Hello, everyone. I am Shinada, Masahiro Shinada from Panasonic Corporation. My voice might sound a bit nasal, but I hope you will bear with me. Once again, thank you very much indeed for coming to this Individual Business Strategy Briefing of Panasonic Corporation. Appreciate your attendance. I would also like to thank you for your support and patronage for our company. Thank you very much indeed. Now, this is today's agenda. In June, we had an IR Day, and for the first time as a new Panasonic, we had this IR Day. We talked about overall strategies as well as the strategies of the three divisional companies. Today, we will talk about some of the updates of the overall strategy as well as European growth strategy for HVAC Company. At the same time, we will also announce the medium to long-term strategy for Cold Chain Solutions Company, CCS and China and North Asia Company CNA. We will have the presidents of each divisional company to present. Now, as we announced in Q2 business results, the China business was excluded from the scope of consolidation of CCS to eliminate the double counting. Today, we will be presenting based on this reclassification. As for this reclassification, this reflects the change of the positioning of the Cold Chain business in China. The Cold Chain business in China, for that, we have our partner in China, and we have transferred some of the businesses to the partner. We have made a decision that it is appropriate for this local entity to take the leadership in the management. In CCS, CCS will focus their resources to Japan and North America, which are the priority areas to enhance their competitiveness. Now, let me talk about the overall progress. I'd like to follow this structure that you are seeing right now. The first-half, I would review the first-half of fiscal 2023, and the second half is the progress status of the medium to long-term strategy. Let me start with the review of the first-half of fiscal 2023. This slide shows the overview of the medium to long-term strategy that we explained in June. On the left, we have the most important theme for three-year medium-term, the profit growth in seven priority businesses, company-wide operational reforms, and implementation of ESG and IR into the management strategies. As a KGI for fiscal 2025, those are listed on the right-hand side, EBITDA of JPY 350 billion, ROIC of 10% or more. In addition, the three-year cumulative operating cash flow, JPY 660 billion. In order to achieve those goals, we are making progress, and I'd like to explain to you the progress that we made in six months. This slide shows the trend of sales and EBITDA year-on-year comparison by quarter. As you can see, in Q3 fiscal 2022, the sales and profit declined year-on-year. From Q4 of fiscal 2022, the sales started to increase, and the profit decrease trend stopped. From Q2 of fiscal 2023, the profit started to increase. Let me go into the details of Q2 of FY 2023. Now, concerning Q2 of 2023, this is the year-on-year EBITDA changes and factors. First of all, the growth of priority businesses such as HVAC systems and overseas electrical construction materials led to the sales increase, pushing up the EBITDA by JPY 21 billion, which is shown as number one. Deteriorating external environments such as higher raw material prices and logistic costs and forex pushed down the EBITDA by JPY 23.5 billion. Operational reforms, including the price revisions and cost structure reform, pushed up the EBITDA by JPY 20.9 billion. That is shown as number two. In addition, there was a reduction of the restructuring expenses, and overall, EBITDA increased by JPY 23 billion year-on-year. Especially, deteriorating external environment was offset 89% by operational reforms. This led to the higher profit. Next, on this slide, number one is the profit contribution by growing priority businesses, and also number two, the recovery through operational reforms. Let me now go into the specifics of those two. Here is the year-on-year comparison of the trend of profit from increased sales by quarter. The chronological trend is shown from Q3 of FY 2022. The main factors, the increase and decrease factors are shown. The shown in blue are the growth businesses. In addition to profit contribution of growing Air-to-Water in Europe and overseas electrical construction materials business, the display case in North America increased in sales, and also the Home Appliance recovered. With that, profit grew with higher sales. The negative impact from lower demand after stay-at-home period in Japan and the supply problem due to the Shanghai lockdown ended and contributed significantly to profit, as you can see on this slide. Next, I'd like to talk about the recovery from the deteriorating external environment. This shows the quarterly year-on-year comparison showing the progress of recovery. On the left-hand side, we are showing the Q3 of FY 2022. Each bar below the line is the effects of the deteriorating environment. Raw material cost increase and the higher logistic cost are included here. The upper portion, the blue part, shows the recovery via operational reforms. In Q3 FY 2022, we could only counter the deteriorating environment by 35%. By accumulating the operational reform, gradually we made progress. As I said, in Q2 of FY 2023, we have offset or countered up to almost 90%. As for the external environment in the past year, there were lockdowns due to COVID-19 and the changing situation with Russia and Ukraine, and the higher raw material prices and the higher logistic costs and unstable forex. Those external environmental changes were higher or more than what we expected. However, vis-à-vis those worsening factors, through the continued operational reforms, we are making steady progress. I think you can see that from this slide. As for the specific progress of the operational reform, I will go into the details in the second half of my presentation. Now, the first-half of the year is summarized, and also, I'd like to talk about the initiatives for the second half. In the first-half, as I explained so far, the external environment has been changing very rapidly, and we have continued to take the measures, and those ongoing measures are gaining results and seeing fruit. As a result, in Q2, we increased the sales and the profit. The major driver of the performance has been the higher sales, mainly of the growth businesses, and also how we reacted to the changing environment with operational reforms. Now, already two months passed in the second half, and we are starting to see the new changes in the environment. In the middle of this slide, we are listing the risks and opportunities from the business perspective. In the second half, we would try to identify the risks and then try to make efforts so that we can reach the announced targets. Major initiatives are shown at the bottom. First of all, to execute the investment for the growing businesses. Through the operational reform across the company, we would fully engage with the reform efforts and try to streamline the inventories to maximize the operating cash flow. In order to achieve our targets, this chart shows the changes from the initial forecast. The top half shows the forecast that we announced at the beginning of the year, and the second half, or the bottom half, is the factors behind the changes based on the forecast right now. As you can see in the middle, the Shanghai lockdown led to the negative impact of about JPY 4 billion. The forex led to the negative impact of JPY 7 billion. With the operational reform, including the price revision and the rationalization, we have countered this with JPY 11 billion. Through that, we are going to accelerate our efforts to reach our targets. Now, let me talk about medium to long-term strategies. First, I'd like to give you the positioning of seven priority businesses more in detail. The slide on the left is the current portfolio that we announced on the IR Day in June, and also the portfolio that we would like to achieve in 2030. HVAC and overseas electrical construction materials from now to 2030, they are positioned as growth leaders. Energy solution and the CO2 Refrigeration system with the freezer are leader candidates, but in 2030, they will try to become the growth leaders. The electrical construction materials in Japan and display cases and Home Appliances in Japan will continue to be as a stable profitability in 2030. The chart on the right-hand side shows the trend of the seven priority businesses in each market growth cycle. As you can see, the leader candidate, the energy solution and CO2 Refrigeration system, they are in the adoption period. The growth leader, the HVAC, and also the overseas electrical construction materials are in the growth period. The electrical construction materials in Japan, display case and Home Appliances or white goods in Japan are in the mature period. Depending on the growth stage, there are different stages of the growth as well as competitive environment and customer needs. The leader candidate's business, for that, we would try to make the investments so that we can lead in the market startup. The growth leader businesses in the growth period, we would try to invest in the priority areas to expand the sales. For the stable profitability business, we would invest for the added value and also to improve the profitability through the operational reform. Based on those ways of thinking, we would try to clarify the priorities of the businesses even further so that we can accelerate the selection and concentration. As I explained, out of those seven priority businesses, for the growth leaders and the leader candidates, what are we going to do in the medium to long-term? This slide shows the strategic roadmap of those businesses. What's written in red shows the initiatives to contribute to performance in three years. The blue are the initiatives to be started in three years and will contribute in the next medium-term or onwards. We try to differentiate those. The graph on the right shows how we are trying to grow those businesses toward 2030. This is an image that I wanted to show to you. The top two, the growth leader businesses, there are already market growth that we have seen. We would like to make sure we make a good investment so that those businesses will continue to make contribution to our performance toward 2030. I will talk about the details from now on. Now, the second bottom ones, the leader candidates or the development businesses, we will look at the changes in the environment and try to make the upfront investment as well as the market development. When the market starts up, we are hoping that those businesses will make a major contribution. That is how we are positioning those development businesses. We would like to grow those businesses in the next medium-term. In the coming three years, we will steadily execute the development and demonstration and design and others to enable that. This chart shows our self-assessment of the first-half progress for the seven priority businesses. This looks at the KPI progress and EBITDA progress from the perspective of where we stand after six months against the KPIs we set out on IR Day in June. First, KPI progress for growth leaders and leader candidates, i.e., for growth businesses. First, CAGR in first-half was 15%, exceeding the CAGR 8% or higher for fiscal 2031. Therefore, this is a circle. As for the three stable revenue businesses, EBITDA rate for first-half was ± 0%. In fiscal 2031, we were not able to see improvement against the EBITDA rate of + 5 percentage points or higher. Therefore, it is triangle. Next, regarding the EBITDA progress, four growth businesses increased EBITDA by JPY 11.4 billion, on par with the plan of the + JPY 60 billion in the midterm. On the other hand, three stable revenue businesses increased EBITDA by JPY 3.4 billion in the first-half, which did not reach the target of + JPY 50 billion in the midterm. In the first-half, especially for the stable revenue, Home Appliances and domestic electrical construction materials, the impact of the Shanghai lockdown was very large. Suppose there had been no impact of the Shanghai lockdown, the numbers without the impact of the Shanghai lockdown are shown here. If that is the case, then the figure is similar to the level of the plan. Now, I would like to explain the progress of the growth leader to two areas. The first growth leader is the HVAC system. In the HVAC Company, excluding the Home Appliances route, equipment and solutions fall under this category. As shown in the graph on the left side, HVAC achieved double-digit growth in the first-half with sales of JPY 303.8 billion, which was 110% year-on-year, which European sales increased by 68% year-on-year. As written on the right-hand side, this is due to the expanded sales network built in each country to meet active demand for European A to W. If you look at European A to W, sales increased 2.3x, far exceeding the market growth. In order to further expand business, as we announced on October 3rd last month, we made a decision to invest approximately JPY 50 billion to boost production in the Czech Republic and other places by 2025 and strengthen business foundations such as R&D structure. Marketing costs will be spent to further strengthen our business foundation. Also, as we announced last week, we signed an agreement to acquire Chiller business from Systemair AB of Sweden to strengthen our Light Commercial sector, looking toward European CFC regulations and shift from combustion-type devices. With this acquisition, we can offer high-value added solutions, not only in Air Conditioning but also in water heating and room heating, thereby significantly accelerating the business growth. European strategy of HVAC Company will be explained by Mr. Michiura later on. I do hope that you ask questions to him. Now, moving on to the second growth leader business, which is overseas electrical construction materials. As shown on the left-hand side, sales in the first-half was JPY 118 billion, which is 132% year-on-year, also achieving double-digit growth. The three key countries of India, Turkey, and Vietnam achieved 138% growth. This is due to the capacity increase in line with the market growth, expansion of clients such as distributors, and strengthening of product line up in the three key countries with robust growth. We have established the new factory in Sri City, and we started production in April. We have number one share in all three countries, especially India and Vietnam. We achieved growth, which exceeded the economic growth in the first-half. In the second half, we will continue to take measures to increase sales. We will increase the utilization rate of three city factories, which started operation in April. We will also start construction of new buildings for the Vietnamese factory to expand production capacity for next years ahead of other companies. Next, I'd like to talk about company-wide operational reforms. This slide shows the overall picture of the three-year operational reforms we have shown to you last time. We have overcome the effects of environmental deterioration, such as raw materials price and exchange rate, by implementing operations such as continuous cost structure reforms and price revisions, which will total over JPY 130 billion. Today, I will explain the progress with the points highlighted in gray: the capacity, company-wide reinforcement of direct materials cost competitiveness, SCM and ECM reforms, and review of shipping price of Home Appliances in Japan, electrical construction materials, and overseas HVAC systems. First is the progress of the company-wide reinforcement of direct materials cost competitiveness. Regarding this, we established a procurement department in the strategic headquarters, which reports to me in April. We are implementing drastic measures in four categories, shifting the phase from individual operational procurement to overall optimal procurement. I will explain the initiatives for the first-half. The first one, materials, we switched to purchasing general-purpose materials from several companies. The second one, semiconductors and electric components, we switched from purchasing primarily from Japanese companies to concentrating on major industrial players. Three, electrical components. For motors and others, we centralize manufacturers and promote common use and general-purpose products by design department. Four, mechanical parts and assembly parts, we select strategic partners and concentrate supplies to 20%. With these initiatives, we estimate JPY 5 billion in reduction in FY 2023. As we move toward FY 2025, we will accumulate further effects by promoting these initiatives. I'll show you two examples of company-wide reinforcement of direct materials cost competitiveness. In the example shown on the left, it shows the filters of heat exchanges. Mapping of common parts were made from design stage and by gathering information and strengthening collaboration. Centralized contracts between businesses were further deepened, resulting in 60% cost reduction. Example on the right is centralized contracts for electrical components. For motors, which have the highest ripple effect in the company, common use among departments and centralized contracts for global procurements were promoted, resulting in cost reduction of JPY 2 billion for this fiscal year. Both are examples of concrete efforts going beyond the framework of the organization and with the big framework of Panasonic and taking a company-wide initiative, resulting in specific results. Next, I'll explain the initiatives to construct actual demand-oriented operation. Last time, I explained a new sales scheme to accurately convey product value of domestic consumer electronics. The intention is to build a mechanism for offering high-value added quality products worthy of the price, which is appreciated by the customers in a timely manner. This is only valid if you continue to generate products which are chosen by the customers. Therefore, this is a scheme which is valid only when you can develop customer-oriented products, and it is not a mere sales side initiative or maintaining and controlling prices. This leads to optimization or extension of the product lifecycle. Rather than launching products with minor changes, which has little difference from the previous year's model, every year, customers are able to use products with true value for a longer period. For example, the lifecycle of the worktop dishwashers and dryers and microwave ovens are prolonged to two or three years. As a result, it is now possible to shift development resources that used to be spent on minor change to new categories. We announced the pre-trial of IH rice cooker with automated measuring function on November 15th. You can see the photo of this product. We announced the pre-trial, and many people, for the first time, 1,200 people, we have already received applications from 7,000 people. This had big percussion and reaction from the consumers. Indeed, the new products, which are worthy of Panasonic, we are shifting our resources for the products which are appealing. As you can see on the right-hand side, we are implementing new initiative distribution toward constructing an actual demand-oriented SEM process. This is an initiative to rebuild IT infrastructure and logistics for the whole supply chain and build SEM process, which is linked to real demand. We are working toward introduction in FY 2024, and POC is underway. I have explained to you the progress so far in the first-half. What I have explained is just a stepping stone toward 2030. I'm sure that there will be further change in the environment. At the end of the day, in 2030, we aim to become a company which will continue to evolve in the long run and become number one or number two in EBITDA in each of the businesses. I seek your kind cooperation and support. Lastly, future IR schedule. With the new company structure, we are enhancing disclosure, intentionally enhancing the level and quality of disclosure by strengthening engagement and communication with the capital market. We will have the market-oriented perspective rooted in the management, which leads to further management reform. The schedule on the slide shows the IR calendar, IR schedule for FY 2023 and 2024 after IR Day in June, site visit, roundtable, and preview meetings. We have had various opportunities to facilitate your understanding of our company's activities. We will continue to deepen and increase opportunities for engagement