Hello, everyone. I am Chikashi Takeda, the CFO. I would like to give you the review of our consolidated financial results for the 3rd quarter of fiscal 2023, as well as the full year forecast for fiscal 2023. Please note that today's briefing will focus on continuing operations. Please refer to the appendix section for detailed information about the discontinued operation. Now, a review of our financial results. Page 2, highlights. These are the highlights of our financial results for the 3rd quarter. During the 3rd quarter, we continued to see the impact of supply shortages of semiconductors and other components together with rising materials cost. The situation is gradually improving, and we have taken measures to minimize risks as much as possible. Revenue increased 17% on a consolidated basis. We achieved double-digit growth for both ESD and TSD, setting record highs for both the third quarter and the first nine months in the medical business. Operating profit and operating margin also set record highs for both the third quarter and the first nine months. For full year forecast, we have revised our foreign exchange assumption from the previous forecast. Based on the results up to the third quarter, we have slightly lowered revenue on constant currency, but have left adjusted operating profit unchanged. We are still on the track to achieve adjusted operating profit margin over 20%, the target set in the corporate strategy. We expect revenue of JPY 871 billion, up 16% year-on-year, and the operating profit to achieve record highs both in amount and ratio. Profit as the sum of continuing and discontinued operations expect to reach a record high of JPY 376 billion due to a gain on transfer of Scientific Solutions business Evident with EPS of JPY 297, up 229% year-on-year. Let me go over the details of financial results and the business review. Page 4. Overview of consolidated financial results. Consolidated revenue totaled JPY 641.5 billion in the first nine months of 17%. Revenue in medical represented record highs for the third quarter and the first nine months, with double-digit growth for both ESD and TSD. Gross profit was JPY 433.7 billion, with gross margin improving 0.7 points. Despite the impact of rising materials costs and others, gross margin improved due mainly to a change in regional sales mix driven by increased sales in China in Q3 and yen depreciation effects. SG&A expenses were JPY 306.1 billion, with SG&A ratio deteriorating by 0.3 points. In particular, expenses associated with sales activities and strengthening of the operational infrastructure, such as QA, RA increased. In other income and expenses, a gain of JPY 14.9 billion was posted, mainly coming from a gain of JPY 16.4 billion on the sale of land in Tokyo in Q1. The recording of JPY 1.3 billion from the adjusted acquisition consideration due to a change in the fair value of conditional payment that was part of the acquisition consideration for Medi-Tate in Q3. Operating profit was JPY 142.6 billion, up JPY 40.4 billion, or 39% year-on-year. Operating margin improved 3.5 points to 22.2%. Please note that adjusted operating margin, excluding other income and expenses, which is a milestone in our corporate strategy, was 20%. Profit from continuing operations was JPY 105.6 billion, with EPS of JPY 83, up 29% year-on-year. Total profit, including both continuing and discontinued operations, was JPY 108.4 billion, with EPS of JPY 85, up 25% year-on-year. We have been operating this fiscal year under conditions of multiple growth inhibitors and rising costs while making investments in growth areas and strengthening operational infrastructure. The environment remains uncertain, but we will continue to strive to achieve revenue and profit growth and reach the must-hit target of over 20% adjusted operating margin set three years ago. Moving on to the full year forecast. Please turn to page six. We have revised the FX assumptions from the previous forecasts. Based on results up to the third quarter, we have a slightly lowered revenue excluding FX, but adjusted operating profit remains unchanged. The forecast assumptions for annual average FX are JPY 135 to the dollar and JPY 140 to the euro. For more details, please refer to page 24 in Appendix for FX sensitivity. Revenue is expected to achieve JPY 871 billion, up 16% year-on-year. Operating profit is expected to achieve JPY 198 billion, up 35% year-on-year, with an adjusted operating margin over 21.1%, record highs for both amount and ratio. Although multiple risk factors continue to stay in front of us and the outlook remains uncertain, we will proceed with all efforts with a goal of achieving the must-hit target of above 20% of adjusted operating margin set in the corporate strategy. Profit is expected to reach record high of JPY 376 billion, reflecting a gain on transfer of Scientific Solutions business. EPS is expected to be JPY 297, up 229% year-on-year. Profit of continuing operations expected to be JPY 149 billion with EPS of JPY 118, up 37% year-on-year. Regarding the dividends for fiscal 2023, we plan to pay dividend of JPY 16, unchanged from the announcement in May. Next page shows forecast by segment. We expect both ESD and TSD to continue double-digit growth year-on-year. The combined revenue of the two divisions in the medical field is expected to reach record high. We previously announced that EVIS X1 would be launched in the