Thank you very much for joining us at this online press and analyst briefing. We'd like to now start the fiscal 2022 second quarter financial results briefing of Panasonic Corporation. Let us now introduce the speakers from Panasonic. First, we have Mr. Hirokazu Umeda, Senior Managing Executive Officer and Group CFO. Next, we have Mr. Sumitaka Yoshitomi, General Manager of Accounting & Business Performance Management Office. Then we have Mr. Yoshifumi Inoue, the Head of Corporate Strategy Group. First, Mr. Umeda will present the fiscal 2022 second quarter financial results. We take questions from the media first, and then we take questions from institutional investors and analysts. We'll be showing other materials on the screen, and also the material is available from our website. Now, Mr. Umeda, please. Now let me present fiscal 2022 second quarter financial results. This is the summary of financial results. Overall sales increased year-on-year due to increased sales of businesses for ICT applications and automotive batteries, which offset the decreased sales of consumer electronics and automotive solutions. Adjusted operating profit decreased. This is largely affected by lower sales of automotive solutions and consumer electronics business due to weak overall demand in Japan and lockdowns at factories in Asia, as well as raw material price hikes. This occurred despite increased profit with increased sales in such businesses as information and communication applications. On the other hand, operating profit and net profit increased due to the recognition of one-time gains in other income and loss. Free cash flow was negative due mainly to the completion of Blue Yonder acquisition in September 2021 and increased inventories. For the full year forecast of FY 2022, both overall sales and profit are revised upward. Upon the start of the new structure in October this year, the full year forecast based on the new segments is announced. Next is the details of the financial results. This slide shows the consolidated financial results of Q2. Overall sales increased to JPY 1,741.2 billion, up 4% year-on-year. Adjusted operating profit decreased by JPY 14.7 billion to JPY 80.3 billion. Other income and loss increased by JPY 18.7 billion due to the recognition of one-time gains. As a result, both operating profit and net profit increased. This shows the results by segment. I will explain the details on the next slide. This shows our sales analysis by segment. Overall sales increased due to the increased sales of businesses for ICT applications of industrial solutions and connected solutions, as well as automotive batteries. This offset decreased sales of consumer electronics impacted mainly by COVID-19 and automotive solutions. In appliances, sales decreased due mainly to weak overall demand in Japan and the impact of lockdown of factories in Asia caused by the respread of COVID-19, while sales of the consumer electronics were stable in China. In Life Solutions, overall sales was the same level as FY 2021 due to steadily increased sales of housing system in Japan, despite decreased sales due to lockdown of factories in Asia and semiconductor procurement issues. In Connected Solutions, sales increased, driven by higher sales of mounting machines with strong demand related to ICT, as well as higher sales of projectors. In Automotive, sales decreased in Automotive Solutions due to the impact of reduced automotive production. On the other hand, sales increased in automotive batteries, responding to strong demand of cylindrical batteries. In Industry, sales increased due to favorable sales of capacitors, relays, and industrial use motors for Automotive, labor saving at factories, as well as ICT infrastructure. This shows the operating profit analysis by segment. Overall adjusted operating profit decreased, largely affected by lower sales of Automotive solutions and consumer electronics, as well as raw material price hikes, despite higher profit with higher sales in ICT applications. Operating profit increased due to the recognized gain from re-evaluation of the existing 20% equity in Blue Yonder upon the completion of acquisition. In Appliances, profit decreased, largely impacted by lower sales of heating and cooling solutions and home appliances, due mainly to weak overall demand in Japan and respread of COVID-19 in Asia, while such efforts as rationalization were made amid the continued raw material price hikes. In Life Solutions, profit remained at same level as FY 2021. Efforts such as rationalization were made in response to the impact of raw material price hikes and lower sales due to the semiconductor procurement issues. In Connect, profit increased due to the higher sales of mounting machines and projectors, as well as improved profitability of avionics. In Automotive, profit decreased in Automotive Solutions due mainly to lower sales. Profit increased in Automotive batteries due mainly to higher sales and the effect of rationalization. In Industry, profit increased with higher sales exceeding the impact of raw material price hikes. Next is the impact from the completion of Blue Yonder acquisition in September 2021. The consideration value related to the additional acquisition of 80% of shares amounted to JPY 776 billion. The total consideration value for acquiring all shares by combining JPY 87.3 billion for the 20% acquired in July 2020 amounted to JPY 863.3 billion. Regarding the major impact on the consolidated financial performance, mainly in the second half of FY 2022, additional sales is estimated to be about JPY 60 billion. Also, amortization of intangible