with you and seek your kind cooperation and support. With this, I would like to conclude my presentation. I thank you very much for your kind attention. [Foreign language] Thank you very much. Now, I would like to take questions, so please bear with us. [Foreign languag] T o answer your questions, in addition to Mr. Shinada, we have Mr. Nakashima, CFO of Panasonic Corporation. Now, we are ready to take questions. We are taking questions both from the Shiodome Building as well as online. As for the online, we only take questions in Japanese. Thank you. [Foreign language] Again, we are only taking questions, remote questions, in Japanese. Now, I would like to take a question from the Tokyo Shiodome Building. Harada-san from Goldman Sachs Securities. Thank you. I am Harada of Goldman Sachs. This is a great opportunity. Thank you very much, indeed. I have two questions. First, toward the end of my presentation, you talked about the Supply Chain Management process, and you are rebuilding this. As for the lifestyle business, the operational reform and to improve the profitability by operational reform, I think there are a lot of opportunities. From FY 2024, you'll be introducing this. What kind of impact or the positive impact do you expect? That's my first question. The second is that this time, the Air Conditioning is one of the growing businesses that you mentioned. On page 21, EBITDA, first, number one and number two, you want to have a collection of those businesses. Some of the businesses probably will be shrinking. Maybe some of the businesses which might not go so well and the priority becoming lower, if you have any of them, I would like to know them. I would like to basically know your portfolio change. As for the SEM, of course, we have to consider the counterparts. Of course, our scheme is that the counterpart also needs to make an investment in ICT. The customer information system and our system is to get connected so that we can have the inventories and achieve the 95% that I mentioned earlier. As of now, in the second half, what we're experimenting is one major company to start experimenting with the scheme. From April next year, we would like to start the production of the system. What we are doing right now is that, for example, the shortage of the products, the front loading, laundry, washing equipment is one of the things that we are experimenting on. In addition to the front loading, washing machine, the refrigerator, and the air conditioner in Japan, we would like to apply this to other products starting in FY 2024 and onwards. As of now, the major customers and different products, we do not have a clear formula. The next time, maybe in our meeting in June, we will be able to give you more clarity on this topic. Until then, we'd like to ask you to give us some time. That is the current status. In June, we will be able to talk about the customers and the products and what is the percentage out of the overall sales and what kind of cost reduction that we can expect. Maybe we can talk about those in IR Day next June. That's my first point. The second point is the collection of the businesses of number one and number two. When we became the Panasonic Corporation, some of the low profitability businesses we have withdrawn from them. That was since the beginning, from the beginning. When you look at the major categories, for example, kitchen BU, within the kitchen BU, this particular product is something that we are withdrawing from. If we find that, we might do so. When you look at the business unit, as of now, we are not thinking of withdrawing from any of those businesses that we have right now. Thank you very much. I understand. If you go to page 12, in terms of portfolio, there is an assessment business at the bottom left. As Mr. Shinada said, right now, we do not have any unprofitable businesses, but we also consider the region. There are some difficult businesses. In some cases, some of the businesses need to be transferred to the partners in order to develop and prosper. One of the candidates is the business of our clients, business in China and Asia. Those are one of the businesses that we need to assess in the coming three years. In addition to Asia, in Europe as well, as for the white goods, we have to make sure that we assess. As a result of the assessment, we have to decide what to do. Assessment does not mean that we plan to withdraw from them. As Mr. Shinada said, they are upset, the stable profitability, for example, display case in three areas, they are positioned as a stable profitability. The business in China, also under the CNA, they are finalizing the direction of this business. Ultimately, when we can, we will be talking about that and how we changed the portfolio and so forth will be explained to you in detail. Thank you. [Foreign language] I'd like to move on to the next person. Okazaki-san from Nomura Securities, please. Thank you. Okazaki from Nomura Securities. Slide 10, EBITDA is 22 and the comparison from last time. The cost and the exchange rate is difficult. The price is progressing, price revision is progressing more than expected. With the difficult environment, with the increasing price, there is a risk that the demand might be dampened in the first-half. Pricing strategy has been progressing well. The changes of demand as a result, how do you look at the changes in the demand as a result of price revision? Price increase. Generally, you cannot generalize. As Mr. Okazaki said, if we do not meet the value of the consumers, then they would not accept. Right value, we have to revert their value to the right level. Based upon that assumption, we revise the price. We take actions to revise price. It is not the case that we are neglecting the consumers. I do hope that you understand this point clearly. In order to do that, there are a number of approaches for price revision. Plural number of approaches are taken. For one thing, new sales scheme. As you know, we have the products that we have confidence in will be the subject in the scope. As written here, the kind of products that there is no other product or our product capability is very strong, and even with a poor economic environment, the kind of products which give affluence to the customers, these are the kind of products. The total amount of sales of Home Appliances, then 30% of that is made up of these new products. Here, there is ample value. We and customers and the sales channel all are satisfied about the price, and we are proceeding smoothly. When it comes to repair parts, where we were not able to maintain the price, there is such a category of products. In line with the current situation, we conduct a review. This price level will be reasonable for these products. Taking the opportunity of this, we revised, reviewed the price. As I said at the outset, we set the price, which is commensurate with the value. Based upon that, we have taken the action to revise price. If there is no complaint from the customers, it does not mean so. Generally speaking, we are able to receive understanding of the customers and proceeding with the price revision. [Foreign language] We take another question from the Shiodome Building and then move to the online. Nakane f rom Nomura Securitie s。 Nakane, from Mizuho Securities, thank you very much for this opportunity. I have two questions. As much as you can answer FY 2024, what Mr. Shinada is thinking about in terms of sales and EBITDA, the size of them, and also by region, what would be the percentage of each region? How much resource do you mean to allocate? That's my first question. The second is the operation. Japan and abroad, the sales companies being combined. I think in the previous session, you said that you think about this. Organizationally, what were the changes or the changes that you will be making, and what would be the advantages? If you can talk about the B2B, B2C, Japan, and overseas, if you can give us some additional information. Within the new framework? Yes. First question, FY 2024, frankly speaking, the sales target, the numerical target, probably it's too early to talk about that. Top line number, we have not yet finalized it. As I said in the past, our company, I think that the management and infrastructure have been weak. Based on that reflection, we want to make sure that we rebuild this in the first medium-term. In a sense, about the prices, as I explained, and also the procurement actions, we want to make sure that we work on them. As an extension of that, we would like to become the collection of the strong businesses. Naturally, from after 10, we'd like to go for 15. As of now, we do not have a specific number. What about the percentage of the region? If you can give us an image of it. 2030 is far in the future, so this is not yet something that is being authorized internally. The percentage of Japan will be coming down. Right now, it's about 50% in Japan, but maybe it will go down to 40% or 35%. The biggest growth comes from Europe in terms of growth rate, and also India is what we are thinking about. Of course, China is after that. The percentage of China currently is 12%-13%. That would increase or get close to 20% also. Europe and India are going to grow faster. That would be the image that I can give you. In terms of the growth rate, that is what I can talk about. For the second part, we have B2C and B2B businesses, two different types of the businesses. As a management team, what we are discussing is that B2B2C is something that we would like to understand. We'd like to become a company who understands that. That is one of the characteristics of Panasonic. Until now, we did not say B2B, B2C. For example, there was a site visit of a Super Box. If you consider a building and there is an office in the building, there are equipment and lighting and so forth. Right now, after having this pandemic experience, the workers in the office, we have to, or all the companies have to consider the well-being of the employees. As a business, it is B2B. The users of the space, the end users, are not the decision makers to choose the equipment, but the well-being of the users and sustainability is something that needs to be considered. That is the major change that we are seeing happening in the society. Within the company, we have B2B and B2C. We have expertise in those areas. Understanding B2B2C, the end users, I think that is the area that we can make a lot of contributions. Also, until now, we were a separate company. What we are trying to enhance is the B2B. For each account, how do we take care of each account? How can we make improvement of that? That's something that we are trying to do. For example, convenience store or supermarket, those customers, of course, we provide lighting and electrical wiring and Air Conditioning and display cases. We provide multiple products to the users. Right now, in the group, based on the company system, those were separate. Now we are in one company. Our customers and the difficulties and issues of each account, we want to make sure that we stay close with the customers so that we can do a very close sales activity. The biggest change is enhancing the B2B account sales and also B2B2C. That is something that we can discuss internally and provide values. Also, sustainability. In that sense, the carbon neutrality, we can provide the more integrated and comprehensive solutions or the proposals to the customers. That is one of our strengths. Those are the areas that we want to strengthen. The first question, as Shinada said, as Panasonic Corporation, it is not that we have a clear picture for 2030 in concrete terms. If you look at page 14, we have priority businesses and seven businesses were chosen. For example, for growth business, CJ are up 8% by 2030. On the portfolio, looking at the market growth and our position, we conducted simulation. As this is a portfolio, portfolio will change over time. For example, for the growth business, we have the CAGR. For the stable business, it's not that the revenue will grow that much. Priority businesses will have about JPY 2.1 trillion of sales. If we achieve these KPIs, additional JPY 1 trillion can be achieved based upon the simulation on the portfolio. Depending upon the changes of the environment, we'll be managing the company accordingly. Moving on to, we would like to entertain questions online. Those of you who have any questions, please click the raise hand sign and show that you would like to ask a question. Yes? Again, from Denki Shimbun, please. Again, from Denki Shimbun. Can you hear me? Yes, we can. I have two questions, if I may. The first question. With the new organization of the lifestyle business, more than one year has passed and more than six months after the new company was established. The organization change and change of the company structure and the performance, apart from the performance of the business, the motivation inside the company or atmosphere in the company. Looked from Mr. Shinada, what changed most? If you can enlighten me as to what changes did you see. That is my first question. Second point, the new sales scheme. Last year, 8% was the coverage of the total products. And according to you, Mateo, the 30% for the Home Appliances. How do you look at the coverage of the products under the new scheme? Those products which are chosen, strong products, then it may not be all the products. Next fiscal year, how much is it going to grow? Ultimately, all the products will fall under the scope. Domestic Home Appliances, commercial practice, this has a big impact. Going forward, what is your thinking and how far are you going to extend this and the coverage of the new sales sche me? Thank you. With regards to your first question, as we have the UEFA-vision new company, what has changed? As you know, if you look at the management team, then based upon the knowledge and the experience of the past, every person in the management team is challenging new businesses. I'm sure that you can see that. For instance, after this, Michiura-san will be talking. He was the President of LS. He has experience of Lighting business, and he is a specialist in electric commercial construction materials. He was looking at Air Conditioning as well. What used to be with appliance joined S and the new HVAC is established. Culture and the way of doing business was separate and different. In that way, everybody is faced with new challenges and trying something new. Why is it? Looked from a fresh perspective and looked from customer's perspective. How does our business look like? Once again, we'd like to reset and see how our business is from customer's perspective. What the management team is focusing upon is that Panasonic is very large in scale and including overseas. We have close to 100,000 employees globally and about 36,000 people in Japan alone. There are people who do not have to look at customers and there are people who are just looking inside the company. However, the fundamental basic of our business activities should be to addressing and looking at the customers. In one year, since October, we established the lifestyle business. The divisional company presence, based upon the basic thinking, is looking at their business and addressing their customers. They are able to address the regions that they are conducting activities in and how the organization is aligned. The President of the divisional company is focusing upon that. The organizational structure change and how the change has occurred will be explained in April next year. We will be able to update you. We look outside outward, not inward. We have been focusing upon that. We are able to see some results already. That is my response to Gensan's first question. The second question regarding sales scheme. How much coverage the new scheme is? 20% currently? And perhaps 30% because, as I said, with the definition, flagship products. We cannot say that all the products are flagship products. About 30% or a bit more than 30% of the total products would be a yardstick in the medium-term. However, when it comes to profit contribution, it should be far higher than 30%. In other words, with a limited number of lineup, we are able to jointly generate profit with a spirit of three-way satisfaction. Not just increasing the weight in the sales, enhancing the quality of the products that offer. That is the key. I hope that this answers your question, Gensan. Thank you. [Foreign language] Thank you. We are running out of time. We will take one more question online and another question from this building. From Nikkei, Hirashima-san. My name is Hirashima from Nikkei. I hope you can hear me. Yes, thank you. About Home Appliances, I have a question. The development, manufacturing, and sales, you have talked about the importance of this. Last year, in the briefing session, you mentioned the changes to the development structure. The speed of the development, and I'm sure that you talked about that. What is the progress of speeding up the development? The development speed, is it twice as fast, or how do you see that? Also, the integrated development, manufacturing, and the sales, maybe it's not only for the H ome appliances. Have you seen any changes or the progress that you have made? Yes. About the integration of the development, manufacturing, and sales, depending on the business, the formation is different. For example, the HVAC system, which you will hear about next. The need for air quality is increasing. Our technology of air quality and Air Conditioning, how to merge them, technological integration is progressing clearly. Also, the Home Appliances, last year or this June, as Matsushita-san said, the micro enterprise. This is a kind of a project-based product development. There are nine different projects going on. For that, in addition to the speed of the development, something unique is something that we would like to generate. In that sense, we are getting a lot of good response. Speed up or increasing the speed is important. As I said, the life cycle of products, we want to make it longer and we want to maintain the prices for a longer term. By doing so, the development in relation to their health and others, we want to make sure that we can develop the good products that cannot be developed by others. We are starting to see the progress. We cannot really simply compare, for example, halving the lead time of the development. Rather, I think we are planning the products that cannot be manufactured by others. We are commercializing them. That is where we are seeing the progress and the changes by myself. I hope that answers your question, Hirashima-san. Yes, thank you very much. Lastly, last question from the floor. SMBC Nikko Katsura-san, please. Thank you very much today for this opportunity. Slide 13. I have two questions regarding slide 13. HVAC. Maybe I should ask this to Mr. Michiura. The acquisition this time, EUR 100 million. Mr. Shinada-san, you were able to make a decision in terms of speed and overall growth. There may be a larger M&A budget. This is a piece of the overall M&A. Is that a fair understanding? That's my first question. The second question is regarding overseas electrical construction materials. Rather than M&A, organic growth is larger. Then the investment needed for that. You talked about the factory in India and the regions and the contents. As we look at the next 10 years toward 2030, what is your idea? Thank you. The first about HVAC. If my explanation is not sufficient, you can ask Mr. Michiura, and he will explain in more detail. Without submitting to Holdings BOD, it was decided by the BOD of Panasonic Corporation, Board of Panasonic Corporation, Mr. Kusumi, CEO of Holdings, and Homma, Head of Chugoku, and Umeda, CFO. Three of us are outside directors. The Panasonic Corporation has three independent outside directors. As you can see the list of BOD members, you can see that. The Board makes a decision and move forward. On a company-wide basis, M&A, there are successes and failures. There is a company-wide M&A committee. We take actions and vis-à-vis our actions and procedures, what are missing, and we are aligning with the holding and making decisions. The decision itself is by me. Ultimately, go or no go can be decided by me. Europe or the HVAC business, we have various initiatives. For example, especially Chiller business this time. Rather than having the coolant going all over the building by circulating water, we can have Air Conditioning, cooling, and heating. This is Europe, which is advanced in environment, European market. This