US within fiscal 2023. We have been revising the schedule to ensure all regulatory requirements are completed prior to the launch of the product. We are now aiming for a launch in the middle of fiscal 2024. We do not expect this postponement to have a material impact on our business performance. In ESD, the impact of supply constraints, including semiconductors, is improving. We expect continued sales expansion of EVIS X1 in Japan, Europe, and APAC. In China, we expect growth supported by pent-up demand due to delays in tenders and business negotiations caused by the Shanghai lockdown in the first quarter. As well as government support, such as, low interest loan programs for medical equipments. In TSD, we expect continued growth centered on the three focused areas. While in Japan and China, number of procedures is declining due to rapid surge of COVID. In Europe and North America, where the number of procedures are recovering, sales of mainstay products are expected to be strong. We will continue to work on achieving adjusted OPM of above 20%, despite the unstable and uncertain environment by controlling SG&A expenses through company-wide efforts such as hiring constraints, review of various projects, limited non-essential overseas trips, and review of R&D priorities. Discontinued operations expected to record gain on transfer, resulting in significant increase in profit. This is going to be my last slide. I would like to explain about the warning letters that we received from the FDA and our efforts to strengthen quality assurance and regulatory affairs. Olympus received warning letters regarding an inspection of the Aizu-Wakamatsu facility based in Fukushima, Japan, and in July, an inspection of the Hachioji factory based in Tokyo, Japan, in September. The content of the warning letters cites the quality system issues related to process and records for design and manufacturing, as well as late submission of MDR. We are closely communicating with the FDA through both written and live interactions in order to ensure requirements are met in a timely manner. We have been promoting efforts to strengthen quality assurance and regulatory affairs, including the globalization of quality and regulation. We have implemented a global complaint improvement program that is a new process and technology platform to ensure compliance. We established an independent worldwide quality and regulatory organization structure, including hiring many leaders with knowledge and experience of a QARA at MedTech companies under the Chief Quality Officer reporting directly to the CEO. We have been implementing global quality system and governance model for all Olympus sites and businesses, and remediating design and manufacturing processes and records. The total amount of investment for these initiatives is currently under review. We will inform our forecasts of when a reasonable estimate can be made. The latest costs include JPY 1.4 billion in expenses for the current fiscal year. In order to become a leading global MedTech company, we will further strengthen our quality assurance and regulatory affairs and globally establish quality and compliance to ensure patient safety. Thank you very much for your continuation. Before we move to taking your questions, we would like to focus on one question that we received in advance regarding the results up to Q3 and the projection for Q4. Sierra, go on to that question. Yes. I think I've covered majority of that in my presentation, and although I skipped the oral presentation, the longer version, that is available from the company website, which includes the script, do answer your question. As for the guidance, compared to the guidance, as for revenue, largely in line with the guidance, but when it comes to specifics, TSD revenue is a bit short. That has been the trend so far. That is the reason why we made a very small revision to the full year forecast. Profit is doing better than the guidance to a certain extent. Regarding the SG&A expenses, compared to the projection three months ago, we are spending more. As is included in the slides, the sales activities are becoming more active is one reason. For enhancing the operational infrastructure, we are hiring people and also QARA and some other functions. To address the specific challenges facing the company, we are making the investments and expending, which explains an increase in SG&A over the projection. That has been the case up to the end of the 9-month period. Regarding Q4, the adjusted operating profit number hasn't been changed, meaning that during the last 3 months, we are to catch up, especially regarding the SG&A expenses, by implementing further measures, we are to catch up and make up for the difference. That's my high-level response. Nacho is close to the field, so I think he can add some more comments. For something. Thank you, Takesan. Can you hear me well? Yep. Yes. Very much. I would like to add some comments on the revenue development in Q3 and along the first three quarters of the year. I think, at this point of the year, we are completing a solid revenue growth year, having in mind all the different situations that we have experienced in this year, including the lockdown in China in the first quarter, the COVID surge in China and in Japan in the third quarter, and some continuous supply chain tensions that have provoked some delays. I think within, having all that in