asset is currently estimated to be about JPY 16 billion. In addition, as explained on the previous slide, in other income and loss of Q2 FY 2022, Panasonic recognized a gain of JPY 58.3 billion from the re-evaluation of existing equity in Blue Yonder. The pro forma value of goodwill and intangible assets and others is currently estimated at about JPY 960 billion. This shows the free cash flow and cash position in the first half. Free cash flow was a negative of JPY 661.2 billion as shown on the left. This is due mainly to the completion of Blue Yonder acquisition, tax payment related to sales of assets in FY 2021, and increased inventories from the end of FY 2021. Net cash decreased to a negative JPY 736.5 billion from JPY 194.5 billion at the end of FY 2021, as shown on the right. The funds for the Blue Yonder acquisition were raised from the reserved cash of JPY 376 billion and bridge loan of JPY 400 billion. The bridge loan was already refinanced with the subordinated bonds issued in October 2021. These are in accordance with the financing plan, which we explained at the time of announcement of Blue Yonder acquisition on April 23rd, 2021. Next is the acquisition of Blue Yonder with relation to our capital allocation policy in the current midterm strategy. Panasonic's capital allocation policy for the three-year period from FY 2020- 2022 is to allocate necessary cash with cash flow generated from businesses. The graph on the left shows the cash situation for two-year period from FY 2020- 2021. With operating cash flow, sales of assets, and reduction of lease liabilities by portfolio optimization, we had generated excess funds of about JPY 1 trillion. JPY 776 billion for the acquisition of Blue Yonder was within this range. In addition, by financing JPY 400 billion through subordinated bonds for this acquisition, JPY 200 billion, which is equivalent to 50% of the issued amount, was qualified for equity credit recognized by rating agencies. Therefore, we have secured the financial flexibility regarding cash generation, including operating cash flow. We will continue with our efforts. From here, I will explain the full year forecast for FY 2022. This slide shows the consolidated financial forecast for FY 2022. Both sales and profit are revised upward from the initial forecast. Sales are revised upward by JPY 300 billion to JPY 7,300 billion, reflecting the effective exchange rates during the first half, as well as increased sales of Industrial Solutions and other businesses. Adjusted operating profit is revised upward by JPY 10 billion to JPY 400 billion. This is due mainly to increased sales as well as efforts in rationalization and cost reduction, which offset factors such as the impact of raw material price hikes. Other income and loss is expected to improve by JPY 30 billion. This is due mainly to gain from revaluation of existing equity in Blue Yonder upon the acquisition. As a result, operating profit is revised upward to JPY 370 billion, up JPY 40 billion. Net profit is revised upward to JPY 240 billion, up JPY 30 billion. ROE is expected at 8.9% and EBITDA at JPY 750 billion. Revised forecast by segment are shown on this slide. Upon the start of new structure in October, we are changing the reporting segment. First, I would like to explain the forecast based on the current segments. Major variance factors shown on the next slide. In Appliances, sales are revised upward due to the effect of exchange rates. However, sales in real terms are expected to decrease due to weak overall demand in Japan and Asia. Adjusted operating profit is revised downward, largely impacted by decreased sales due to weaker demand in Japan and lockdowns in Asia, despite cost control and rationalization efforts made in response to impact of raw material price hikes. In Life Solutions, sales are revised upward due mainly to the effect of exchange rates. Adjusted operating profit is slightly revised downward, despite efforts such as rationalization in response to impact of raw material price hikes and semiconductor procurement issues. In Connected Solutions, overall sales are revised upward due mainly to increased sales of mounting machines and the consolidation of Blue Yonder. However, sales of notebook PCs and in-flight entertainment are expected to decrease. Adjusted operating profit is revised downward, largely impacted by decreased sales of notebook PCs and IFE, despite increased sales of mounting machines and other products. I will explain the situation of Automotive separately for Automotive Solutions and Automotive Batteries. In Automotive Solutions, sales are revised downward due to reduced automobile production. Adjusted operating profit is also revised downward due mainly to the impact of decreased sales, as well as price surges in parts and increased shipping costs. In Automotive Batteries, sales is revised upward with increased demand of cylindrical batteries. Adjusted operating profit is also revised upward with increased sales. In Industry, sales are revised upward with growth in businesses for labor saving at factories and ICT applications. Adjusted operating profit is revised upward with increased sales exceeding the impact of raw material price hikes. In head office eliminations and others, profit improvement is expected due mainly to reduced expenses related to head office. In other income and loss, we factored in gain from reevaluation of existing equity in Blue Yonder upon acquisition and increased expenses associated with the early retirement benefit program. Now, the new reporting segments. In accordance with the transition to a new structure in