is very important. In North America, this can be deployed to Nordic countries, to North America. Europe and North America, in the medium to long run, the Water Circulation will be very important. The technological development element for that, we have to take that element into the company. This acquisition was an important step forward to that end. That is about Air Conditioning. The second, overseas electric construction materials, M&A, as explained, basically, as more and more buildings are built, and there's a need for the electric construction materials. The business is enjoying double-digit growth year after year. For one thing, vis-à-vis the changing market, how quickly we are able to develop products which meet the local market. Secondly, we should have the factory and the capacity for supplying products. That's the second point. Thirdly, the markets such as India are vast markets. How to enhance our distribution capabilities? These three are the winning points. We set the timeline, and we follow this M&A, w e do not have any opportunity for electric construction material, not necessarily the housing type and non-residential type buildings are there. PEW India is strong in Residential, but if the company tries to grow more, then they should be enhancing their view perspective to non-residential business as well. The African market look from India is promising as well. What comes after India is Africa. How we set the foundation in Africa is important in the medium-term. Thank you. With that, we would like to end the session of Panasonic Corporation. Hello, this is Michiura. I would like to focus on our Europe strategy today for HVAC Company. As you can see, we are facing a variety of social issues. In order to solve these social issues, we have various technologies to solve these, and we are evolving day by day. The blue letters in the table below represent some of the technologies we are developing. For example, we're working on low GWP refrigerants for a sustainable society. We have Chillers and A2W Air-to-Water. Using those technologies, we would like to contribute to the changes. We are also contributing to the issues of bacteria, viruses, air pollution, and productivity improvement with our various technologies, as you can see below. As introduced in our previous IR Day, we are committed to visualize the future with air. Our brand slogan is based on the concept of changing the future from the air. The word includes our commitment to serving the world and growing our businesses. It has been years since the establishment of HVAC Corporation, and all of our employees are working hard to realize this idea. This was also explained recently at the IR Day. These are the values provided by our company. It's not only towards the end users, but also for real estate owners and builders. We are committed to providing these three values. We would like to contribute to the safety and security of the planet as well, and to make a vibrant society. We would like to achieve these three pillars of our company. Now, I would like to explain the business areas in which our company plans to expand in the future. Currently, our company's strength lies in the Residential area. The yellow area on the bottom left of the screen is our strength. While leveraging the strength, we will focus on Light Commercial area shown in the blue in the center of the screen. Light Commercial area, as you can see on the screen, is about up to 5,000 sq m in Europe as a property. This includes small stores and hotels with fewer than 100 rooms. The Light Commercial and Residential areas are where people can benefit the most from the aforementioned three values. For example, the sterilization and deodorization effects of our proprietary air purification technologies, such as Ziaino and Nanoe, can be felt most effectively in small and medium-sized stores and offices. This is an area where we can fully utilize our strengths. This is our goal in expanding businesses into the Light Commercial field. We will build a recycling-oriented business, as shown on the screen, and continue to provide the highest value to the customers. We will be in contact with our customers throughout the entire process, from the installation of equipment and systems to their replacement. Through this, we will utilize cloud computing IT to remote monitoring and update the system to ensure the best air quality at all times. In building this business, it is essential to strengthen the equipment solution business. There are three major points to be strengthened, which is written on the right-hand side. There are three of them. First is about strengthening customer contact points. In order to expand into Light Commercial area, we need to fill in the missing pieces that we do not possess. In order to expand into Light Commercial area, we have to find that and strengthen customer contact points. Next is building recycling-oriented businesses. To that end, we have to increase the number of specialists for this purpose. We will also make full use of IT and cloud computing. We will promote local optimum management too. With that, I would like to explain our strategy for Europe. Regarding the local optimum, it was in a word, local production for local consumption. Now, going on to the explanation of strategy for Europe. First, the positioning of the European market. The left side says IAQ, which stands for Indoor Air Quality. This is the relationship between the level of interest in IAQ and the global market. Each market has very different air and building environments. For example, temperature, humidity, building insulation are completely different by markets. Mold, odors, VOCs, markets have different concerns too. Of the four key markets shown in blue, the European market has high potential to Panasonic's air quality value proposition. This is exactly where Panasonic's value propositions can be applied. Please see the right side of the screen. Europe is a leader in addressing environmental issues. It is a fierce battleground where companies are developing cutting-edge initiatives. We would like to thoroughly develop ourselves in the European market and then take the experience to the global market. Europe is a very tough market for us, and that is a market that we must win. This is the current business development in Europe. We are involved in everything from Residential to commercial. Particularly strong is that we are having strong strength in the Residential market, including Air-to-Water. In the future, we intend to fill in the missing pieces that we currently do not own while strengthening our business in the Light Commercial field. This is about the performance of the European market in the first-half of FY 2023. Sales in the European business grew significantly by 168% compared to the previous year, growing exponentially. The graph on the left side of the screen shows last year's annual sales result of JPY 68.8 billion. JPY 92.2 billion was in Europe, and EBITDA as operating company was 5.3%. Of Of the JPY 79.2 billion in annual sales in Europe, JPY 36.2 billion was in the first-half of the year. As shown in the pie chart, sales expanded to JPY 60.8 billion in the first-half of FY 2023. Among the sales of Air-to-Water, it increased 2.3x, driving the business significantly. Regarding Air-to-Water, the industry growth was assumed about 1.5x that of the previous year. We were able to achieve growth that exceeded the industry's growth. EBITDA for the European business was also more than double-digit. We will continue to aim for growth. This is the characteristics of the European market. In a nutshell, environmental regulations are very tight and tough. As you can see on the left side of the screen, the Kigali revision of 2019 will include restrictions on CFC or F-gases substitutes in the Montreal Protocol. In Europe, the European Climate Law came into effect in July 2029. Further efforts are needed to reduce GHG emissions by 55% or more compared to 1990 levels by 2030 and to virtually zero emissions by 2050. Further efforts will be needed to address F-gases and GWP. We have no time to spare to address environmental issues. Now, I would like to summarize the key points for strengthening our business in Europe. We will strengthen our equipment solutions businesses to expand into Light Commercial area. please see the left side of the screen. As you can see, we are focusing on the three points of reinforcement. In addition, we will continue to strengthen our air quality business, including ventilation, through collaboration with our business partners. These seven specific initiatives in Europe are circled in green in the center of the screen. The details will be explained later. By accomplishing the measures shown on the screen, we will strengthen our business by completing the development, manufacturing, and sales of products within the European region. First, discussing the promotion of local production for local consumption in Europe. I will explain about operational reforms and strengthening customer contact points. Please see the left side of the screen. We will establish R&D bases in Europe. Specifically, we will promote R&D activities that are optimal for the European market, such as low GWP, air purification, and sensing. We will strengthen Air-to-Water check base. We will strengthen our production system, aiming to achieve a global production capacity of 1 million units. This is about 14 times the capacity in 2022. Please see the center of the screen. We will build a recycling-oriented business. We will double the number of specialists in FY 2026. To To strengthen customer contact, we will also enhance our training centers and showrooms. We will establish 50 training showroom locations throughout Europe in fiscal 2026, which is 1.5x more than in FY 2022. In the Air-to-Water service and maintenance business, we started this in Denmark in 2021. We will expand the number of service centers and showrooms to the entire Europe. By improving efficiency until 2024, we expect a cumulative cash flow of JPY 6.2 billion. Furthermore, our product supply lead time will be reduced by 60%. I will explain the environmental effects of Air-to-Water and the expansion of the market. Air-to-Water is using the heat water pump and to be utilized for heating and cooling the building. Compared to the combustion gas boilers, the CO2 emissions will be reduced by 65%. I would like you to see the right side of the screen. The Air-to-Water market is expected to grow at an annual rate of more than 29% from 2021 onward, reaching a scale of more than 6 million units by 2030. As mentioned earlier, we will expand our production capacity and promote replacement of combustion equipment, thereby contributing to the environment and expanding our business at the same time. Next, let me talk about our initiatives in the area of the natural refrigerated Air-to-Water. On the 3rd of October, we made an announcement at InterClima. In May 2023, we plan to launch the R290 product as a first Japanese manufacturer. In 2025, we will expand the lineup of R290 so that the customers can choose the natural refrigerant. We would also plan for the products that are suitable for Europe so that it can be supported by the customers. For example, the energy saving, noise reduction design, as you see on this slide, and also the product that copes with low outside temperature will be enhanced. On the right-hand side, we are showing you the Air-to-Water business. The CAGR of 50% is the rate of the growth that we'd like to realize. In 2030, rather, we would like to grow this into the continuous growing business. Let me now go into the details of this business on the following slide. As it was mentioned in the previous session, the enhancement of the Water Circulation or the Chiller segment is what we are focused upon. The Light Commercial business and the Chiller business, by working on those, we would like to fill in the missing pieces. Now, as a hot water supply and heating systems, there are two major types, as you can see here. The bottom part shows that circulating the refrigerant, such as CFC, to cool and heat this building. More specifically, this is almost like a Residential air conditioner and a commercial air conditioner. The top part shows the heat of the refrigerant will be conveyed to the water, and the water would circulate in the building to indirectly heat and cool the building. Specifically, this is the Air-to-Water in Europe and the Commercial Chiller. Actually, this uses a very limited number of the CFC. In Europe, they use the boiler to heat up the water to heat the space. This is a very common method and very close to the method that they have in Europe. We can actually contribute to the environment and also expand into the Light Commercial segment. We will be working on the enhancement of hot water supply and heating business. As you can see in blue, this also means to provide a new value by replacing the combustion type system. In order to realize that, we need the Chiller technology. For this, this is one of the missing pieces. We will be filling this piece. We will try to get the technology for the Commercial area and combine it with our strengths in the housing market to offer value. Together with the Water Circulation method, we would enhance the solutions linked with air quality technology, such as ventilation, to reduce CO2 emissions and to expand the business and by promoting the low GWP and energy saving. Once again, together with the Water Circulation method, we would enhance the solutions linked with the air quality technology, such as ventilation, to reduce CO2 emissions and to expand our businesses. Now I'd like to explain about the M&A that was announced recently. That is the air conditioner business acquisition from Systemair. As I explained earlier, one of the missing pieces is the Commercial Chiller business. In order to fill this space, we are having this M&A. Systemair is headquartered in Sweden, and it provides the commercial ventilation, air, and conditioning. We have been working together since 2019. Enhancing the Commercial Chiller business from that perspective, this M&A, the scope is shown on the right-hand side. We are acquiring the Air Conditioning business from Systemair AB. We will be obtaining 100% shares of the Air Conditioning business system from Systemair. This describes the value of Air Conditioning business of Systemair AB. Starting from the left-hand Commercial Air Conditioning technology, they have a Chiller as well as the indoor terminals and coil units. As you see on the right-hand side, they have sites for the R&D manufacturing and sales. The EUR 63 million is the business sales, the size of it. We will be able to have this business. Speedy enhancement of the Air Conditioning system. We'd like to merge our business foundation with their foundation to enhance this business so that we can grow the Water Circulation business in the non-housing area. We believe that we can grow this. The expected synergy is shown here. In strengthening the environmental technology, we would work on the product capacity Commercial Air Conditioning together with the inverter technology. By adding our inverter Commercial Air Conditioning technology, we will be able to realize more efficient products. We will also work on the strengthening of the R290 efforts. As for the development of the hot water supply and heating system, we will combine the Water Circulation as well as Air-to-Water for housing to create new values. On the right-hand side, we are showing the strengthening of the customer touchpoint. As I said, we will develop the circular business, enhancing the utilization of the IT and cloud. The bottom right shows the operational reform. We need to enhance the procurement, which can be expected. The Systemair has a strong procurement in Europe. By using our global procurement system, we believe that we can generate synergy. Also, with Systemair, in the area of the air quality, such as ventilation, we would actively promote the collaboration. As of now, we can only talk about the qualitative synergy, but in the future, we will work on the quantitative collaboration. We will be able to talk about this quantitative side in the near future. Next, let me summarize the initiatives to boost value going forward. Here, we are showing the room Air Conditioning. On the left-hand side, which is shown in blue framework, this is the area that we want to strengthen development by newly established R&D base. This includes the Water Circulation system and internal terminals and use of the GIE now and the Nanoe, the water purification technology, and also the coordination control of them. On the right-hand side, what is shown in the light red framework is the initiatives in collaboration with the partners. Air handling unit and ERP, those are the areas that we want to enhance. The overlapping area is where we will be focusing upon. Combining the water—sorry, the air purification technology with the ventilation and Air Conditioning and ERP and the coordinated control is the area that we want to enhance. As an R&D site, as you can see at the bottom left, we will be enhancing our resources so that we can develop the solutions combining the Water Circulation and others. With the partners, we would work on the combination of the air quality technology, air handling, and also the indoor terminals. Through the enhanced collaboration, we will continue to provide free values in the indoor environment. This is my last slide. HVAC midterm target is what I'd like to talk about now. As you can see on this slide, in the previous IR, I mentioned that JPY 1 trillion in sales, EBITDA of 10% are the targets for FY 2026. More recently, at InterClima, we talked about the European business and achieving the CAGR of 25% by FY 2026 and growing this business to JPY 200 billion. As you can see in the pie chart in FY 2026, the percentage of the Water Circulation business will be increasing in Europe and the European business as a whole as a strategic investment by FY 2026. In addition to EUR 100 million—sorry, EUR 100 million for the Systemair business acquisition, we will be investing JPY 50 billion to enhance the Air-to-Water business. In addition to enhancing the European business, by achieving that, we'd like to achieve the JPY 1 trillion sales and the EBITDA of 10% for FY 2026 earlier than our plan. Take a look at the synergy effect of M&A and find out how quickly we can achieve those targets and include that into our business plan for the next fiscal year. With that, I'd like to end my presentation. Thank you for your attention. [Foreign language] We would like to start the Q&A session. Please hold on for a few minutes. We would like to prepare ourselves. [Foreign language] The Q&A session will be led by President Michiura, Mr. Ishihara, and Mr. Murata, the CFO. We will now take questions from the audience. Questions will be accepted both at the CO Dome venue and online. [Foreign language] We will not be able to entertain the questions in English. [Foregn language] We will not be able to entertain the questions from the English channel. BofA Securities, Mr. Hirakawa, please. Thank you very much. This is Hirakawa of BofA Securities. It is about Air-to-Water. This business is going to grow, but I would like to know the current share in Europe and the competitors and the strength compared to your competitors. That is one question. Second question. You're going to be increasing sales from hereafter, but how much are you having the production and how is it going to be growing in the future? Because Daikin and heat pump, they already have a plan in order to increase the unit to 1 million units. Compared to that, how are you going to be planning? Thank you very much for your question. Regarding the shares within the market, I don't have data with me. Therefore, I will refrain from commenting on this. Regarding the competitors, the heat pump, the growth is what we intend to do. Therefore, main competitors will be the Japanese-related companies. Our strength compared to our competitors, where we can win over them, is of course we are going to be competing on efficiencies, and one is the refrigerant strategy. In the Japanese companies, one of the first companies, the GWP almost zero was we have been adopting. This is the heating with air and water. Within the European area, where the climate temperature is low compared to other competitors' products, we have a very strong strength where we are effectively working with our product. Other than that, we can have the remote control