mind, still we have been able to solidly grow our ESD business, especially with a remarkable after effect change impact, 10% growth in our, gastrointestinal business in ESD, and, including as well, a recovery of the business in China in ESD for GI that, even with a very severe lockdown in the Q1, we have been able to show growth in the year to date in the China region for ESD. In TSD, the situation has been a little bit more complex because the tensions in the supply chain and the lockdowns has provoked a situation where, well, in TSD business is mostly run rate, obviously, when we are not able to fulfill immediately the orders from customers, those orders are lost because the procedures cannot wait. Even though I think that we are at this point, 2% growth in the ESD business, in the TSD business, and our analysis shows that without the situation in China and TSD and without the tensions in the supply chain, we would have been able to be on north of 4.5% growth in the TSD business, which give us a lot of confidence in terms of when the normality in terms of supply chain, which is where we are now, and the China situation is normalized, we can return to the growth that is expected in the TSD business. Altogether, I think it's a healthy situation. EVIS X1 is progressing very well in those regions of the world where it has been launched, and we are expecting this to be the case in the United States as soon as it is launched. In TSD, with the exception of the situation in China and the supply chain, we believe that both the urology and the ET business, which are the mainstays of the business, are progressing very well and based on the plan. These are my comments regarding TSD. Thank you very much. We would like to open the floor for questions now. Since I can only ask one question, I want to ask about the warning letter from FDA. Two letters. One is for Aizu Olympus design validation deficiency, and also like a response for earlier findings and the design record deficiency and MDR. The other letter is about this is basically URF for medical device as a whole delay in MDR. I would like to understand the current status of response for each. Because if you go back, there was a MDR re-delay for duodenum endoscopy, and I understand that you had to pay a penalty for that in the past. At first glance, it looks like there's been no improvement since then. For Aizu Olympus, I understand that it's something that you could deal with documentation. For the URF, endoscopy, this was exposed metal which could cause penetration. Despite that fact, why was MDR delayed? I think it had to be reported within 30 days. How much was the actual delay? I would like to know. How do you intend to respond to this situation? That's my question. Thank you, Mr. Takeda. CQO Pierre Boisier is joining us today, so he would like to take this question. Pierre, the floor is yours. Hear the question, okay. Hello, can you hear me? Yes, we can. Okay. Before I start, I would like to go through and introduce myself. My name is Pierre Boisier. I am the Global Chief Quality Officer for Olympus. Olympus is committed to becoming a leading global MedTech company. Since March of 2021, when I joined the company, we've been focused on support of a global QA or a globalization effort which supports the pillars of all of our quality and compliance improvement efforts. This initiative began with my hiring as the Global Chief Quality Officer. In addition, Olympus has hired many new senior executives to lead the quality and regulatory global organization. The new leadership possesses decades of industry experience from top-tier companies, including leading companies going through change initiatives. We are moving from a regionally based managed quality organization to an empowered, centrally managed global organization with oversight of all Olympus facilities. Improving quality culture and mindset, strengthening and consolidation of quality systems across Olympus, establishing new governance structures, and standardizing practices at all Olympus operating sites. Most importantly, provide insurance that the compliance issues identified by the FDA are being addressed. Following the FDA inspection and the issuance of the U.S. FDA warning letters, Olympus has accelerated efforts to invest in our globalization initiatives. This is an important and essential investment for Olympus to become a leading global MedTech company and achieve sustainable growth. Over the next few years, we will be making significant investments in this area to further strengthen our global assurance and regulatory affair function, as well as to establish quality and compliance to ensure patient safety worldwide. Lastly, we are closely communicating with the FDA to ensure our actions are timely through written and live interactions in order to ensure FDA expectations are met in a timely manner. With that said, I think there is two parts to the question. The second question was, how late were the MDR reports? The reports are due to the FDA within a 30-day working period. If I remember correctly, the complaints that were cited were between 45 and 60 days old when they were reported. It is also important to remember that when the FDA came in and audited our files, they were going back over a three-year period. During this period of time, we had gone through COVID, and for about a year, we were trying to figure out the best way to work, and so things