October, we are changing to the reporting segment. Here you can see the outline of the changes and how the businesses of the current segments will be reorganized. Lifestyle segment comprises five divisional companies based on current appliances and life solutions. Automotive Solutions business of current Automotive will be transferred to the new Automotive segment. The current Connected Solutions will be transferred with no change to Connect segment. The new Industry segment comprises electromechanical control, industrial device solutions, and electronic materials businesses of the current Industry Solutions. Energy segment comprises Automotive Batteries business of current Automotive, energy solutions, and energy device businesses of the current Industrial Solutions. The new Other segment comprises entertainment and communications and housing businesses due to their respective business sizes. The next slide shows figures according to this organizational chart. This slide shows the forecast figures reclassified to conform to the presentation based on the new segments. From the third quarter of FY 2022, financial results will be reported based on the new five segments. This slide shows the forecast of Lifestyle segment by divisional company. Going forward, our reporting will include the disclosure of the figures of five businesses within Lifestyle. This slide explains our initiatives in response to various changes in the business environment triggered by COVID-19. As mentioned earlier, temporary setbacks such as factory lockdowns and reduced automobile production, in addition to more potentially long-term issues such as raw material price hikes, are observed in the current business environment. We will respond by thoroughly enhancing our operational capabilities through strengthening production cost competitiveness through such initiatives as rationalization, making appropriate cost control efforts according to sales increases and decreases, and improving cash flow by reducing inventories. We, at the same time, see new business opportunities emerging, such as expanding investment demand in ICT infrastructure, as well as labor saving at factories, expanding EV demand, growing needs to improve supply chain management, and changes in lifestyle. We will capture such expanding demand at each business. In Industry, we aim to expand the sales of key products, such as capacitors and industrial use motors. In Energy, we will respond to expanding EV demand. With the new production line installed in North America, we've expanded our combined Japan and U.S. production capacity to the equivalent of 50 GWh. Regarding 4680 cells, we will accelerate R&D. Deployment of equipment for prototype production is scheduled in FY 2022. In Connect, we aim to globally provide solutions to our customers' management issues, mainly through Blue Yonder's initiatives in supply chain management. In Lifestyle, we launched My Spec products, which enable consumers to select and add functions after their purchases according to their lifestyles. We will continue to develop products and services that respond to changes in lifestyle and contribute to solving such societal issues as saving energy and reducing food waste. This slide shows our schedule for IR activities going forward. On October first, we started our new structure based on the new organization. As for disclosure, financial results will be announced based on new segments from the third quarter of FY 2022. A briefing on sustainability hosted by Group CEO Kusumi and a briefing on supply chain management related business by Connect segment are scheduled for the second half of FY 2022. Thank you for your attention. Thank you. This is Umeda speaking from Toyo Keizai. I hope you can hear me. I have two questions. First, now at Q2, I would like to know the breakdown of the higher costs. For example, the transportation cost and material costs are increasing. As much as you can give us the breakdown in comparison to Q1, what were the changes by segment? That's my first question. The second question is on new segments. New segment Automotive. Now, in Q2, it's not generating profit, and as for the reasons behind that, for example, the raw material procurement for the Automotive business and also the reduced production of the car manufacturers. For the full year, you expect to be profitable. The lack of the semiconductor issue is not likely to be resolved. How do you make the forecast? These negative factors, how do you plan to resolve those negative factors to achieve the profitability for the full year? Thank you. First of all, the cost increase at the time of Q2. In comparison to Q1, in the second quarter, this impact is larger. Briefly speaking, in Q1, the raw materials and due to the logistics issue, probably about JPY 20 billion or higher. In Q2, about JPY 30 billion or higher. Total is about JPY 50 billion. That is the increased cost. That's the first point to your first question. The second part is about the automotive segment, especially the automotive solutions. Now, lower sales and lower profit. This is due to the car manufacturers' production all over the world due to the shortage of the semiconductors being reduced. Based upon the request of the car manufacturers, we try to respond to the demand from the car manufacturers. When you look at the global market, actually, the inventory level is quite low. The procurement environment of the semiconductor will gradually improve. Up to Q3, there will be some remaining impact. When we manufacture those products, the cars will be purchased by the customers. That is the market environment, we