using IoTs over our product. By expanding the business, we can differentiate ourselves and clearly distinguish ourselves. Regarding the production scale, 150,000 units is for FY 2022. That was the actual result for our company. In the mid to long-term, we would like to bring it over to 1 million units. You have questioned us on Czech. Oh, no, it was Europe. And so the production is going to be aiming for 1 million units, and the destination mainly will be in Europe. I would like you to understand as such. Thank you very much on that. [Foreign language] Thank you. We are taking next question. Ezawa-san from Citigroup. Thank you, Ezawa from Citigroup Securities. My first question, which page was it? The growing sales, you achieved a higher growth. Air-to-Water in Europe has grown 2.3x. Air-to-Water 2.3x. On the other hand, there is another growth that you achieved. I tried to calculate this. Excluding Forex, about 20% sales increase or higher. Is this due to the market expansion, or is it higher market share for you or higher unit price? Could you talk about that? Air-to-Water is growing. In Europe, the business as a whole, what is happening? That is something that I would like to know. That is my first question. The second question. This fiscal year, EBITDA plan, JPY 40 billion, I think is unchanged. The worsening economies and inflation and the economic forecast in Europe, probably you have a different forecast. Is there any difference of the breakdown of the JPY 40 billion? For the next fiscal year, it is JPY 40 billion for this fiscal year, but the worsening economy, how do you see that happening and impacting the next fiscal year? Thank you. The first question, as you said correctly, Air-to-Water business is growing in Europe. One is the Residential Air Conditioners. Until now, as an area that did not require the Air Conditioning because of the global warming during the summer, the cooling is necessary or Air Conditioning is necessary. As a market for us, it's a tailwind. Air-to-Water, led by Air-to-Water, what we have, other products, and all of them are growing in Europe. That is the correct understanding of the market. As for the market share, as I said earlier, we cannot really share that information. The second question about the EBITDA, for this fiscal year, yes, JPY 40 billion for yen level. Toward that, we would like to make sure that we move forward. At the end of the first-half, there is no issue with the progress. We are doing well. Toward the second half, we would enhance our efforts. The inflation and the worsening economy, some negative news are coming in, especially in Europe, the issue of Ukraine is one of the issues. Despite that, we expect a steady growth. If you look at the global market, in all the regions, we think that this continues to grow, especially in Asia as well, in China. For the full year, we believe that we can realize the steady growth. One thing that could become a risk is China because the real estate market is worsening according to the mass media. In China, we need to look at this more conservatively. As a whole, HVAC as a whole in the European region, we can offset. We would like to continue to make efforts so that we can achieve the overall targets. Additional follow-up question. Basically, as an HVAC Company, Europe is expanding as a market, and that is the driver for your business. You're not talking about the market, but that's the general trend? Yes, your understanding is correct. If you look at each area, the biggest engine is Europe. I see. Thank you. Thank you very much. [Foreign language] We would like to entertain a Q&A from the floor and then shift over to online questioners. Morgan Stanley Securities, please. This is Ono from Morgan Stanley's. I have one big question. You said you're expanding into Light Commercial Area, and you have been acquiring Systemair, and you are having the missing piece now at hand that you have been mentioning. At this point, have you filled the missing point already fully, or else are you going to be needing to fill out some more? That's one thing. In conjunction, I would like to know about the share and the quantity. If you have some target line, is it going to be increasing little by little? If so, what should be the risks in order to meet the target, please? Thank you very much on that. We are shifting over and expanding into the Light Commercial businesses. That is why we have been acquiring Systemair's factory, and the heat source is now satisfied for the target customers. I think we really feel that at hand. The Chiller, and not only the air conditioner. The Air-to-Water, this is about the mid-size scale. Regarding this Merger and Acquisition this time, now we are able to respond to it with speed. Those areas are what we are benefiting from this Merger and Acquisition. Regarding the share that you have questioned, I would like you to back calculate the Air-to-Water that we intend to grow for the midterm plan for about 1.8x the growth. Accompanying that as a profit, and profit will be growing. Thanks to the conditions right now, we are now ensuring a certain level of profit. Going forward, we are now heading for the Red Ocean. The market is heading for the Red Ocean. We will have some level of some price competition, and the competition as well factored in. The material explains it too, but we are going to be locally producing and using it, consuming it locally. That is the basis philosophy of the midterm plan and creating the cash flow could be highly expected. Therefore, more than what we have had, the sales will be higher, and we can have more growth is what we are assuring. By unit, the product competition prices will be fiercer, but that is the condition that we are in. Thank you. [Foreign language] Now we are taking a question from remote participants, Kojima-san of Sankei Shimbum. Thank you, Kojima from Sankei Shimbum. I hope you can hear me. Yes. During the presentation, F-gases regulation Kigali revision was mentioned. Together with that, this time, the R290, the natural refrigerant, new Air-to-Water product was announced. For the future, the volume of the products R290, the natural refrigerant, do you think that the number of the products would increase and it would become the mainstream? Would it be able to make it before the time of the regulation? That is one question that I have. The second is that the Kigali revision would impact Japan. In Japan, the product with the natural refrigerant, what is the need of it, and what is the prospect of it? Thank you. The natural refrigerant, yes, Kigali revision and F-gas regulations, according to those revisions, we will be developing businesses. To do so, the various refrigerants right now, we are working on the R&D of them. This time, in a sense, in the short-term, when we consider the development of it, we needed to make a decision quickly in the short-term. Multiple refrigerant development is going on. R290 is close to the commercialization. That was the decision that we made. From Air-to-Water, we decided to use this. In Air-to-Water, the Kigali revision, we have been proactive. We will be launching the products in advance of the regulation. The regular refrigerant, the circulating, the regular refrigerant for the Air Conditioning. We would also try to lower the GWP. The new refrigerant for that is something that we are working on. Kigali revision, by the time of the deadline of the Kigali revision, we will be also launching the low GWP products. That is what I wanted to communicate to you. Also, recycling, of course, the recycling of the refrigerant is something that we have to do. As for R290, I think that the recycling is one of the major challenges. Including the partners, we will face this issue and work on the business expansion. As for Japan, Kigali revision basically is the international, together with the international regulation, reducing the volume of the refrigerant is something that we need to work on. According to the changes of the regulation, we have no choice but to promote our businesses based on such changes of the regulations. Thank you. [Foreign language] Thank you. We would like to entertain a question from the remote personnel, JP Morgan, Ayada-san, please. Thank you very much. This is Ayada from JP Morgan Securities. I have two questions. First one, this is about the EBITDA margin for the HVAC. It was 5% before, and you're raising it up to 10% or more. When from the OP margin, the next term will be 3%, and for other competitors, they have double-digit growth, and even the smaller companies have a 5%. Regarding that, the margin, I would like to know where your margin comes from. If possible, I would like you to explain it by locations, the regions. Within the next three years, how is it going to be moving is my interest. My second question would be for Air-to-Water. The sales system, or is it going to be using the agents, or are you going to be selling it direct? That is what I want to confirm. When you talk about Europe, I think the share of the market in Europe by country will be very different. Therefore, I would like to know where you are strong. Are you focusing to grow in that area where you are strong in, or else are you expanding in the European market? At that time, I would like to know the system for sales. Thank you very much for your question regarding the EBITDA compared to our competitor. Currently, we do not believe that we are very high. We have various reasons and backgrounds for this. The Air Conditioning business, especially the room conditioners, were the mainstay of us. Going forward, the Commercial A ir Cooling system is to be expanded. It is like this as it is currently, and it was so two, three years. We have been putting in the investment beforehand in a large amount. Even if we go into the market with room conditioners, with the partnerships company and the competitors, I think we are just half of what we have as a strategy. Therefore, Mr. Ishihara is intending to strengthen the commercial. At last, including Commercial Air Conditioning is now growing to a certain level scale. Going forward, the Commercial Cooling unit coolers are based on the profit, we would like to reinvest again and to create a good cycling, virtual cycling system. Later on, I think Mr. Murata will be sharing his opinion. About the margin profitability for the reasons is what you have been questioning. At this point, with the product category, this is Commercial Cooling Development. We have been using costs and looking at geology. The competitors, the largest competitors, the Chinese area, we are still using the room air conditioners as a mainstay. Therefore, profit-wise, we are tough. Right now, a European business is the engine of profit right now for us. As mentioned, the Commercial Air Conditioner and the combination with the air quality, China, and the focal areas that we have been seeing, that's Europe and North America included, we would like to increase our profitability and the margin. Until 2025, or FY 2026, the sales will be driven by mainly Europe. It's about the sales I would like to explain. By countries, it could be sold directly, or else we would be using agency. This comes from the historical reasons. According to the countries, the culture will be different. Therefore, we are responding respectively for each of the markets. The question was where we are very strong in, first of all. As the President already mentioned, our strong point is that even within the low temperature area, our room conditioners are not going to be reducing the temperature. Therefore, that's a strength. We do understand that we have a very high share, and we are strong within the Nordic area or the Scandinavian area. In Mid-Europe, the Air-to-Water was not coming in soon. However, as the first-half result, we have been growing 2.3x within the market where it was considered that the market growth was about 1.5x. A large part is Germany too. The Japanese market is having Japanese companies are struggling within the area. Within the distribution, Germany already has the boiling related company, which is very strong within the market. In Ukraine, Germany has been having many energy coming in from Ukraine by Ukraine. Therefore, we would like to increase our shares by leveraging the conditions currently. Thank you very much. [Foreign language] For the Scandinavian countries, the remote control and by connecting to the cloud, we both that we are providing businesses and services already. We are now seeding and now reaping the results of the seed that we have planted. Therefore, that is a big market for us. [Foreign language] Thank you. We are running out of time, so we take one more online question. Then another question from the Tokyo Shiodome Building. Tanaka- Yomiuri Shimbun. I'm Tanaka from Yomiuri Shimbun. I hope you can hear me. Yes. Thank you. I have two questions. About the M&A, the way of thinking, I think that the Systemair and Light Commercial probably is going to be the key. Which layer is that? What is the strategy? That is my first question. The second question is a basic question, probably, if I may. Air-to-Water, this JPY 50 billion investment. After April, you mentioned that the some growing area, is it part of the JPY 400 billion that you mentioned? Or as HVAC, is this the decision that you made? Is this unique to the HVAC Company, the JPY 50 billion? Does it come from your cash flow? Could you give us where it com es from? Sorry, it is a basic question, I am sure. Thank you. For the first question, M&A way of thinking, as you mentioned, the missing part is something that we want to fill and complement. From Residential to Light Commercial, we want to expand into that. What do we get from M&A? It is a text-based answer. We want to buy time. In terms of function, technology, or hardware, we want to make sure that we are very much focused and have tried to find candidates based on these targets that we have. Second is the JPY 50 billion investment. Yes, JPY 400 billion from holding. As Panasonic Corporation, JPY 300 billion strategic investment. As for JPY 50 billion that I talked about, as Mr. Shinada talked about, this is the new Panasonic Corporation. It is linked to the JPY 300 billion. Within the JPY 300 billion, this JPY 50 billion is included. As HVAC, the money that we earn is what we invest. That is how we look at this investment. If I may add to that, to your first question, you talked about M&A and the enhancement of the Light Commercial. Where specifically? On page four, as Mr. Michiura was referring to, I think he referred to this, the Light Commercial is what we are working on. Our strength, the GIE, ZIE, and Nanoe, including Japan and Asia, the hotels, they are very highly evaluated. The Light Commercial of up to 5,000 sq m, like 100 rooms, the hotels and the hospitals and clinics, small-scale clinics, they use our air quality technology, and it is well accepted. We already have that achievement. When we achieve the target, what are the missing parts? In order to get there, what would be the shortest way to get there? That is how we would look at it right? Now we woul d like to entertain our last question from the floor. Nakane-san of Mizuho Securities, please. This is Nakane from Mizuho Securities. I have two questions. One is about Air-to-Water in North America. How do you view North America? What are you going to be doing within that area? The other one is about Europe. You said that the rival companies are Japanese companies. However, the GE from South Korea is making great effort. My concern personally is within the mid to long run, the Chinese companies may come in as a form of OEM coupling with the local boiler companies. How do you view that? On the opposite, the sales service, you have to be creating that and establish that in speed. I would like to know these issues, please. Thank you very much for your question. Your question is the extension of the other question regarding North America. Our assumption in the next mid to long mid-term plan, following the Europe trend, Air-to-Water and the heat pump will be rolled out, and it's going to be replaced by gas. That is our assumption. Currently, within part of America, there are some areas moving proactively and quickly compared to other regions. Therefore, now we're entering in phase to have a study. From Europe, we can send the products from Europe, and we will coordinate with Systemair. Therefore, I think we can respond to the North American movement. The strategy is that we would like to look in closely with the movement of North America and launch the European competition other than the Japanese companies. It is just, as you say, the South Korean companies will be entering. That is our assumption too. Having said that, the proprietary strength that we have will be leveraged plus that the refrigerant will be proactive in having a strategy. Therefore, we would like to solidify our base foundation. The supply chain network. We will once again set a factory in Czech Republic. That is going to be our hub to have a strong supply network. That is the first thing that we will work on and change that into our advantage. That is all from my side. That explanation of HVAC Company is concluded. Thank you very much. Good afternoon. Thank you very much for coming in spite of your busy schedule. Katayama will explain the business strategy. Our company or CCS, I will be calling in short. First, business outline. CCS has four regions of business: North America, Japan, Oceania, and Asia. We have nine factories with 7,600 employees. In terms of market share for showcase, we have global about 20% market share and 15% global share of freezers. Business area is shown on the right-hand side of the showcase for supermarkets and convenience stores, kitchen, beverage equipment such as industrial refrigerators, and the distribution equipment and service maintenance. These are the three business domains. Next, history. As you can see, the activities CCS conducts started as Sanyo's business. In 2015, we acquired Hussmann Corporation and funded it quickly. In 2018, Refrigeration business was transferred to CCDB and started as a CCS company. In 2022, the transfer of Asia and Oceania business was decided, and we have the organizational structure in place. As you can see in the graph on the right-hand side, after acquisition of Hussmann, sales has been increasing of 4.7% CAGR. For the first time this year, we will exceed JPY 300 billion. As for the vision, mission is common to Panasonic. Vision is unique to the vision of the company. Currently, the majority of the business is for Food and Distribution. Going forward, upstream and downstream will be covered. Worthy of the Cold Solution, we should be recognized as the most customer-focused solutions provider to the Cold Chain. We have the vision only in English. Now, the market structure will be explained. Cold Chain industry, in addition to Food Distribution, we have warehouse and low temperature distribution. Wide data shows that because two years are anomalies based upon calendar year 2019 before COVID-19. As you can see on the left-hand side in calendar year 2019, JPY 4.4 trillion was the market size up until 2029. CAGR, a bit less than 3% stable growth is expected. Right-hand side shows the structure of the market by region: North America and Europe, Japan and Asia, and others are evenly composed. Showcase refrigerating machine and kitchen equipment accounts for 70% downstream market constitute together. In the Cold Chain business, the majority of the business comes from the Food Retailing industry. Therefore, here, I would like to look at the market of the Food Retailing industry. The largest customer is the Retail industry. As you can see in the bar graph on the left-hand side, in Japan, JPY 30 trillion, and in the United States, exceeding $100 trillion, and a large market. Stably, the market is growing and evolving, and more demand is supporting our business. In the growth business in Japan, the drugstore market is prominent. As you can see in the right top, the high growth rate exceeding retail industry is shown, and the ratio of food sales is increasing over the past several years and reached 30% of the total. For food retail industry, this is an area which supports growth. Specific products we have showcased, we are delivering showcase, and the most recent situation, the first-half based upon that, on the right-hand bottom, you can see. In Japan, convenience industry is slightly sluggish, and drugstore and supermarkets are bullish, and the U.S. dollar stage is growing, and local and