were not always going as required. That's not an excuse, it's just the reality of as we were going through the COVID lockdown, companies had to find new ways of working. Did I answer your question, or was there additional? I think you were talking about at least the addressing the MDR for the URF scope, the failure, I guess, whatever failures that occurred there. That's. You said it's 45-60 days. Obviously it's not that far away from 30 days, and it's COVID related. What about the Aizu documentation? I think that's something that's going to be resolved really quickly. While we're on the subject of regulations, if you could comment on any impact on Olympus from the India that is changing the medical regulation. I think it made it very difficult to sell products. I think a lot of companies have talked about cost increases from that. On top of that, of course, there's the Italian clawback law that was, I think, went into effect somewhere maybe in last year. Some companies have put a lot of write-downs on that, based on this Italian law, if there's any impact on Olympus. Those are my follow-ups. Thank you. Go back. Just to be clear, I am not trying to say it was all COVID as far as late MDRs go. Just to be transparent, part of our problems for MDRs are operationals. As we are working through regionally controlled quality systems, our systems don't always link up to be able to hit the 30-day window. I think that when the FDA went into our facility and found the 15 late MDRs, some of that was probably caused by COVID, but I don't wanna say that everything was always caused by COVID. I would have to say that our systems are as we work on globalization, and we create one system, one quality system to have everything come together, that will fix all the problems, but we're not gonna get there until mid-next year at the earliest through the end of next year. Hopefully I've clarified that, the MDRs. As far as Aizu goes, the issues that were identified in Aizu were tied specifically to process validation and to design verification. There were no safety issues found. There were no product issues found. It is not, I believe, like past inspections, where they actually found a product issue that had to be resolved. So far our analysis, and we are still going through a lot of analysis, we're identifying which processes need to be validated. As we look at each of the processes, we're also analyzing the product to ensure that there are no safety issues. We've been working very closely with the FDA on that. As far as India, I am not aware of that. Nacho, is that something you're aware of? Yeah. I think I can take. Thank you, Pierre. I think I can take the last two questions about India and Italy. In the case of India, I mean, it Actually in India, there are continued changes in both the regulation but also the reimbursement. It's a changing environment. Our presence in India is quite stable, and our market share in our main platform of GI is quite solid there. The market is still not as relevant as the population in India would say. Our market share numbers are good, and the products that we have already registered there are working very well on as planned. There is very limited impact in our business plan on the changes for the India the changes in the regulation. As per Italy, yes, I can confirm that that we have all the reserves in our books related to the clawback clause that was imposed. I think in both cases the situation is in good shape. I hope I answered your question with that summary. Could you quantify those reserves? Is it in the JPY couple 100 million range, or is it JPY 1 billion? It, I mean, the reserve, I mean, I don't wanna speak by the finance department, but it's on the few millions of EUR. Okay. Thank you. This is Takeda speaking. As Nacho mentioned, the amount is not that material to our company. I would like from finance perspective that new regulation in EU and in India activities are already taking place, and finance does understand that. In other words, we are making investment from our side as well. I hope that answers your question. Thank you very much. One question. Yes, as I explained, EVIS X1 launch in U.S. is going to be pushed back further. You said to meet all the regulatory requirements. What do you mean by that? This was sort of a last-minute decision to postpone. What is the backdrop of that? Thank you for your question. Either of you can... Maybe the first one, Pierre... Chikashi, can you repeat? I couldn't hear you. No, just, you know, first question is about the what the all requirement, regulatory requirement means, you know, to make us launch in the United States, EVIS X1. You know, my, I just was asking is, you know, if either of you can answer to the questions. I can take a first shot. Pierre wants to comment additionally, he can do it. The current situation and the current thought on the approval in the EVIS X1 is that we are working with the FDA to submit all the necessary documentation, and we expect that the approval, the FDA regulatory approval, the 510(k) approval for the platform, we are expecting, and obviously this never can be confirmed 100%, but we are expected to have it around DDW. This is our current thought. After that, we will be able to initiate the promotional activity in the United States, but we still would require a few months in order to prepare all design validation and product validation, which is required in