believe. Based on that, from Q3 to Q4, our sales are expected to increase. Positive impact is what we expect. For us, for example, procurement of materials on the daily basis, we try to monitor that closely. As of now, for us, we manage to procure the materials. Based on your assumptions, the car manufacturer's forecast is the basis of what you have described. Yes, exactly. You're right. Thank you very much. Thank you. The next questioner is from Nikkei, Mr. Iwamoto. Thank you. I have two questions. First, I asked the same question at the time of the first quarter results. The profit generation capability, what is your current view? As you referred to earlier, the raw materials and the transportation costs are going up. While the risks are increasing, how do you view the status of your profit-generating capabilities? My next question is on the risk side. The semiconductor impact, higher raw material costs, as well as the distribution costs going up. I don't think you can expect everything to be resolved by the end of this fiscal year, but what about next year? How much do you think there will be a lingering effect? Thank you for your questions. At the time of the first quarter results announcement, you did ask the same question. This time, the profit level has decreased somewhat. If you can look at slides. One of the slides described the variance analysis. The raw material prices are going up. We expect it to have a more long-term effect. At the same time, there are other factors. For example, in Asia, the COVID-19 infection is still remaining in some countries, but things are improving. Therefore, the factory lockdowns on a weekly basis are now being resolved, and therefore, we have a better visibility. I think during the second quarter, there was some one-time short-term impact. As for the fixed cost. The level has been controlled at the same level as in Q1. The effect of our efforts in the enhanced management structure is being felt as well. There are some risk associated with the longer term effect. For the COVID-related impact, we believe we'll move in a more favorable direction. Those are the assumptions. Now, with regards to the higher raw material prices, initially, we forecasted the impact it to be about JPY 50 billion on a full year basis. Now, or at the time of the first quarter, we expected the amount to be over JPY 80 billion. Now we are thinking of over JPY 100 billion to be the impact. Hope that answers your question. Yes. About the semiconductor shortage and the production decrease in automobiles, this is a follow-up question to Dusan's question earlier. What is your projection as to the improvement going forward on those matters? Semiconductor impacts, at least in China, various economic indicators are declining, as you are well aware. There is a competition over the supply of semiconductor, and so I think this tight supply situation will remain for some time. As that issue is alleviated, I think we're gonna see an improvement. I think until the end of this fiscal year, the very tight situation will continue. For next year onward, we'll have to watch the situation closely, but we expect slight improvement. Hope that answers your question. Yes. Thank you. Next, Hiraoka from NewsPicks. This is Hiraoka speaking. I hope you can hear me. Yes. First question, kind of a follow-up question in relation to the higher material cost and the shortage of the semiconductor. One-time factor and also the structural factor, I would like you to differentiate them. For the raw materials, at the time of the super cycle of 2017 Q1, it was at the very high level. Some of the materials prices came down after that. For the future, the material prices, do you think that will continue? For example, copper, what are your thoughts? And also, the shortage of the semiconductor, this would be resolved eventually, but the foundry consolidation and also the end of Moore's law, probably at the high price situation, would that be your challenge? The second question, based on your material due to the COVID-19, there are pinches and opportunities and minuses and pluses. The higher raw material cost probably would give you some opportunities. For example, mounting machines, the demand is increasing, and also the electronic components in the Industry, and also supply chain improvement. For example, Blue Yonder business could increase. As a whole, the shortage of the semiconductor for you in the medium to long term, are there any positive potential impact for your business? Thank you for your questions. About the copper price, still $10,000 per ton. It stays at the high level. For the time being, this is likely to continue. If you look at the differentials, whether it would continue to go up or not, this fiscal year compared to last fiscal year, there is a major impact. Next fiscal year and onwards, there won't be any additional impact. We do not believe that it's difficult to say that the prices will come down, but rather the copper price will stay at the high level. Aluminum and steel and the high level continues, so the raw material price hike in the medium to long term will have an impact. As for the semiconductors, as you mentioned, the supply-demand balance is likely to improve. Also how to deal with those changes. The leading edge semiconductor or components need to be utilized. In the medium term or long term, we believe that we have to be able to handle those changes. Internally, we are making efforts toward that. These efforts are not something that we can do right away, but that's for the direction. The semiconductor foundry, the leading edge foundries, there we