national supermarkets are stably growing. Next, about the competition of the Food Retailing industry. On the left-hand side, you can see the comparison, the sales. Globally, the competitors' competitiveness, other than Japanese companies, few are listed. We are estimating some of these numbers. There are a number of players with more than JPY 100 billion, and if I say 2023, we are the largest company. However, the profitability of that appears in Japan. Compared to them, we are slightly inferior. Starting from April, as one divisional company of Panasonic Corporation, we started. Not only the size scale, but we would like to focus upon improving profitability. Still, we are not sufficient. As you can see on the right-hand side, July, September quarter profitability, EBITDA margin improved by slightly less than 5%, and 30% high number was achieved. Growth and the profitability improvement was realized, and the gap is being reduced. In the first-half results, it shows the current situation. Sales increased by 29% to JPY 168.7 billion. Showcase and service parts supported increase in revenue, and refrigerators and the kitchen equipment increased significantly. JPY 9.7 billion in EBITDA, reaching close to JPY 10 billion. Margin is 5.8%, exceeding 6% in the second quarter. For the first-half, because of material price increase, there was -JPY 4.5 billion, but offset by JPY 5.3 billion, and JPY 2.9 billion increased sales, and this contributed to increased revenue. Now, from now, I would like to look at the medium-term and see medium to long-term strategy of CCS Company. CCS Company needs to address social issues as listed three areas. One, low environmental impact. Two, labor shortage. And third, Food Loss Reduction. We make contribution to these three social issues. Here, specifically for three issues, how this brings about changes in the business environment. Number one, low environmental impact. In the Food Retail, the refrigerants, we are using mostly alternative CFC. With the change in regulations, the strengthened regulation results in significant reduction in CFC. By 2029, it has to be reduced to less than 60%. The R448, exceeding 1,000 to natural refrigerant, we need to convert. R744 CO2, conversion to CO2 is the largest theme. Next, number two, labor shortage. High engineering capability is required in this industry. More than the usual labor market, there is a severe shortage of labor. In the U.S., over the past one year, the shortage is increasing by more than 5 percentage points. In Japan, effective job offer rate is exceeding 4x. We need to address this; otherwise, we may cause negative impact for the customers in business. Lastly, Food Loss Reduction. As you can see in the chart at the top, in Japan, more than 5 million tons of food loss. The customer industry are faced with the food loss problem. Also, in the U.S., after COVID-19, grocery EC is progressing. The theme of food loss, not only existing distribution, but various Cold Chain Solutions are called for, and we need to respond to these challenges. For the three topics, I would like to introduce our countermeasures one by one. First of all, regarding the low environmental impact on the left-hand side, it has the market size of the CO2 freezer. Currently, stores are the mainstay, but we would like to expand in all areas, especially within the mid-sized expansion is what we focus. By regions, this is Europe, Japan, and North America. The regulations are there. However, we are assuming that there is going to be a driver of growth. It is going to be double the current size in the future. The CO2 refrigerator, we would like to become a top company with our countermeasures. Our strength is written on the right-hand side. First of all, this is energy saving and downsizing of Chillers. This is the two-stage compression type compressor that we have been using for a long time. Second, we have a high MIF share. MIF stands for machine in the field. We have the installation and maintenance know-how. Number four, wide range of product lineup. Currently, the bottleneck is the product pricing is high. However, leveraging on our strength, we would like to expand to our target number of sales in order to drive our sales and expansion within the market. Next, how we countermeasure the labor shortage. We are supported by the engineers, valuable engineers, and we are ongoing services and maintenance. In summer, we have the explosive number of demands, and we have to be covering the shortage of labor. In order not to compromise that, we are working on digitalization in U.S. Hussmann with Store Connect, and E-CUBE is the solution serviced by Japan. That is leveraging the IoT solutions work that is shown on the bottom chart. The IoT Connect in the U.S. is now starting to be supported by U.S. customers. People are acknowledging the strength of the Store Connect. Hussmann is reducing the generator, and our cost is declining. Therefore, they are contributing to our profit. Japan's S-CUBE is also doing the same too. We are aiming for becoming a platform within the global front. The other topic is about ensuring the human resources in Hussmann. Hussmann has the work on the development of workers by using TechX. TechX is supporting many of the labor shortage at Hussmann. For ensuring constant labor, this is meaningful. We in Japan would like to introduce this in Japan too in order to provide service with a stable amount of labor. Last, this countermeasures on reduction of food loss. This is going to be a long topic, and we have to keep on working on it. We have to be making our differentiation in order to appeal to the users. We are developing on it. The Master Pot is quick and easy creation of retort packages with master's packed technique to extend recipe. The Food Loss Reduction and Taste Defrost Cooler can realize high-quality thawing by highly controlled temperature. Now the national companies are introducing this. The EC support is done by Smart Locker. It can be adaptable for three temperature zones: freezing, cold storage, and normal temperature. It is going to be linking up with the users and the end users. The distribution of these products are not that big right now. However, these services are very unique to us. Therefore, with the comprehensive recommendations from ourselves, we would like to start keeping our sales. For the strategies that we are now working on in order to solve the problem of the society, in order to make ourselves profitable, we must reflect on the past and future business operations regarding CCS. The reflections are shown on the left-hand side. We have three. First one was lack of investment in facilities and IT. Second was many times organization and strategic changes. The third was lack of synergy creation and acquisition of Hussmann. In the time of Sanyo Electric, we were able to secure the products with a top share. Hussmann was like that as well. Before coming into our group company, we were lacking investment in facilities and IT, which was a serious issue. Currently, therefore, we are now trying to shore up ourselves in Hussmann. Hussmann is going to be upgrading their system next year. In the organizational changes within Japan, it has been changing every year. Hussmann too has been changing their organizations three times after the Merger and Acquisition. After all these changes, we are going to be stable and to make a profitable path for us. After the Merger and Acquisition, it is not so. First of all, directly, we were focusing the Hussmann to sell the product of Panasonic. At this point, we are now going to be the supporter of Hussmann and to have Hussmann lead their way. Based on the reflection of the past, we would like to connect together with various regions in order for us to make ourselves profitable. The key point for expanding our global value is that we have to be connecting together in various regions. The right-hand side has the catalyst that is going to be connecting the world. The CO2 refrigerant brought over to the U.S., we have not been able to do this for six years. This year, after the divisional company, it has been realized not taking one year. From here, Japan and the U.S., they are going to be contributing very much to the expansion of CCS. The CCS will be also working for the software digital expansion. For the global expansion in the kitchen equipment, that is going to be Asia, Japan, and Oceania. The other thing is about the coordination with the CCS. We are going to be working together. Customer access linkage with HVAC and EW. The Electric Works. We are going to be deepening our coordination. Electric Works are also going to be working in coordination for Japan. In India, we are successful. We are now asking the help from the Electric Works in that area too. LAS has various products that could be used. Therefore, we are preparing with the technical cooperation to exchange human talent with both companies. These are going to be done globally. For the strategy for the long-term, it is very crucial for us to connect together with each other and with other companies. From here on, these are going to be about the numbers. The EBITDA for fiscal 2022, it was JPY 102 million. We are thinking about JPY 146 million for FY 2023. The scenario for expanding the sales and profit is not changed. The demand side is going to be slow. Therefore, our forecast is going to be a very conservative one. However, we have been growing for the full four years. Our challenge target for the FY 2023 will be JPY 170,100 million to JPY 200,100 million. Now for the FY 2025 CAGR target, it used to be JPY 23 billion EBITDA. The cash flow is JPY 29 billion with what we target. In the past, we have been changing operation. Therefore, fluctuation has been shown. However, in the three years, we would like to surely ensure JPY 23 billion EBITDA. The IR Day, Mr. Shinada has been explaining, and this number excludes the number coming from the China business. Therefore, I would like you to understand that it is not overlapping. The ROI, maybe you might think ROIC will be lower. However, with the Merger and Acquisition of Hussmann, the goodwill appreciation is showing. The effect is what we assume that to be exerted in the long run. Therefore, the fundamental ROIC compared to other competitors, we would like to control it so it will not be inferior to our competitors. Right now, there are works at hand in the U.S., which is a burden, which is a lot coming from the shortage of material. Therefore, the inventory is staying at the U.S. The customer is having difficulties with human labor. Therefore, the deliveries want the customer wants delivery to be late. However, these are going to be all inventories covered by the back order. Therefore, we do not think that is a risk. For For the working product, EBITDA is going to be increased and improved largely. Within this space, this is the outlook for FY 2025 KGI targets. In the case of CCS, the dollar-yen impact is very large. Currently, the Forex assumption, if we use that currently, it is not convincing. Therefore, the divisional company, we have an outlook. Let's say that JPY 140 to the dollar is expanding. It is going to be JPY 340 billion-JPY 360 billion on sales. The CAGR 2% at least will be something that we would like to assume. The contribution for the increase of the EBITDA is shown by factors in the right-hand side that the CO2 demand is going to be driving resales and EBITDA until FY 2023 was able to cover by material cost and pricing. However, there is going to be a fixed cost where we cannot cover. Therefore, we will be covering that up then by the sales increase. In FY 2023, we would like to bring the EBITDA margin at least at 8% or more. The CO2 rate is going to be increased for sales and improvements in manufacturing productivity, innovations of IT and operations, and increased sales of highly profitable products. We would like to be able to achieve this target as soon as possible. For the Panasonic group, the B2B2C contributions, we will be contributing through the B2B2C and Food business area for us CCS. We will be leading the way for the environmental countermeasures. Through our works, we will be contributing. Lastly, let me share the executive summary. We will be connecting the world and building a solid foundation for enhancing the competitiveness of Cold Chain businesses, leveraging the strength of CO2 freezers to become one of the world's leading environmental companies. Three, take advantage of high MIF, grow service to a pillar of business through expanding digital solutions. Fourth, strengthen the kitchen business as a company that responds to food loss by strengthening differentiated products. Five, achieving EBITDA of JPY 40 billion at an early stage at a rate exceeding the industry average. That is the key message from myself, and I would like to conclude my explanation. Thank you very much. Now, we would like to open the floor for Q&A, but you kindly wait until the stage is reset. Responding to your question is Mr. Katayama present, and Mr. Kawano, Executive Vice President, and Mr. Tominaga, Executive Vice President. Now, we would like to entertain questions. We are not able to receive questions from the English channel. We will not be able to entertain questions from the English channel. [Foreign language] Now, I would like to open the floor for questions from the floor. Hirakawa-san from BofA Securities, please. Hirakawa from BofA Securities. My first question. Global share, 20% for showcase and 10% for refrigerated North America, Europe, and Japan, what would be the breakdown and the profitability for each region? Can you please explain? That's my first question. My second question is about the future of the CO2 refrigerant business. In 2020, the freezer business market share will be how much? And in 2021 and 2022, in view of the market growth, what is the current progress? These are my two q uestions. Thank you. Thank you, Mr. Hirakawa. CO2, the freezer. Before that, showcase. In Europe, we are not doing at all in Europe. Frankly speaking, mid-20% market share is what I think. The market share is much higher in the United States. In Japan, even higher. Asia, Oceania is high, the same level. In Asia, because Chinese business, it is not in the business domain of ours. Europe and other areas on a weighted average, this is lower. The profitability by region, I would like to refrain from speaking. For your reference, the improvement of profit in the first-half. Half improvement comes from Japan and 40% from the U.S. and 10% from other Asia. In this way, we are improving the profit. With regards to CO2-related markets, frankly speaking, there is not much data. What we can say clearly is in the Japanese market for stores, we have 70%-80% market share. In Europe, also the largest market for stores, we belong to the top three. In the United States, still, the market for stores is not taking off. Rock market is a majority. Here, Hussmann itself is going to do this by themselves. They are already doing it. Our strength is small and medium size, as explained in the presentation. Six years after acquisition, we are not able to realize. The Japanese design is at last brought to the United States. Significant improvement can be expected in the next five years. Sorry that this is rather abstract explanation. I hope this answers your question. Thank you. Next question. From Goldman Sachs. Harada-san, please. This is Harada from Goldman Sachs. Thank you very much for the explanation. I have two questions. One is, the sales growth, the Cold Chain industry, the growth is around 3% is the assumption into that. The CO2 freezers is going to be starting to compete. Your product, including the upper stream and the lower stream, you have various coverage. Therefore, the sales growth is around 2%. Is that the correct understanding? That's my first question. If my assumption is correct, for the improvement, you should be improving the margin. On page 15 and page 17, you have a step chart. Regarding the pricing, pricing strategy is about when the product or the price is beyond the material cost. Therefore, is it coming out from the improvement of the practice within the market industry? I would like you to explain on the pricings too. Thank you very much, Harada-san. For the first point, this is about the market growth for heading 2024 LC base. We have been saying that it is 2%. That is why you question me as such. As Mr. Michiura mentioned, and he has been receiving the likewise question. We are running business in the U.S. The FRB continued interest rate hike is near to destroy the near double-digit inflation. Therefore, honestly speaking, we have a very big sense of crisis, meaning that the stance is that the interest rate is improved or hiked until some changes will be seen. Because of our concern, that is why we said 2%. I'm sorry that it is not linked directly to the market itself. For the other question, the increase of sales in July was shared. Our company within the Japanese company, we had a high profit compared to other competitors in Japan. The global companies in Japan, they have a higher ratio in overseas. Therefore, we have a high rate too. With Global and Japan, we both thought we have a high growth rate even in both areas. The second question, you said you were mentioning about the practice for the market. It should be changed or not. This is not something that is unique to us. The current condition is about the result coming from the activity to raise our product price connected with the movement of the market. Please understand like that. In FY 2025, the profit increase, you might think that we can no longer hike the price after one cycle has gone and finished. However, according to the geology region, I do not think the breadth of price hike is not that different by countries or regions. The productivity improvement at factory and there is the improvement of productivity for IoT. If this is taking on full length, this is an area that we can put in our efforts by ourselves and make differences. So far, we were not able to battle within the makets fully. We have put in full strength in order to come into the market. From here after, we are already within the market. Therefore, we're going to be making great efforts in-house in order to compete with other competitors. IT and the division of works at the plant will be changed, which will probably improve our effectivity by several percent. Thank you very much. Moving on to the next question. Ezawa-san from Citigroup Global Markets Japan, please. Thank you. Ezawa from Citigroup Global Markets Japan. About Hussmann, I am very interested in your presentation. You touched upon this already, but once again, how much did it go well? I think it was back in 2015 that you acquired the company. Hussmann and Panasonic, integration between the two. As a final assessment at this point in time, how do you look at the integration of Hussmann into Panasonic? At this point, where do you have the good integration and where is it not going well, and what are the challenges? If you can comment on the outcome of the integration of Hussmann. As I listen to you, large room for improvement of the company lies here. Whether or not integration of Hussmann will go ahead, how low-hanging fruit it is, and how much can we expect from integration of Hussmann? Thank you, Ezawa-san, for your question. Before we acquired the company, a fund was holding Hussmann. Before that, it was under HVAC Company and then became under the umbrella of Panasonic. Originally, synergy with HVAC was at the forefront. Then our capabilities and Hussmann’s capabilities, and there was a mismatch in the capabilities of the two companies. This is a stark fact. Having said that, however, the current competitiveness of servicing install business of Hussmann in North America is a very competitive business unit. Back then, they did not have sufficient lineup to show good results. As Michiura-san explained, Air-to-Water development in North America. As Hussmann, it is possible to collaborate with HVAC. If you only look at the Cold Chain vis-à-vis CO2, the evolution in North America, we have high expectations from the beginning. Because of hertz in Japan, 50 Hz, 60 Hz in Europe and North America, different hertz. In terms of market size, Europe used to be larger. We gave priority, placed priority to Europe. In the United States, there were not much needs for store installation. Therefore, we were putting that on the back burner. In addition, the transfer of technology, unless you have many engineers with fluent English