ISO. With altogether, we believe that around the middle of fiscal year 2024, we will be able to make a complete launch of the product in the market. The promotion activity is the time we can speak with customers about EVIS X1. We are hoping and expecting that will be right after DDW. I don't know if, Pierre, you want to add something or. I hope I did an accurate representation. I think you did really good, Nacho. When we go through and get a 510(k), a lot of times we have to work with the regulatory agencies, in this case, the FDA, and understand what they're approving. If there's a change in labeling or there's change in anything on the product, we have to make sure that we have the processes validated and gone through all the factories, make sure everything is ready for mass production. It will take a little bit after the approval of the 510(k). Thank you. I am aware of the screening process by FDA. What specifically were the issues that prohibited the launch as originally scheduled? Why is it that you are finding that out right now? A follow-up question, if this is going to be in the middle of FY 2024, I understand that in the U.S., many of the business is on the lease basis. I'm afraid the EVIS X1 profit contribution for FY 2024 is going to be limited. That is, as far as the U.S. is concerned. Can you talk about that? Thank you. Regarding your first point, I think Nacho partly referred to that, but let me repeat. The follow-up question. Okay. I think you have answered some of the questions already. I think, I mean, I think I can comment on the business impact of the EVIS X1 launch. As you, the question you referred very well, the nature of the US business is mostly related to leasing, which means that essentially, every time we launch a new platform is a smooth transition because those lease contracts are still in place until they have to be renewed. This is where we normally do the technology update. Meaning that in any given year when we launch a new platform, it's a smooth ramp-up of the penetration of the EVIS X1 platform. I think that the current situation in the launching of the product, of the platform, is not gonna impact our business results or our business expectations for fiscal year 2024. In any case, we were expecting a smooth move between the current and existing platform. We know it's gonna take always a few years to penetrate the existing 190 series platform that there is in market. It's not like a spike in the first months of the launch. It never happened because precisely of the lease characteristic of the business. I think the current situation is not gonna impact our business plan for fiscal year 2024. I think that's the most important message. As to why is further delay, I think probably Pierre is better to comment than me. I think that from one side, obviously we need to fulfill the obligation of 510(k). From the other side, we need to make sure that the product validation and design validations that happen in the factories are accordingly with what the FDA is expecting as well from us. This is where we will take a little bit more of time after even after the 510(k) approval will be awarded. That's the current situation. Pierre, you. Yes. Add something? Please. As we were going through putting the product on the market and trying to get approval, there was negotiations with the FDA on how certain things should be tested. If I remember correctly, with the FDA on the EVIS X1, we came through and we debated on how to test certain modules. We finally came to an agreement, and we're working full force now on our agreements that we've had. We've gone back and forth with negotiating the best way to prove the devices. We've finally gotten to that point with the FDA where we have full understanding of what they're looking for and we're gonna be able to meet it. My belief is that the slowdown in between was us trying to figure out exactly how do we best provide this, and the FDA is working very closely with us on this. So. That would be our response to your follow-up question. Was that helpful? Yes. Thank you. Thank you very much. I have a question about China. In the beginning of this fiscal year, China ESD sales plan, you presented a certain number. In the first half, you basically maintained the full year guidance. Lockdown impact was present in the first half, but still, you expected that there would be large enough pent-up demand, and that is why you maintained the full year forecast for China. In the third quarter, I think you're actually seeing pent-up demand translating into strong sales. There was something unexpected as well. Low interest loan program by Chinese government. This was not expected in the first half. This is a new factor. For the full year sales revenue in China, do you think there's going to be a big enough impact from this loan program that would affect and change the forecast that you gave us in May? I will try to answer first, and then, Nacho, you can give us some additional comments later. About three months ago, this new policy was introduced. It would have a positive impact on our business. That's what we said three months ago. In fact, in the third quarter, we have not received a big number reported, but low interest program actually generated some benefit up until December and also in the fourth quarter. The application is closing end of December, and the actual usage will continue until March. The fund that