will be increasing our investment. For the commodity or general purpose, there's a tightness there. And so in order to sharpen our businesses, for example, standardizing components and using the leading edge components and parts, those are the things that we have to shift toward in the medium term. Also, the shortage of the semiconductor, whether it would be an opportunity for us. For example, the software centric, for example, Blue Yonder, those solution businesses, the percentage could increase, and that would have a good impact. As a result of this impact, the negative impact can be alleviated. As for the EV demand, those are not related directly to the semiconductors. So those businesses which are not related to the semiconductor directly, on page 18 for example, those are the businesses that we would like to steadily increase in coming years. Thank you. Hiraoka-san, did he answer your questions? Yes. Thank you. Next from Mainichi Shimbun, Iguchi, please. Thank you, Iguchi from Mainichi. For FY 2022 forecast, you have made upward revision for operating profit and others, 5% or higher, I think, is your current projection. Previously, it's been said that profitability has always been the issue with Panasonic. With this upward revision in your guidance, what is your current view on the profitability? That's my first question. My second question, it's gonna be a very detailed question. Tokyo 2020 Olympic and Paralympic Games, any impact, financially, either positive or negative? Anything that you can share with us? Thank you for your questions. For this fiscal year, JPY 10 billion, the operating profit, adjusted operating profit, upward revision has been made, forecast. Mainly in relation to the changes in the valuation, as well as the cost for consolidating various facilities globally have been incorporated as well. 5% that you mentioned, that is the net result. We're gaining confidence that that reflects our profitability, profit-generating capability. EBITDA and others are being disclosed. The challenge going forward is how to generate more cash to improve our capital efficiency. I think we are getting closer to transitioning into that phase. Your second question, relative to Tokyo 2020 Olympic and Paralympic Games, any impact on our financial indices? Of course. In fiscal 2020 and fiscal 2021, already businesses materialized. For this fiscal year, before proceeding to the actual Olympic Games, there were some businesses that materialized. Other than that, there are no material impact on our financial indices. Does that answer your question, Iguchi-san? Thank you very much. Next, Tsuzuki-san from Yomiuri Shimbun. Tsuzuki speaking. I hope you can hear me. Yes. Thank you very much. I also have two questions. First is about automotive batteries. In Q1, again, in Q2, you're doing well. Point of clarification, I think that about 40% of the batteries are for Tesla. Did this number change? Tesla actually generated the highest profit, and you also made upward revision. So cylindrical, the forecast, to what extent will it grow? Could you talk about that? Second question is about industry segment. In the medium term, I think that you mentioned the ICT application is strong, and that is one of the factors behind the upward revision. So ICT, is that, for example, the base station for 5G? Could you give us any specific explanation on what kind of needs are you seeing? Thank you. From Q1 to Q2, in the same way we saw the trend. With the new structure, the Automotive battery will move to Energy. In the current segment, the Automotive solutions and Automotive batteries are now separated in some of the graphs. Higher sales and higher profit. In relation to Tesla, the batteries are showing both increase. As for the adjusted operating profit for the Automotive solutions, the lower sales had a major impact, and so we did not generate profit. Automotive batteries, we were profitable. The very substantial increase in terms of the profit increase. As for the cylindrical batteries, Japan, U.S., total is 50 gigawatt hours. Nevada, North America, Gigafactory, new line has started to operate from August. We are still working on the improvement of the efficiency, so that would mean that 38-39 gigawatt hours, we try to reach that level. That is what I can say about the cylindrical battery for Tesla. As for the industry segment, as you said correctly, the base station related, the electronic materials and devices and solutions, the conductive capacitors. Those, and also the servers, the various data need to be stored in servers and data centers. The materials for them, and also mounting facilities, sales of the components, all of those are doing well. Thank you. Hope that answers your question. Yes. We're getting close to the end of the time allocated for questions from the news media. The next question will be the last questioner. Saruhashi-san from TV Tokyo. Thank you. I also have a question on semiconductor shortage. In home appliances or consumer electronics, are you seeing the impact? The automobile OEMs are reducing the production, are you seeing the impact of that as well? Shortage of semiconductors, it is having an impact on our consumer electronics as well. For example, the washing machine, the drum-type washing machines, starting around June, in July and August, we could not ensure the supply due to the parts. In Life Solutions as well, we are seeing some impacts as well. The impact of semiconductor shortage for Panasonic business is felt in the home appliances, the consumer electronics and Life Solutions, those solutions and some of the Industrial Solutions segment as