capabilities. Realizing both in the United States and Europe, there were constraints. Now, Ezawa-san asked about how much room for improvement. I explained in my presentation earlier as well. In Hussmann, there are many strengths. It has history even more than Panasonic. We should accurately understand their strengths. Whatever we can copy, we will. With that stance, we support their growth. That is basic thinking. Of course, there are excellent management capabilities in Japan for CO2 and know-how in factories. We have advantage over them in these areas. In the management committee of the divisional companies, there is no room for discussion other than about the Food Retail Distribution industry. The speed of discussion and the depth of discussion is very different from in the past. I hope that this answers your question. Thank you. Now, we would like to entertain questions from the participants online. If you would like to pose a question, please press the button or raise your hand at the lower part. Excuses. We are not going to be entertaining questions in this channel. We were not able to confirm questions from online. Therefore, we are entertaining questions from the floor. SMBC Nikko Securities, Katsura-san, please. Thank you very much. This is Katsura from SMBC Nikko Securities. I think it was on page 16 and 18 on the slide. You said that this number is excluding China, and you have come to the target number. I would like to know what the back idea was. ROIC was low, but there was some impact to this. Excluding the impact, you said that you're going to be aiming for something that is not inferior to other peer companies. On page 18, the EBITDA of JPY 400 billion margin is also stated too. I think it's a conservative number. Within this IRJ, maybe you might have a vision for the midterm. In order to achieve this on the way, if you have anything that you have planned, please share with us. Starting from page 16, the JPY 23 billion was very simple. This was just a simple calculation of excluding China business. What was important for us is that midterm numbers should be clarified and cleared in order for the investors to understand us. We wanted to make this happen so that investors will understand us clearly that i nvestment has been lacking. Therefore, we were not able to fully exert our capability. Currently, now we are able to proactively move around. However, we have a fixed cost, and our organization has been reluctant about having fixed costs. First of all, we would like to achieve JPY 23 billion. There is nothing plus that or minus that. For the JPY 40 billion EBITDA, now we are the holding company, and now we are an operating system company. The Cold Chain divisional company, the sales is about half of HVAC. Until last year, the profit was like a situation that there is no meaning to disclose the numbers. For Panasonic, whether or not we are able to win by disclosing the number was important for Panasonic. Therefore, the Food Distribution industry, we thought it paramount that we are to come up with a strategy to win within the area that we are working. We are now coming to the profit rate of the average of the Panasonic companies. Having said that, I wanted to write JPY 50 billion. However, excluding the non-continuity, the scenario that I am thinking points out that JPY 40 billion will be appropriate and is able to calculate. That is how we came up with JPY 40 billion and the 8%. This is all related with the relation with the top line. I am conscious, first of all, within the Panasonic group, we wanted to first exert our presence. Within this area, the top line could grow more. At least 8% was put. This is a commitment that at least 8% could be or should be achieved. Rather than writing in 10%, I wanted to fulfill the number itself. Thank you very much. Next question, please. Iz umi-san from SBI Securities. Izumi from SBI Securities. Cold Chain business, the mixed sales mix on page one. You explain four items, and the image is showcased comes to the very front. Not the stores, but warehouses and transport logistics. In the Cold Chain, taking advantage of the technological capabilities of CCS and contribute to the society with the possible food shortage in the future, you have lots to contribute. Where should we focus upon in looking at the CCS business? Any comments on that, please? I talk about the focus of CO2 market and medium-sized warehouse and large-sized products will grow in Japan and Europe. OCU, the kind of small-sized two, four, 10 horsepower CO2 refrigerators, freezers are the main. Going forward, for warehouse, CO2 conversion will progress significantly. In view of the life cycle, lifespan of the warehouse, you have to convert to CO2 early. HFC-based or ammonia-based refrigerants are the main. By 2025, we come up with large ones and convert. That will result in double investment. Warehouses will be easier for us to appeal to. Our CO2 capabilities are built for larger ones. The question by Izumi-san. Upstream area, warehouse is an area that we are focusing upon in our business. The medium logistics part, Yamato is using process transportation and Refrigeration solution. We are doing that as a part of large players. It does not have sufficient width in the United States. Micro-fulfillment delivery market is very large. For example, there is one large supermarket and adjacent supermarket, gigantic warehouses there. For people who pick up automatically, more than 10,000 items can be automatically packed. Such business and warehouses are increasing in numbers. Here, also, Hussmann is taking the lead and collaborating with other companies. We are developing and identifying such businesses. Currently, it is a Food Retailing industry. As you have mentioned, if we can move into these areas, then in a different way, we will be able to develop our business. The key point here is warehouse growth. Therefore, we do warehouse. Because of the food loss, we offer a Refrigeration solution. That is not the case. Business model matters. Warehouse, if you build one, then for tens of years, you do not need a new one. What kind of business model are we going to make if there is a food loss with the Master Pot and others? Just selling the products will not be sufficient. We have to look at the business model. What kind of asset risk are we going to take? We have to evolve our business model. Otherwise, it does not mean lead to the real business evolution of Cold Chain. The level is not that large yet. We would like to wait for a bit more. As product, we have products that will be very attractive and impressive. Volume will have to be increased a bit more before we are able to show to the investors. Next question. Daiwa Securities, Sakai-san, please. Thank you very much. Sakai from Daiwa Securities. I have one large question. The Food Industry Distribution, the willingness to invest for your equipment, I would like to know how they are doing after COVID, both in Japan and overseas. There is the word keyword like saving energies. Going forward, how is the industry going to be changing? In conjunction, about the stores that you have been sharing with the mid-size warehouse and the small warehouses indicated in page 10, I think you have shared information before. More than stores, I think this industry is having a tough demand because the customers are being stringent in making investment. Do not you think so? Are you going to be compensating this and complementing this by having a new product or not? Thank you very much for your question, Sakai-san. First, about the willingness of the investment from the customer side, I would like to focus on Japan and the U.S. Regarding Japan, as you mentioned, in the last two years, the labor production rate has been focused. Therefore, new equipment was bought by the customers and supermarkets. Supermarkets have been making investments for refurbishment. Because energy costs become high, that is why customers are investing in energy-saving equipment. By COVID-19, the showcase display has been increasing the demand. Therefore, investment has been done much within the showcase area. However, at this point of time, the energy cost has been too high, mainly for the showcase display, the supermarket, and the convenient markets. The investment in those areas is starting to decline or becoming slow. That's the current reality. For people, the dining sector, after the COVID-19 or when the COVID-19 came from, there were times that the restaurants and dining industries were suppressed so much. Currently, now they're having a very big appetite for investment. That's unchanged. For the U.S., energy cost issues exist. What I feel is that compared to Japan, I think they're much relaxed. Japan is much more hit and sharply hit by the energy. Because America is changing so much in industry and the large shop is much in numbers, therefore, compared to Japan, there is no sign of slowing down. Honestly speaking, maybe things might slow down after December. However, the data that we are focusing on right now, there is no sign that there is a slowdown indication currently at this point. Honestly speaking, we do not work for the kitchens for U.S. Therefore, that is what we can share right now. Regarding warehouses, warehouse industry or market, it depends on which area you focus on. Micro-fulfillment is happening in the U.S., and the mid-size storage globally is now increasing very much. Limited to Japan, it is not that active. That is, as you say. Having said that, there are regulations and CO2 conversion must be done. Therefore, the assumption is that we do not really think that the total demand of store warehouse is going to be improved. The market is growing just because of the conversion of the CO2. I would like you to understand as such. Thank you. Thank you. The time is running short, so I would like to entertain one last question. If you have any question, please raise your hand. Okazaki-san from Nomura Securities, please. Thank you. Okazaki from Nomura Securities. In the Cold Chain business, we are thinking about M&A strategy. Upstream, you will be expanding to upstream. EBITDA target, excluding the non-connected linear. Are there any potential opportunities for M&A? In what area? In what area? In what area? The answer would lead immediately to what we are going to do. It is very difficult for me to say in that sense. Four areas: showcase, kitchen, refrigerator, and service. In all these areas, there's a potential possibility in the region: Japan, North America, Asia, and Europe also. I will say for all, in that sense, on the zero basis, business unit and the divisional company. We are thinking of way to buy. But we make ourselves or to acquire, we have to choose. We have to have an option. Can we do this organically or the business that we cannot do and we acquire? We look at all the opportunities. The constraint of investment, if the Panasonic Group's constraints are there, then what can we do to overcome that constraint? That's another story. In the business unit or the divisional company, if we had to choose something, the organic investment and the M&A are to be considered as parallel options. I hope that answers your question. So with that, the Cold Chain solutions explanation will be finished, concluded. Thank you very much for your participation. Thank you very much for coming to this briefing. I am Dono, the CEO of China and Northeast Asia Company or CNA. China still has a zero COVID-19 policy. It is possible that I will be isolated when I go back to China. I came over to Japan to make this presentation. Now let me start my presentation with the overview of CNA. I refer to the company as CNA, and CNA stands for China and Northeast Asia Company. CNA is a first regional company and was established in 2019. Making decisions about China in China, that was the way of thinking. Under that, we have been leading the development, manufacturing, and marketing from the region and customer perspectives. We are headquartered in Beijing. We have 39 companies in CNA and 30,000 employees and have five different business divisions, as you can see here. In order for you to understand how we started, I'd like to explain the background of the establishment of CNA. As you know, in 1978, then the Vice Premier Deng Xiaoping met with our Founder, Konosuke Matsushita. Mr. Matsushita promised to cooperate for China's development. That was the beginning of China business. As a Japanese manufacturer, we built the major presence in the Chinese market. Those are the numbers that you can see at the bottom left. However, when you look at our sales trend after 2010 and onwards, our sales have been lagging behind the quick speed of the growth in the China market. In 2018, the current representative, Homma, was the leader. Together with the Japanese and Chinese young employees, we tried to identify the reasons behind this. This is shown at the bottom right, including the lack of business speed, management style issues, and cost control. CNA was established in order to solve those issues in the area of the Home Appliances and housing equipment business. CNA can make its decisions for the development, manufacturing, and sales in China. Here, I'd like to talk about the results of the past three years to describe the midterm review. During the past three years, CNA has focused on gaining speed and improving style, and also to build a culture to challenge ourselves to win in the Chinese market, especially in the area of the product. We shifted from the internal standard to global standards and also planned for the products based on the customer insight. In some of the categories, we generated the hit products starting with China, which had a well-balanced value and price. We had very major achievements and also something which was difficult to do in the Japanese market, that is to combine the Home Appliances and housing equipment. We also started the living space business model, going beyond the different groups of the organization. Through those initiatives, the stagnant and low growth sales growth in China was now back to the double-digit growth. This is the biggest achievement that we made in the past three years. At the same time, last year, we were faced with the rising raw material prices and the booking of the one-time expenses. Sales increased, but the profit declined. Now, in this midterm, we would like to maintain and accelerate the growth momentum and improve our operational capability and build the solid, profitable structure for all products and all sites that is resistant to the environmental changes. Our vision at CNA is being the best partner in life and being a close friend to people and society, aiming to become the number one brand in health, Asian cleanliness, and environment. This is the Japanese slogan that we have in Chinese language written here, combining the Home Appliances and housing equipment smartly and to provide new values to the living space. In addition to the environmentally friendly products, we would also try to contribute to the environment in the different perspectives in the living space and the manufacturing plants and also the supply chain. Next, before I explain about the midterm strategy, I'd like to talk about the positioning of each business division. Top left shows the FY 2022 sales by five business segments. Three businesses in living space account for about 70% of the total sales. In the medium-term, we'll be, of course, focused on those three business areas. The remaining 20% is by Cold Chain, Refrigeration, and Aircon devices. They are faced with a difficult business environment, and there are profitability challenges. In the medium-term, we will try to improve the business structure and to rebuild the businesses. The top right shows the area management. Export, mainly to Japan, is only about 30% of the total. More than 60% are for Chinese business in China. We have continued double-digit growth since the establishment of the CNA. We would need to focus on this as a business growth in the region. Now, this is for your reference. The CNA, as a regional company, has a business division system for regional and marketing characteristics. It does not go inside with the operational company of Japan, especially the Building and Housing Solutions BD and Taiwan BD, which are in charge of the multiple operating companies, as you can see on this slide. Now, let me talk about the midterm strategy. Toward 2030, we're trying to do three things. First, to capture the appliance consumption of the new middle class and enter the living space business and establish business that contributes to the environment. Those are the three pillars, starting with the top left. In the future, the main player of society and consumption in China will be the Gen Z or Generation Z. Those are the people who were born in 1995 and onwards. They become the new middle class, and they would form the CNY 4 trillion consumption market that is being forecasted. Through our Home Appliance business, we will respond to their needs and their lifestyle and capture their consumption. That is the first pillar of our business. We need to enhance our touchpoint, connecting with those young people, mainly in the e-commerce and other online business. Now, please take a look at the middle of this slide. In China, already, the people above 60 years or older have reached 260 million. 20% of the population are aging, and aging is progressing very rapidly. The Chinese government has a policy of Healthy China 2030. By promoting health, they are trying to control the financial impact of aging. In fact, in China, the rapidly aging population is faced with the lack of the infrastructure and facilities, and 90% of the aged people are receiving nursing care at home. From the perspective of the living space business, we will respond to those new needs, especially as you see in the top right. The renovation market will be the main market for competition. The third pillar is to establish business that contributes to the environment. In China, there are 30, 60 targets, and the environmental issues are considered to be the top priority as social challenges. China's investment in new energy, as you can see, is the number one in the world. We need to continuously work on this to contribute to the environment from the long-term perspective. Now, let me explain the key initiatives in the midterm. As I mentioned, there are three pillars. In order to achieve them, we would be executing the investment. In addition to the cost competitiveness of the global level, we try to gain the speed so that we cannot be beaten by the competition and also enhancement of the customer touchpoint through the initiatives of D2C and to provide the Wellness Smart Town and Wellness Smart House, or WST and WSH. That is the value of the living space to provide the one-stop shopping. The third is the store solutions to deploy the circular business, such as hydrogen fuel cell and refurbishing. On the following pages, I'd like to explain the key points and how we plan to win in those businesses. First, I'll explain three initiatives to strengthen business competitiveness to capture Generation Z's demand for Home Appliances. These initiatives will be locally led by CNA and from the perspective of competitors not satisfied by merely doing our best. The first point is global standardization of cost and speed. Regarding cost competitiveness, it became clear to us after three years of initiatives and benchmarking against competitors that there are still many industry-standard materials and parts that we are not fully utilizing. By reviewing material selection and parts design, which do not lead to added value from the planning stage, we turn them into unit module to be expanded to all products. With this, we will realize over JPY 19 billion of cost reduction in materials by 2024. By offsetting the impact of hike in raw materials cost, it is estimated that we will achieve over JPY 4.5 billion of profit increase without price increase. For increasing R&D speed, we will rebuild R&D steps by introducing concurrent R&D and shorten the evaluation period by reviewing evaluation criteria. Also, we'll speed up the design and evaluation by using DX tools. As you're aware, there are two EC sales in the China market, Double 11 and 618. Affecting the trend in the 618 in spring, minor change of the products takes place in the four months leading to Double 11. Promptly responding to the changes in the market leads to big improvement in competitiveness. The second point is customer-driven product planning by eliminating unnecessary