通 用 Wuling、 そ れ か ら Chery、 そ れ か ら 長 安 汽 車 、 え ー 、 こ の 三 社 が 新 し く 、 ま あ 、 当 社 の メ イ ン の お 客 に な っ て い く と い う こ と で 、 ま あ 、 あ の 、E-Axle だ け と は 限 ら な い ん で す け れ ど も 、 基 本 的 に は そ こ の 部 分 の お 客 さ ん が 数 と し て は 増 え て い ま す 。 This is something that I've stated before, when it comes to China, our existing customers have been GAC and Geely. In addition to these two major customers, now we have Shanghai Wuling, Chery, and Chang'an. So it doesn't have to be necessarily E-Axle that they are wanting from us. When it comes to volume from these customers are increasing. [Foreign Language] 二 番 目 に 、 既 存 の GAC と Geely が ど ん ど ん 新 し い モ デ ル を 出 し て く る と い う こ と で す ね 。 で 、 こ れ は も う GAC も で す ね 、 こ の 二 十 三 年 度 か ら 新 し い 、 え ー 、 モ デ ル を 出 す と い う こ と で や っ て ま す し 、 え [Foreign Language] ー 、Geely に つ い て は す で に 前 回 か ら お 話 し し て い る ス マ ー ト EV と か で す ね 、 あ の 、 要 は 中 国 国 内 だ け じ ゃ な く て 、 ヨ ー ロ ッ パ 向 け の 、 え ー 、 新 た な モ デ ル も 始 ま っ て い る と い う こ と で 、 数 が 全 般 的 に 増 え て い る と い う こ と に な り ま す 。 Secondly, when it comes to these two existing major customers of ours, which are GAC and Geely, they are launching new models. When it comes to GAC, they are launching new models from fiscal 2023. When it comes to Geely, they are trying to launch a so-called smart EV, not for the Chinese market, but for European market. It is due to these new models that these customers, volumes are increasing. [Foreign Language] これら の 、 まあ 、 今 の GAC Group と Geely の メイン の マーケット は ミッドマーケット で 、 ミッドマーケット だけ を 見 ます と 、 実 は 2021 年 か ら 2022 年 に 約 180% 、 2.8 倍 に 実 は 増え て いる と いう 成長 を 遂げ て い ます 。 When it comes to GAC and Geely, their primary focus is on the mid market and from the fiscal 2021 and 2022, volume has increased by 180% or 2.8 times of what it used to be. [Foreign Language] で 、 今 中 国 で Tesla を 中 心 と し て 値 下 げ 合 戦 、 プ ラ イ ス ウ ォ ー が 起 き て ま す が 、 こ こ の 主 戦 場 は プ ラ イ マ リ ー 、 あ 、 そ れ で プ レ ミ ア ム マ ー ケ ッ ト と い う 、 ま あ 、 [Foreign Language] 四 万 ド ル 以 上 の 一 番 高 い 高 級 車 市 場 で 一 番 激 し く 起 き て い る の で 、 ミ ッ ド マ ー ケ ッ ト そ の も の は で す ね 、 ま だ 伸 び る と い う こ と で 、 例 え ば 当 社 の メ イ ン の お 客 で あ る Geely さ ん の カ レ ン ダ ー イ ヤ ー 二 千 二 十 三 年 の 生 産 計 画 は 昨 年 の 二 倍 と い う よ う な と こ ろ で 、 非 常 に 意 欲 的 な 計 画 に な っ て い ま す 。 When it comes to the Chinese market, especially Tesla and others are in the so-called price war. This price war is very especially intensive in the high-end market of $40,000 or more. Therefore, when it comes to mid-market, which is not really part of this price war, I believe mid-market has still has some potential for further growth in the future. When it comes to one of our major customers, Geely, they are planning to introduce models in the calendar year of 2023. That's how aggressive they are when it comes to planning new models. They are going to double the total output from CY 2022 to 2023. The point is, the mid-market is still growing and the premium market is not growing, but the both market is in China, so that's gonna be reacting. The case is that if you're looking at these GAC and Geely, they are still bullish, and they are planning a very high growth of the volume in calendar 2023 and 2024. I see. Yes, this is very good. Thank M. Nagayasu-san. The increase of about JPY 500,000 is mostly new models of Geely, sounds like. Is that correct? Yeah. The most are Geely and GAC. Okay? Geely is doubling, and GAC has not yet, but still they might be looking at maybe 180%. The GAC is planning a new model, which gonna require our Gen.2 E-Axle. I see. Is that fine? I see. Yes. Thank you. This is very clear. Can I also ask, have we seen our local competitors in China reducing their market share or maybe exiting the industry? Are we seeing that yet? They are still, you know, in the market competing? They are still hanging there. Our forecast or prediction is that before a component manufacturers withdraw from the market, I believe OEM manufacturers are more likely to withdraw from the market. Mm-hmm. Mm-hmm. I see. What about the outsourcing or insourcing trend? I know some, even Geely, have been both insourcing and outsourcing. Are they keeping that strategy at the moment, or are they outsourcing more back to us? Do you have a read on this insourcing and outsourcing trend? Okay. The time is already running out, I'm just gonna be answering two thing, okay? The number 1 is the volume is increasing, as you saw on the bar chart. That means that mean that the multi-sourcing from single sourcing to dual sourcing or triple sourcing, that's very natural in any type of the market, in the manufacturing market. Second, you know, if they are really going to win this pricing war, they need the low-cost component, low-cost E-Axle. The question is whether they can make their own E-Axle, which is lower cost than us. That we do believe that they cannot. Is that fine? Thank you. John San, thank you very much. Unfortunately, time is running out. We would like to conclude this conference call. I would like to appreciate your participation today, and should you have any questions, please do not hesitate to contact either corporation or your sales representatives at Mitsubishi UFJ Morgan Stanley Securities. Thank you very much, and, have a good day. You may now disconnect this line. Thank you.