well. Regarding the Automotive Solutions, it's not really the supply of semiconductors issue, but the greater impact is being felt with regards to the decline in the production by the automobile OEMs. That is having a direct impact. Thank you. We're sorry, that's the end of the questions and answer session for the mass media. Now, we'd like to take questions from the institutional investors and analysts. Unfortunately, we are not taking questions in English. Please wait and bear with us as we start the Q&A for institutional investors and analysts. Miss Okazaki of Nomura Securities. This is Okazaki speaking. I hope you can hear me. Thank you very much. First question about Q2. The businesses that were impacted by the overall environment, automotive business and the home appliances or consumer electronics. Raw material increase, I think that the prices could be increased. When the demand is strong, for example, in the first half, there are products that you were unable to ship. In the second half, you might be able to increase the shipment. That might be possible. What are the factors that you have factored in? Also the second question is about enhancing the management structure. In Q2, you mentioned the JPY 5 billion additional number. Toward the second half, what are the measures, and what can we expect in terms of enhancement of management structure? Thank you for your questions. In Q2, financial situation on page 18 is a summary. How do we improve this? In Q3, the automotive solutions will continue to be impacted, but toward the Q4, car OEMs will increase their production. There was a question from the mass media, the car manufacturers, based on what? This forecast is based upon the demand forecast of the car manufacturers. There will be a recovery there. For example, Connected Solutions, PCs, the procurement of the components and the semiconductor inhibited us to make the shipment. Using the alternate components, we have taken various measures, so when we ship products, we can deliver products to the customers. In many cases, that is the case, so we try to secure the components so that we can recover from the decline. As for the price hikes, especially B2B business, from Q2 to Q3, the price hike or price increase is something that we are asking our customers. Through those efforts in the second half or Q3, car manufacturers lower production will continue, but those are the measures that we would like to take to recover. For your reference, usually, when you look at the overall trend, in the first half, 47%-48%, in the second half is 52%-53%. In the first half, about JPY 200 billion in terms of adjusted OP. Although there were some temporary negative numbers, we try to make sure that we have JPY 200 billion in the second half. As to the second question, in relation to JPY 5 billion for the enhancement of the management structure. Yes, the global sites consolidation was done. There are eliminations for provision for the elimination of the loss-making businesses for the full year it'll be zero, there will be no negative numbers. Four businesses were mentioned. LCD, solar, and semiconductor business, all of those are showing the positive impact. TVs, it's a quite changeable business, fluctuating business, so there are some ups and downs. For the full year, as we announced, it's zero. For the fixed cost, about JPY 20 billion that will be the target in terms of the enhancement of the management structure. Thank you. Just point of clarification, B2C price increase recovery, what about that? Air conditioning competitors, for example, they have a strong back order and they're willing to increase prices. What do you think? Well, yes, in B2C business in North America, what is happening is that there is a shortage of goods. If you are looking for a discount, you won't be able to get the products. In the consumer electronics, there are some changes, but that's the kind of a phenomena that we are seeing. Rather than price increase, we have spent the sales promotion cost, and that can be reduced. Also, the copper price is a very important one. It's a big one. We'd like to look at the other companies, and we'd like to also consider the possibility of price hikes or price increases. Thank you very much. Next is Ms. Nishimura from Credit Suisse. I have two questions. First, the adjusted operating profit, JPY 10 billion upward revision. Can you give us the breakdown? Earlier, you said that the higher raw material prices was going to have a bigger impact, JPY 20 billion more than what had been anticipated. What about other factors? What are going up? And regarding the fixed cost, what is the situation? If you could give us the breakdown, appreciate it. And regarding the Blue Yonder consolidation effect on the adjusted operating profit, if you can comment on that as well, I'd appreciate it. My second question is with regards to profitability of the automotive batteries. You have given us a breakdown, but if possible, can you explain what the profit rate, the profit margin in the second quarter was and what your plan is on a full year? Also for the next fiscal year, people talking about new customers, which would translate into expanded sales. What are your projections in terms of the profit margin as well as sales expansion for next fiscal year? Thank you for your questions. The adjusted operating profit revised upward by JPY 10 billion coming from many different factors. It's hard to really go into the details, but very broadly speaking, the higher raw material prices, initially JPY 50 billion negative impact, but now we are thinking of over JPY 100 billion. That's