functions from the customer's viewpoint. Product concept, which appeals to Gen Z, such as the essential to be a big hit product. Six seconds will determine the win or loss. Simple, easy to understand, the love at first design, the kind of concepts which appeal to Generation Z are indeed essential to be a big hit product. The third point is D2C by EC self-owned and owned OMO. We will turn major EC platform stores such as T-Mall and JD into our own stores and strengthen D2C sales at our own platform, Panasonic Mall. We aim at self-owned ratio of 50% in 2024. At the Panasonic Mall, we'll enclose the customers by improving customer experience and aim for membership to 7 million or more from 2.8 million currently. Next, I'll explain two business models that we'll be developing in the medium-term. First, please look at the left-hand side of the slide. This is Wellness Smart Town, WST. WST is a B2B business model. We collaborate with housing developers and participate from the concept stage of town development and provide our space and products and services in a comprehensive fashion. We are targeting three areas where our strengths can be leveraged. That is elderly care, cultural tourism, and rental. A flagship project, Yada and the Panasonic Community Project, which I will explain later, proved that WST concept increased the property value, that is property price. Now, please turn to the right-hand side of the slide. As I explained earlier, renovation demand is rapidly increasing in the Chinese housing market. Wellness Smart House, WSH, is a business model to provide housing space to B2C and individual customers on a one-stop basis. We offer one-of-a-kind Japanese space and interior experience by connecting Panasonic Mall, which is our own EC site built for Home Appliances, to physical stores of Panasonic housing, which are spread nationwide. Now, I'll show you a video which introduces the Yada and Panasonic Community, our WST flagship project, which will open in January 2023. Please show the video. The community is located in Yixing City, which is located 150 km from Shanghai and is blessed with rich nature. It is a gigantic project with a total size equivalent to 80 Tokyo Domes and 1,000 units of housing blocks. Under the concept of Wellness Smart Town, the community was built with partners from Architecture and Design State. In areas surrounding the community, there are hotels, restaurants, supermarkets, hospitals, and fitness centers, the same environment as in the city. This is the exterior view of the community. This is 800 units of low-rise housing complex. Integrated air station with six types of effects, a system combining Air Conditioning and air quality control is installed in all the rooms in the community, always offering health and comfortable air environment. Comfort sleeping system is introduced in bedrooms to offer a comfortable sleeping environment by controlling light and air. Panasonic products such as built-in Home Appliances and shower and toilet for the elderly are installed in the kitchen and bathroom. Adjacent to the housing example, Panasonic's showroom is set up not only to make proposals for WST to the B2B customers, but we'll start new initiatives starting from the showroom to offer health management services for the residents utilizing IoT. Going back to slides, please. Now, I'd like to explain why the WST project that I just explained to you and the WSH for renovation market are favorably received by Chinese customers, why our living space is chosen by customers. That is our differentiating factor and our advantages. The first is our technological capabilities to optimize air, water, and light and offer healthy, safe, comfortable, and clean living environment. In China, integrated air station and integrated air quality and humidity control system was introduced ahead of Japan. The second is the space design know-how cultivated in Japan. We have abundant knowledge know-how in Japan to live comfortably in a confined space, such as layered design, giving consideration to flow and safety in the house. Accumulation of research in air and light control algorithm to enhance health and comfort is also our strength. The third is comprehensive space package and space design, which is unique to Panasonic, as we have both Home Appliances and housing equipment in our product lineup by designing simultaneously Home Appliances, lighting, and building materials with a sense of unity and harmony as represented in built-in equipment. We are developing space packages such as balcony and kitchen, which no one else can rival in order to offer these to B2B and B2C customers as WST and WSH business. We are making standardized template as WS design and developing digital design tool on the cloud, and we are implementing DX, which is unique to China. Lastly, I'll explain the third pillar of the medium-term strategy, launching an environmental contribution business. Please look at the left-hand side of the slide, hydrogen fuel cell business. Leveraging the hydrogen fuel cell technology, which is Panasonic's strength as a weapon, we'll develop the market from three fronts. The first is stationary hydrogen fuel cell as an entry point. We are collaborating with CIMC Enric, which produces container tanks and developing containerized fuel cells. We also started the POC experiment in Wuxi site as a solution for factories. In addition, in Foshan in Guangdong Province, we are conducting POC for housing complex using AnyFarm. In the store solution business on the right, we package energy management for small stores such as Convenience stores witth s tore management service such as chilling, Air Conditioning equipment, and fixed asset management through Panasonic Environment Cloud. We are also engaged in circular business such as refurbishing. We'll continue these initiatives as we move toward 2030. This shows some of the business investments to support the initiatives that I have explained. In order to further accelerate the living space business, we are planning over JPY 50 billion of investment for the three years. Lastly, medium-term KGI targets. We aim for sales exceeding JPY 1 trillion in FY I2025 by growing living space business in China. As for EBITDA, we will offset the increase in fixed costs such as labor costs by sales increase by business growth and rationalization by increasing competitiveness, and we target JPY 80 billion EBITDA in F2025. This concludes my presentation on CNA's medium-term business strategy. Thank you for your kind attention. Now we'd like to take questions. Please bear with us as we make a preparation for the Q&. In addition to Mr. Dono, we have Mr. Nakayama, CSO, and from Beijing, we have CFO Mr. Nishimoto joining us. We are ready to take your questions. We are taking questions both from Tokyo Shiodome Building and remotely. We are not taking English questions via online. Once again, we are not taking English questions via online. First question comes from Shiodome Building. Ono-san from Morgan Stanley MUFG. Thank you. My name is Ono. Morgan Stanley, thank you very much. I have one big question. Now, in the market, financial market, lockdown in China and stagnating consumption, and because of them, it is possible that the China business will decline, but you're showing the strong numbers. There has been a discussion about why. Your market share is not so high, so probably there are upside in some of the segments. In that sense, there is a further room for higher market share in different segments. Is that the case? Could you share with us the current status, especially including the competitors or competitive environment, where or which businesses are likely to grow? Also, more recent situation, maybe you won't be able to answer the question, but the W-11, the current status is down by 30% or so, or more than 30%. As you see it in China, the consumption trend, how is it changing? When do you think that it would normalize? As much as you can share. Those are the two questions. Thank you, Mr. Ono, for your questions. First, naturally, we are working in China, so for us, the Shanghai lockdown, still there are some COVID-19-related regulations, the quarantine, and so forth. It is true that they still continue. For this year, this fiscal year, there was a risk of about JPY 25 billion. As for the buffer for growth, unlike China or Taiwan, Panasonic's market share in the big Chinese market is about a little less than 5%. Facing the price competitive customers, by providing the product speedily, it is possible to increase our market share. Of course, we want to go along with the market trends so that we can increase the top line, but that is too optimistic to expect. Since our market share is so low, there is much room for increase or improvement. Based on that policy, the CAGR for this year is double-digit, and the past three years, the CAGR has been double-digit. We are not really number one in terms of the market share, so there is a lot of buffer to grow. W-11, it is possible that the Tmall, they offered some number, and they declined year on year. As an industry as a whole, that was a downside, that's the market trend. As I said earlier, under those circumstances, by increasing market share, we are still struggling, and that's the China struggle. Fortunately, of course, there are some differences, but W-11 industry as a whole is down, but in our case, we saw year-on-year increase, or it was flat as the year before. That's what I can report to you. Next question. SMBC Nikko Securities, Katsura-san, please. I'm Katsura from SMBC Nikko Securities. Thank you for this opportunity. My impression, China is very tough, but why, in spite of that, you are so strong? I understand your thinking. After Homma-san went there, I understand the movement very well. Thank you. Now, slide two. This is my question. First question. GDP in China is now 3% or 4%, and your company, three years, will aim for JPY 1 trillion. CAGR 7%-8%. You are able to grow higher than the growth rate of GDP. Even under the current environment, do you think that it's achievable? That's my first question. Share is 5%, and you can go to 10%. Maybe that's what you're thinking of. You're thinking about this and also the products. Secondly, short-term, zero corona, COVID. When this is going to be lifted will be a point of attention. In the longer time span, 2030, and the Chinese economic growth up until 2030, and geopolitical risks, and your position, how you think about your business in conducting a business, these are the two questions for you. Thank you. Why we alone are able to grow in spite of the difficult environment? I talked about focus upon market share. Homma, thanks to Homma, my predecessor, and also the Founder, has a long history with China. China is a country, if you combine the management and politics, you can have strong business. I feel that from Beijing as well. A close relationship with a collaborative relationship with political people, politics in China contributed greatly, and this has been done from the predecessors. GDP is not able to reach 5.5% target. It's natural that we can exceed the growth rate of GDP, but our new growth target will have to be set. Frankly speaking, that's my impression. GDP, it's only natural that we can exceed the current level of growth rate of GDP. We'd like to come up with a new target number of our growth. Looking into 2030, as CNA and as Panasonic, what we are going to do, there are a number of key points: COVID-19 policy and China risk, and the 2027 problem is also talked about. We are not complacent. We are not satisfied. The supply, are there any third option not using the supply chain in China? I do not have any. Risks are there, but the historical Panasonic's position that our predecessors have developed will be utilized, leveraged in full, and we will be utilizing in full the supply chain in China. What we are going to do with Home Appliances, I am talking with Mr. Shinoda as well. Not only CNA, but as Panasonic, what we are going to do at IR meeting next time, I hope that we can update you on that. Is there any other alternative? That is my frank impression. Thank you. Understood very well. Thank you. Now, next question comes from Sakai-san of Daiwa Securities. Thank you, Sakai, from Daiwa Securities. I have two questions. First, on page six of your presentation, you're showing the relationship between your BDs and operating companies in the next medium-term plan and toward 2030. How would it change? If you have any thoughts that you can share with us as of now. Second question, kind of detailed question on page nine and customer satisfaction and focus on that. At the bottom, there is a creating value for China. Could you give us some examples of Chineseness, individuality? Basically, in this medium-term, basics, this relationship or the role playing will not change. It's not the different roles, but the business portfolio reform or transformation is likely to happen or it could happen. That's something that I'd like to report to you in the next IR meeting. Also, Chineseness on page nine. In the past, it used to be using the picture of a panda bear, but that is not the case. It is close to European design. It's a very sophisticated design. Here it says Chineseness. Rather than that, it's like a built-in kitchen appliance in Europe. It's a very cool and solid design. Something like that is very China-like and is well received by Generation Z. That's the kind of design that they like. Nakashima-san, do you have anything to add? Yes, if I may add. Five business divisions and the different operating companies, the relationship with them. The last and EW, the life space business that we talked about. Sixty to seventy% is this. In terms of percentage, this will move at a similar percentage. That is how this can be interpreted, and that is how we would like you to understand it. Thank you. We are entertaining questions online. No questions. Once again, we would like to entertain questions from the HO domain. Nakan e-san from Mizuho Securities, please. Nakane from Mizuho Securities, thank you. I have two questions. First question, page 10. WT, different from the conventional hardware business, for instance, from a cash flow perspective, how much investment to make and in what way you are going to recover the investment and the business model? You are conducting funding locally. Profit model of the business, if you can enlighten me as to the profit model of the business. That is my first question. Second question is regarding page seven. There have been many questions regarding the demand in China. I'm interested in that as well. According to my understanding, young people in their twenties, for instance, unemployment rate is increasing. For example, smartphone sales is sluggish now. Page seven, for example, by age groups, age bracket, or from your perspective, if you look at the consumption market in China, how it is and how it's going to change, the current situation of the view of the market and the forecast in the next one to two years. These are my two questions. Thank you. Yeah, first question. WST is the profit model. It is true that community development lead time is long, and the accounts receivable and the recollection of receivables, various ideas are needed. If you do it as it is, you deliver, yet there may be a delay of two years for collecting cash, more specifically, for instance, built-in products, refrigerators, washing machines, and the like. Once you deliver them to developers, then we receive the accounts receivable. The same cash conversion cycle as other ordinary products. Having said that, however, other than WST, but including design, we are participating in the space creation. Intangible income, at what timing we are able to recover that? This is a pattern that is often seen in the project. Some part is to be collected in the initial stage and some recollection in the midterm. Once the tenants start to come in and the customer value is realized, then further collection in three phases will be collecting intangible side. In terms of PL, the engaged in space development with developers and sense of trust, the kind of relationship with Geniuk to Panasonic is built. You no longer need bidding. You can avoid tender. PL advantage, I am not going to tell you specifics, but compared to tender type of projects, B2B, as compared to that, the profit margin becomes much higher. Of course, after-sales service, as I explained earlier, we are providing after-sales service as well. Naturally, we can expect additional income, which will result in even increased profitability. Young generation and Panasonic's focus for that, there are two. I do not want to be presumptuous, but there are opportunities for us. Firstly, as I mentioned earlier, Generation Z and the product cycle for them, design and live commerce, appropriately recapture their demand and also the speed with sense of speed. Development lead speed is time is now 3.5 months, half of the conventional lead time. Young people, we come up with a number of series of products which appeal to the young people. Here there lies a big opportunity for Panasonic. In stock market, WST, also we are doing closely with developer. In stock market, B2C, EC, virtually B2C customers are attracted and bring them to real world and lead to business negotiation and create value, including the strengths that I have explained. We have the strengths. Looking into 2030, this poses a big opportunity for us. We believe these are our strengths. We are going to capture these opportunities and make investment for these as well. Thank you. はい、それでは。 Next question. Kobayashi-san from Rating Agency. Thank you. Kobayashi from R&I. Thank you very much for your presentation. On page five, I have a question. The breakdown of the sales, Taiwan is quite big. That's what I confirm. I am quite surprised. When you calculate this, 19% or 20% of the sales come from Taiwan. There are two questions. This percentage, what was it like in the past? What is the percentage that you expect in the future for CNA, the Taiwan business importance and the percentage? What do you expect? The second is that mainland and Taiwan have a different political system. Also, per capita GDP, $30,000 and $10,000, it is quite different. Products and sales are different, I am sure. The sales strategy, how do you differentiate them between Taiwan and China? Thank you. First, on page five, this pie chart, Taiwan portion, relatively speaking, is increasing. Other BDs, in terms of the locations, Taiwan and the building and housing. We also make investments. The percentage of those businesses is increasing. In absolute terms, the Home Appliance is the leader, needless to say. In terms of percentage, the Home Appliance is declining. There is a total picture. Why Taiwan? It's a different culture from the mainland. Why are we growing? Why are we profitable? I think it leads to the misunderstanding, but among the Home Appliances, Panasonic, the brand image, of course, is strongest in Japan. I was doing the Home Appliance business in Japan before. You might think so, but actually, the brand image is strongest in Taiwan. For example, refrigerator, we have market share of 40%, washing machine, the front loading type, more than 30%, which are higher than the Japanese market share. Customers' loyalty toward Panasonic is higher than that of Japan or Japanese users. In the continental or mainland China, we cannot increase prices, for example, but we can do it in Taiwan. In terms of profitability, that is the strength in Taiwan. Those are the feelings that we want to keep. Nakayama-san and myself, we want to take advantage of the fact that I'm in Japan now, so I will be visiting Taiwan tomorrow and confirm. Strategy-wise, it's very close to the Japanese strategy, the leadership strategy that we can use in Taiwan. In mainland China, increasing the market share, reducing cost is an approach that we are taking. Unlike that, it's more like a leadership strategy in Taiwan, and I think we can win with that stra tegy. Thank you. Now, online. Kojima-san from Sankei Shinbun, please. Kuwajima from Sankei Shinbun, can you hear me? Yes, we can. Page nine, as we explained, shortening the lead time for development. Product design and planning is to be done led by CNA. For instance, development and the appliances and other products developed and sold in Japan. Then the products that are developed and led by CNA, what is the ratio between Japan and CNA? How is this ratio going to change going forward? The short lead time for development is eight months, which is very short, I feel. At the same time, as Mr. Shinada said earlier, for the Home Appliances business in Japan, two to three years of development period and develop the kind of products which the customers really want. The difference, is that just the difference of the Chinese market and Japanese market, or do you have the intention of making both comparable? Thank you for your question. First, full model change eight months and minor change 3.5 months. This is when planning and all the way to mass production design by CNA and the products for CNA region and the target and actual results. Of course, Japan design and manufactured in Japan bring back to Japan. There are such products as well. Relatively speaking, that ratio is being reduced. Rather, as we are discussing with Mr. Shinada, the speed development of development in China and using supply chain in China. With this way, in Japan, we attack Japan and the third countries' operation and organizational structure can be built. We are having conversation in that direction. For that also, early next year, we are going to launch a project. The strengths and the benefit advantage of CNA can be used globally from the layer of Panasonic. We can share with you some ideas in the next IR meeting. Thank you very much. Our time is almost up. I will take one more question. If you have any questions, please raise your hand. 