is obtained through this loan program will be used. That is a potential positive factor that we're looking at. However, when it comes to the Q4 outlook or the full year forecast, we do not believe that it would have a material impact. That is our view. For ESD, anyway, the initial forecast is still maintained. Demand is expected to increase during the second half, that is what is happening, in fact, and we believe that momentum will continue into the fourth quarter. That is our story. Nacho. Of course, you have something more than- Yeah. Thank you, Takeuchi, and just to complement the situation in China during this year has been a little bit complex from the very beginning. The first 2 months of the year were completely lost due to the COVID lockdown. The business recover. The government announced this low interest loans, and that this was a boost for the orders. At the same time in Q3, we have again COVID spikes in China that provoke again some complicated situation from the supply chain China. I think it has been a complicated year with minus and pluses, and I think altogether we have been managing the situation pretty well. Despite almost two months of no sales in China, we're gonna end the year with a growth and about 4%-5% growth in our ESD business based on the solidness of our GI business, which I think given the circumstances and given all the situations, it's actually a pretty good result. This has been impacted by the loans, of course, the low interest loans as well. This is the tailwind, there has been some headwinds in other areas. At TSD, situation is a little bit more complicated because again, it's procedure-based business and many procedures were canceled in China that has not been able to recover at the end. I think that, as, I think the situation in China is always fluid and flexible and, I think that, we're expecting to continue, our plans in Q4 and even the, officially the low interest program, has been canceled at the end of the year. I know that, many of the orders that, were placed in the system before still will be delivered in Q4. We still expect to have a good Q4 in China in the absence of any other external factor like COVID or any other thing that can impact again the supply chain. Thank you very much. Thank you. A follow-up question. Question about TSD. Endoscopy, procedure count, surgery count, I understand the volume went down in the third quarter. What about January and February? Do you have the latest information? Well, your question is about China? Yes, that's correct. Up until December, as I have explained, and as was explained, number of procedures has been or had been struggling. It was not recovering very fast up until December. Since January, the number of procedures is expected to increase. Well, that was our expectation. I think I have to ask Nacho to respond to your question because you're talking about the actual numbers on the ground. Nacho? Could you- I don't have the specific numbers of the procedure recovery in the Q4 versus Q3. What I can say is that January, February is always the months where the New Year in China happens. There is traditional a significant slowdown of the operation in that time. When from one side, we think that there is no reason that procedures will not resume as normal in this quarter. It's also impacted by the New Year celebration in China, which has slowed down the activity at the hospitals as well. I would say we expect a normal Q4, including the New Year. That means that on the TSD side, we should expect a normal year in terms of procedure development and so on. Thank you. That's all for me. I have a question on China. Buy China policy. Has there been any change to Buy China policy? I know that those Chinese manufacturers are not a competitor for Olympus, but going forward, I think the Chinese government is going to be very flexible in its policies. In terms of your production capacity and global supply chain, are you planning to start the local production in China? Thank you for that question. I would like to comment on the measures that we can take. China is a important market for us today, and it will continue to be important for us going forward. We like to contribute to the health of the Chinese people through our products and services, and there are many opportunities as well. That view remains unchanged, of course. The Buy China policy, how are we to address that? There are many possibilities. Right now, all I can say now is that we are considering various possible measures that we can take. That will be my response to your second question. Your first question, again, I would like to refer that to Nacho again. Please. Yeah. Thank you. Thank you. Thank you again. As usual, I see a strong interest in China. Luckily, our represent continue being solid there. I would echo Takesha's comments that we are exploring any necessary activity that will allow us to keep our current level of competitiveness in China. Having said that, it's also true that our technology differentiation, mostly on the GI platform, is still very significant. There is no. Specifically on the SD side, on GI, there is no local competitor that in China that we see that despite any Buy China policy, is actually getting our market share. I think that we are maintaining our market share despite any policy from the government. Our intention in China and honestly speaking, I think that with Buy China policy or without