negative JPY 50 billion, additional JPY 50 billion cost. As for sales, we have revised upward JPY 300 billion upward, and we are hoping that would have the positive impact on the profit as well. Of course, for the one-time losses, we will be making the rationalization efforts as well. The net result is a JPY 10 billion increase. Your second question regarding the automotive battery profit margin. Depending on the quarter, the rates, the margin fluctuates because of the timing of the delivery, and there are some additional costs that need to be incurred as well. It's very hard to generalize, but we are getting close to 5%. Recently, in North America, Canoo, the electric vehicle company, announced that a contract has been signed, and Canoo made that announcement. It is a fact, yes, we do that. We're not gonna rule out any of those opportunities in terms of the safety of our products and efficiency of our products being appreciated. We do pursue all of the opportunities. Hope that answers your question. Yes. Thank you. Mr. Ezawa of Citigroup Global Markets Japan. Two questions, please. The financial results, Q2, other income and loss as a whole, JPY 10 billion or so. Blue Yonder re-evaluation, aside from that, what are the other items included to reach this number? Also, in the second half, other income and loss, are there any major ones expected? It seems that there is a major negative number, so could you give us the breakdown? That's my first question. Second is about the disclosure of new segments. I have a question on that. First, automotive business now is as one operating company, it's shown separately. Automotive on page 15 now, in others and elimination and adjustments, rather than including that as home appliances, it's separate. What I would like to know the reason why it is now separate from others. Also, based on the new segment, from some time, the BU, I believe you said that you're considering disclosing the financial statements, three financial statements. Could you talk about that as well? Now, first of all, about other income and loss concerning this. The Blue Yonder acquisition, and with that, various financial impact are not included because we were not yet sure that this deal was going to be completed. In September, we completed this deal, so we included that. From the evaluation agencies, we received the evaluation and 20% stake, so that is the gains or the increase of the through the reevaluation. Global business structuring, for example, career design plan toward the new structure. Without setting up a target, we try to provide more options for the employees, and this is not also included. Also in Singapore, I cannot mention the specifics, but we are making the business restructuring measures. All of those are the factors behind this other income and loss. JPY 30 billion that was the excess part. What we need to do for the full year, the business restructuring plan, that will be carried forward to the second half. What we have not seen is the profit or the income of JPY 30 billion other income and loss. In the second half, we would make sure that we take the necessary measures, and that would be the answer to your first question. As for the automotive, why is it included here? I think we have a very simple view. IFRS 8, there is a disclosure standard stipulated. The net income or total asset or sales, if the business segment is at 10% of the whole, we have to disclose that business. In others, for example, entertainment, housing, those are not included as the separate. That is why they are in others. No other meaning, well, other than that. Under the new segment, whether we are going to disclose those three statements, it's not going to be an actual P&L balance sheet, but it will be a cash flow or ROIC. We would like to disclose those financial statements. Thank you. Does that answer your question? Thank you very much. Nakane-san from Mizuho Securities, please. Okay, one question. Regarding automotive business, you've been saying that the semiconductor shortage impact on Connect in relation to PC, you expect improvements on those next year. I agree. In Q1 and Q2, I think the automotive batteries were doing very well. Maybe some of the customers were procuring more for the sake of BCP, and maybe there was the oversupply as well, which means that there is a risk that they would reduce the orders placed in the second half. Because in terms of automotive solutions, I think you are dealing with a different Tier 1 players. In terms of Industrial Solutions, Systems and Devices, I'm wondering whether there are any deviations from the actual demand, and if so, what are they? Thank you for your questions. First, regarding Automotive Solutions, the Connect related products that you referred to as examples. Yes, I agree. What you indicated, we agree with that. In Industrial Solutions, since around the second quarter, we are seeing impact on the Automotive Solutions. The parts business, we are Tier 2 supplier. They are Tier 1 suppliers directly to the OEMs, and we are Tier 2 supplying to Tier 1 suppliers in many of our business areas. Therefore, there is a time lag in the effect being felt. We expect the impact in the second quarter and the third quarter. Looking at the economic indicators and others in China, the demand peak seems to have passed. It's already behind us. As for the industrial demand for the second half, maybe it's flat or maybe some decline. That is our projection. We might feel the impact of that going forward. With that in mind, we made the revision to our full year forecast. I hope that answers your question. Yes. Thank