。 No additional questions? Seems now. With that, we like to end the session on CNA. Thank you very much. Lastly, we would like to take your questions regarding the content of today's presentations. The question will be led by Mr. Shinada, CEO, and Mr. Nakashima, CFO of Panasonic Corporation. I'll work for Mr. Shinada to start off. Thank you very much, everybody, for your participation for such a long time and long meeting. This time, HVAC has been included, and all the divisional company heads were talking. Therefore, our time schedule for end is around 5:30. Because of that, thinking that it was very difficult to hold a session. However, for next June, we would like to be fully prepared for the next IR Day. How did you like our IR Day today? I think you have various impressions on us. For one year, the Panasonic group has been changed, and now we are within a big, big corporation. Between corporations, we are having coordinations more, and I think you have felt that. In Europe, the HVAC business will be sold. In America, there's Hussmann and India. There's former Anchor, and we have the current PEW company. In every region, we have a core company. Leveraging on the capability of that core companies within the region, we intend to expand within the mid to long run. That is our thought. Within each of the companies, I suppose you have felt that. In Japan, we would like to secure the very strong leadership position and how we are going to be expanding on the overseas market is something that we have been explaining. I would like you to be cooperative and support us in th e future too. Now we would like to open up for questions. The question will be taken from the Asiod ome. We are very sorry, but we are not able to take questions from the English channel. From the site, we would like to entertain a question. Morgan Stanley, MUFG Securities, please. This is Ono from Morgan Stanley. Thank you very much for today. Including the feedback of the market, there is something that I wanted to mention. As Mr. Shinada mentioned, you are having five divisional companies. Within the Panasonic group companies, you are the largest of the organization. For the focal area, you have seven focal areas to work. My impression is that is slightly too many. My question is regarding your focus of the business. is a leader for the growth and the stabilized area. You have several categories. However, I would like to know the flexibility of this categorization. Mr. Kusumi has become CEO of the holdings. Within the two years, he says that he is tracking down the corporations. With the schedule and the holding schedule, Shinada-san, how are you going to be looking at these five divisional companies? That is one thing. The second question is also related with the first question. You are having a large organization. From the takeover from the former organization, it is Panasonic and Panasonic Electric. There are organizations rather overlapping some area. The interact division and the changes, opportunities of changes there, I would like you to comment on it. Thank you. Please. Thank you very much for your question. A s you say, focal area work, seven area, you have pointed out that that's too many in numbers. Some say so too. On my presentation, page 12, there's a leader market and the stable market, meaning that for the business, the life stage of each business is different. We have added some explanation to this. That's the honest part. As mentioned, the growth leader is saying that our strength and our winning strategy and the market within that area, the business is understood how much the returns can bring up, come back to us. Within the midterm plan, the profit driver will be the two businesses. The growth leader candidate has the energy solutions and the CO2 refrigerator and freezer. We did not talk about the energy solution state, but within the Katayama-san session, CO2 freezer has a large opportunity within the mid to long run. However, the scale is not that big. Therefore, it is a little bit short to tell a story within the whole business. That is how we explained, and that is truly the situation today. In Japan, the Home Appliances and the showcases are, in a sense, a cash cow. The cash created there should be reinvested. I need everybody to understand this correctly. We will be changing our explanation in a different way time by time. We will always be placing our emphasis on these two areas, the growth leading area and the stable area. This is a company with a sense of conglomerate, and we do not want to be discounting ourselves, and we want to be adding benefits upon our relationship. Therefore, that is why we landed with explaining like this. We intend to communicate deeply with you and to the opinion that I have just mentioned and shared with you today. If you do have any other feedback that maybe we should be explaining like this and that, which would be better, then we will be very appreciative. I have been talking to other executives too, and other people say that the seven focal area of business is rather too much is some feedback from the internal side too. Within the seven, according to the phases at the time, we will be focusing, or maybe we might change the focus, but we will keep up with mainly focusing on the seven. When I started working for the IR, I wanted to work for the management for mid to long-term. That's what I have shared. That means those are the area that I really want to focus currently. As mentioned for this mid to long-term, what I should do within what I have decided, I have to be keeping up with my words. Second issue. Second is about the indirect cost. The appliance and LA indirect sections or the functions was quite big. What do we do with it? The interest in that and also the expectations or kind of upside existed. In the past year, as we worked on this, there are different ways of thinking in each picture. For example, IT, integrating them because skills are all different. When we distribute them, there could be a variability of the skills depending on the divisional companies. That is what we found out. IT, we want to make sure that we do the reform of the IT. We need to standardize the skill set. Otherwise, we will not be able to speed up. From the 1st of December, the new team will be starting. Something like that is being done in the indirect part. What we learned in the past year and how to utilize them, we are making progress in our discussion. From the cost perspective, how does it look? It will take time to show it, but how can we maximize the performance? I think we are making good progress in that sense. Thank you very much. Thank you. Seven priority areas will be focused on that. Those seven priority areas, we want to support them in the medium to long-term. We have made that decision. We will make sure that we will show you the results. One thing about HVAC, the growth leader, Europe is one of the things that we mentioned. Air-to-Water, we want to make sure that we increase the market share. Why we are improving the market share was already mentioned today. At the same time, in the medium to long-term, excuse me, 1 million unit is what Michiura-san mentioned. A JPY 50 billion investment for the Air-to-Water was also mentioned. With this JPY 50 billion, it will not correspond to the 1 million. We want to make sure that we make the JPY 50 billion investment in a different site than the Czech Republic. We will be investing so that we can achieve 1 million unit. Thank you very much. We are getting a lot of questions, so we would like to limit the number of the questions to one question per person. We are taking one question from the Shiodome building. Isawa-san from Citigroup Global Markets Japan. Thank you. One question, I'm told. At the IR Day in June, the relationship with the holding company was what I asked about. Mr. Shinada gave me some questions. I would like you to give us an update on that. New Panasonic Corporation, you have divisional companies. There is a kind of overlap with the holding company. Because of that, there's a cost. Vis-à-vis the holdings, you did pay dividend or there's a movement of the capital. That kind of relationship will be revisited. That's what you said. In June, you said that you want to come up with the answer by the end of first-half. Could you give us an update? Holdings and us, we are trying to visualize it, where we have overlaps and so forth. By the end of first-half, I think we have completed the research mostly and what needs to be reformed, improved. We now know the direction. There are differences of the numbers, but at the same time, internally, there are various transactions and the relationship between the holdings and us. We want to look at it in a fair manner. We are starting to see that. This year, for example, we have come to have a good discussion. That is a good progress, I think. In the Panasonic Corporation, the relationship between the headquarters and the operating companies, there are some areas that we cannot go into. How does that represent the competitiveness? Between the holding and the operating companies, there are some areas and also the headquarters and the divisional companies. There are things that we have to handle in an appropriate manner. In the Panasonic Corporation, the business competitiveness is we would like to create a situation so that we can compare the competitiveness easily. Sorry, I am sure you are running out of time. I did not understand what you said very well. Competitiveness, you want to create the conditions so that you can compare them, compare the competitiveness. There are dedicated companies, for example, Cold Chain business. The competitor is not the conglomerate. It is the single industry company who is our competitor. When that is the case, internally, we have the areas that, so the profit that we disclose. There are some areas that cannot be separated. We want to make it easy to understand and easy to see so that we can disclose the actual competitiveness of each business. That is what we are trying to do. 以上いただいております Watanabe-san from Kyoto, press please. Online? Watanabe from Kyodo Tsushin. Can you hear me? Yes. One question. The production system of glass about Europe in HVAC and CNA, China, local production and local consumption seems to be the main state. The production system domestically, the weak yen is somewhat subsided, but the response to FX fluctuation and production and the procurement rate increase. The room for local production and local consumption in Japan. In a big picture, the Home Appliances facilities in Japan, we are going to make some light investment because there is room for further enhancing productivity. On the other hand, local production site, there are some products where we are considering moving from China to Japan, the production in view of the exchange rate, lead time, and delivery. Without a problem, we can deliver the product and collect. Under the current FX environment, there are businesses where it is better to do that. We have some prospects. Currently, for some products, we are going to revert back to domestic production. There are products where we are planning to revert back to local production in Japan. When that happens, the basis in Japan needs to be rationalized to a certain extent. Now is the time when we are taking stock of the production facilities in Japan, and we are proceeding with the discussion as to how to go about this. Thank you. More specifically, the products and timing, that's not decided. Specifics have not been decided. What we did first is the vacuum cleaners in Yokaichi, Shiga Prefecture. The plant is there. You may not know this, but Yokaichi in Shiga, we have the plant for vacuum cleaners. When I was President of the appliance company, the production was to come down to 200,000-300,000 units, but production has recovered to close to 1 million units. Enhancement of the product capability, and along with that, profitability has increased. That is vacuum cleaners. Then Air Conditioning for Japanese specification, top-end products. In the case of air conditioners, we have the machine and also outdoor installed equipment, and it should be their discussion as to the higher efficiency if it produces these in Japan. For the other domestic Home Appliances, we are thinking about that as well. How much time we are going to spend upon sorting this out? At this point in time, we cannot be very clear in saying what we are going to do by when. For the block of chunk of products that we are considering, there are items that we are considering as a possibility for rationalizing. Thank you very much. The time is running short, so online, we'd like to entertain one question. Lastly, from the Shoda Domain, JP Morgan Securities, Ayada-san, please. Online, asking question online. Thank you. JP Morgan, Ayada. Slide page 10. We have heard the direction of business. The thinking about profit, I would like to ask you to enlighten us, especially big portion this term, materials, FX, and logistics, JPY 120 billion and JPY 94.3 billion improvement. The spot price has come down going forward from next year. If the current market condition continues, what kind of expectation do you have? The price revision at the IR Day in June, three years, you said + JPY 50 billion. This time, this time close to JPY 100 billion. What is the direction from next year onwards? First, the numbers. Price revision, price revision and rationalization, JPY 93.4 billion after revision. Originally, we were saying that JPY 80 billion for this year in the initial focus, JPY 40 billion from price revision, and JPY 40 billion from rationalization. That was a breakdown we announced in June. A breakdown of JPY 90 billion, price revision, plus a bit more than JPY 50 billion, and JPY 40 billion from rationalization. On the other hand, rationalization in the first quarter with lockdown in Shanghai is lagging behind. Shortfall, there will be further price revision. A total of JPY 90 billion. That is our plan. On the other hand, materials, exchange rates, and logistic cost. As explained, the materials cost and logistics is relaxing somewhat from the original focus, but the exchange rate in our case, renminbi and Japanese yen is weakening. The hydronic Air-to-Water is produced in Malaysia. Euro is weak against the dollar, then it's weak. Negative headwinds. Unfortunately, FX, unfortunately, the impact is greater than we anticipated, which resulted in these numbers. Next fiscal year, how we are going to make action plan, we have to think about that. In the medium to long-term, raw materials, including response to the environment, the price is not likely to go down in any major way. Exchange rate also, as inflation subsides, the extreme weak yen will be relaxed, but the environment is such that the yen is unlikely to appreciate in any major way. With these assumptions, we will come up with action plan for next year and onwards. If I may give you the additional comment from the broader perspective, as Nakashima-san said, the raw material cost and the logistic cost are stabilizing. During this time, as I said in my presentation, for example, among the raw material prices, we have already taken measures to alleviate, and there are some materials that we could lower the cost. Year-on-year comparison, JPY 102 billion is negative. Also Malaysia, and also export to Europe due to the Forex, from the first-half of next year, Air-to-Water will be locally manufactured. That would be positive. 102 billion, I think there is quite an upside. At the same time, the lingering war and also the economic situation in the second half or Q3, looking at that, compared to the time that we created the medium-term plan, the economy is decelerating more than what we expected or is going toward the worst situation. That is a major change. There is an upside, but the business environment is also tough. How do you evaluate that so that we can achieve the target each year? That is the way of thinking that we have. Thank you very much. Last question from the Shiodome Building from Goldman Sachs. Mr. Harada. Yes, this is Harada speaking. Earlier, Shinada-san talked about the medium-to-long-term strategy. From that perspective, I'd like to ask a question. At the beginning, you mentioned that marketing India is likely to grow at high rate. India, I think as a national policy, is generating hydrogen, and they plan to export. For you, the hydrogen fuel cell technology is what you have. That demand in India, and when it's exported to Japan, that is also a business opportunity. Energy or resource risk distribution, from that perspective, you could probably play an important role. From that perspective, anything that you can share with us about India? About India, originally, the service industry, the percentage of it, about more than 50% of the GDP. It's unusual. Generated by the manufacturing is only like 25%. India government is trying to focus on, from our perspective, there are three things. One is manufacturing. For that, in India, the strong manufacturing capability, that is something that they're trying to gain. Make in India is what they are trying to promote. Every year, there is a production increase, and they provide the lower tax. As the manufacturing expands, they are offering the major incentive. In that sense, in the Air Conditioning business, this is a tailwind for us. Second is the supply chain and logistics. In India, they're very much focused on this. The national land is big, but the infrastructure is quite poor. In the context of what we talked about today, the fresh food cannot be distributed. There is an issue of the food loss, which is becoming more serious in India. The Cold Chain business right now is not so big, but the Cold Chain business in India has a lot of potential, I think. We have Hussmann Oceania site. From there, how do you expand the Asian business? That is the kind of scenario that Katayama-san is trying to formulate right now. The third is e-commerce. It is going to grow very rapidly. In that sense, using the physical store and also the e-commerce in the developed countries, for example, Japan, Europe, and U.S., e-commerce percentage is increasing. Actually, much faster speed of the growth of e-commerce is going to happen in India. In all of the businesses that we do in India, how do you build the infrastructure so that we can accommodate the coming EC or e-commerce era is what we need to do. The hydrogen probably is too early, but to do with EV, how to stabilize electricity, there are other challenges that we have to work on. Within business, India and hydrogen, whether we can expand the business right away, that is not something that we are thinking about. Other areas that I just talked about will happen earlier in coming decades. We want to make sure that we capture that opportunity. That is what we would like to do, I would like to do first. I understand very well. Thank you. Now with this, we would like to conclude the Q&A session. With this, we have covered all the programs we have prepared. With this, we would like to bring the business strategy briefing to an end. I thank you very much for your participation and being with us for a long hour. Thank you very much.