you. Katsura-san from SMBC Nikko. Mr. Katsura from SMBC Nikko, are you there? Can you hear me? Yes. I think you are cut off, so let's take the next question first. Ayada-san from Morgan Stanley. Ayada from Morgan Stanley, thank you very much. Yes. I have a question about appliance. In Q2, the actual number in comparison to Q1 is much weaker. This year, for the full year, you made upward revision in terms of the adjusted OP, but the overall demand is down, you mentioned. How would that kind of risk is incorporated in the second half? Already you might have inventory at the transit and we are seeing some lowering of the prices. For example, there would be lower prices or some cooperation fee for the sales. Could you talk about that happening in the second half? Yes. About the Q2 of appliance, with the higher raw material cost and temporary lockdown of plants in Asia, the impact was big in Q2. To some extent, especially concerning the lockdown of plants have been or will be alleviated or improved. Q2, in comparison to last year, there was a benefit of JPY 100,000, and there was a demand of people staying at home. In August or July in Kansai and Kanto, there were some differences, but the summer was not very hot. We did not have a lot of sunshine, so the summer was cold. Air conditioners and the refrigerators related businesses were not very brisk. As a industry, well, the percentage of Japan is high, so other manufacturers I think have faced a similar situation. Specific to Panasonic, as I mentioned, washing machine, the drum type, this is well received, but due to the utilization issue and the raw material procurement, we could not ship it for two months. Because of that, the Q2 number was poor. Now as for Q3, for the full year forecast, we made a downward revision because of the lower numbers of Q2. In Q3, in some of the countries, sometimes the production plant operation is suspended. We are not too optimistic. But gradually, we believe that we will recover. As for the inventories in the market, well, we are not feeding that much. Rather, the washing machines, in November we will launch the new product and we no longer have products to sell. That means that old products are all gone or sold out. Toward the Q3, we are not too optimistic, but the Q2 was quite difficult. That led to the full year downward revision. Now, for the future, higher raw material prices, we would like to reflect them to some extent, based on the higher sales price, and we need to monitor that very closely if we can do so or not. I hope that answers your question. Thank you very much. We already passed the scheduled time, so the next question will be the last. From Katsura-san at SMBC Nikko. Can you hear me? Yes? I had some technical issue. In the new segment, disclosure. Thank you. About Energy, I'm looking at the supplementary information, page 5, which shows that high profitability would be maintained. I guess that reflects customers other than Tesla. While raw material prices are going up, why are you successful in controlling this? Maybe there's a foreign exchange factor as well, but could you elaborate on that? Regarding the capital investment, I understand that the overall size hasn't changed, but in relation to battery business, there are no investments. Am I correct? As for Canoo, it's the announcement made by Canoo, and so this is just the procurement issue. As far as Panasonic is concerned, there is no change. The reason why I ask this question is that many players are preparing for 2025 and getting ready for that. Now, you are going to change into the operating company structure, and I believe that you feel that you have to move now, you have to change now for the timely delivery. In relation to energy, can you elaborate on those factors? Regarding the higher material cost, yes, that's one factor. Regarding the main materials, between Tesla, we do have the contractual agreement, that allows for the price increase or price decrease to reflect the higher or lower raw materials. That's not really a big factor. The profit gain on the expanded sales are having greater impacts. Already the fourteenth line started operation in our production capacity and the prototype manufacturing facilities. Where we are investing into in relation to 4680 R&D. Also we have the product line that will be the prototype production line that will be added for the improved efficiency. Regarding Canoo supply, this will be starting FY 2023, most probably. We have multiple battery production manufacturing facilities. Most probably we will supply from Japan, not from North American facilities, given the capacity that is available. Now, towards 2025, should we not prepare for that, was what you indicated. In fact, that is how we see the situation as well. 4680 development for the technical verification validation we are getting very close to that and we already have that battery form. About three days ago, Tadanobu Uno, who will be heading the new energy company, talked to the news media, members of the news media. I have actually looked at the actual products, the 4680, 2170, and others. Technically, I think it's feasible. Now, mass production is a different story. As we move into the mass production phase, we'll have to make necessary capital investment. While looking at the productivity, since there is a very strong demand coming from the U.S. players, we'll have to take that into consideration in making our investment decisions. That's where we stand. Thank you. Thank you very much. That concludes the second quarter business results briefing session by Panasonic. Thank you very much for joining us today.