Buy China policy, our strategy is always the same, right? We have to provide the best possible product with the best possible service, with the best possible education, with the best possible servicing in the market. This is what has been our growth engine in China in many years. We plan to continue that. We are considering all options and if at some point we would feel that China manufacturing would be necessary to be able to do the strategy, it would be clearly considered. I think at this point, we are in a good competitive situation in China, and, we will, I think you guys, as I mentioned, we will continue doing all the scenarios and all the considerations to keep that competitive position there. Thank you. Thank you. That's all for me. I'm looking at page 5 of the earnings material about ESD China. Third quarter grew 57%. Excluding the FX, it still grew by 38%. I understand that there were inventory issues and COVID issues as well. What was the actual growth? Apple to apple growth. In other words, this looks really dramatic growth. Is this due to one-off factors? If all the one-off factors were excluded, what would be the actual growth? Thank you for your question. It is. Well, I don't have any specific numbers on hand about the baseline. Last year in the third quarter, this is year-on-year, so I'm comparing it against the previous quarter, third quarter. Second quarter of the previous year, actually, there was a bit of a shift from third quarter to second quarter. The second quarter number was higher, and the third quarter number was lower than expected. We are basically comparing it against that baseline, and that's where the 38% came from. How much do we add back to the last year to create the appropriate baseline? I'm sorry, I don't have the specific numbers in front of me, but that is what happened. If I was to add something, the question is about Q4. We do not expect 38% growth, for example. Not, it will not. Oh, that's very clear. Thank you. A follow-up question. I don't know if I should ask this to you, but whether it's ESD, I know that you're seeing a lot of recovery because of many different factors. If you look at other medical device companies, their performance are suffering due to COVID-19, Buy China and tender. You are making recoveries. Is this specific to your products? Is it the product spec-specificity or is it related to inventory? Maybe the inventory dropped too much last year and this is a rebound. How do you assess the situation? Yes, I will try to answer your question. I am not really in a position to be able to say anything about other companies. We don't have sufficient information to do so. As far as Olympus is concerned, there is a clear trend that ESD is strong and TSD is not recovering as much as ESD. That is the situation. ESD product power strength, and not only the strength of products, but also strength of services and training, the whole platform, through long history has been established in China. I would say that that may be the difference between us and the other companies that you have been hearing the stories from. Nacho? Add something to this question. Yeah. I think that in China, but in general, right? I think the reality of the TSD business, as has been explained many times, is procedure-based, and so we are more exposed. As many of our competitors in the same space are, we're very exposed about changes in the procedure side, right? This year we had a lot of disruptions in China, but also disruptions in Japan and in other places that impact the number of procedures that are being performed, and that obviously impacts our revenue until those procedures have recovered. Plus, on top of that, we had some delays in the supply chain that provoked that we couldn't fulfill that demand. The... In any case, I think that what we have to understand as well is that what is our competitive situation in TSD. I think we are making advances that that will return in positive growth later. For example, in our stone management business, we have been placed in tons of instruments and sell in terms of, so tons of capital instruments, gaining market share in the space that obviously once those procedures are fully recovered, are gonna bring a lot of devices business for those for those business. I think that when we look at our TSD business in this year, we know what has been the headwinds factors that has impacted the limited growth. We know as well that in several areas we are gaining market share. Our urology position is very solid, and we are gaining market share. In EndoTherapy, we are making good strides and increasing our footprint geographically and even in the United States, growing or above what the market is doing. I think that there is a lot of indications that tell us and give us confidence that the TSD business is gonna continue growing at a higher pace in the future, despite that maybe this year, again, for the headwinds that has been explained, we couldn't grow at that level. Our expectations continue being very strong for the TSD business, and we believe that those product categories will do very well. I know it's a broad answer, but just trying to characterize a little bit what's our TSD business about. Thank you, Nacho. That's it for answers. That's very clear. Thank you very much. One question. Related to economic situation. After COVID, especially in the US, for the last two years, I think we have seen a rather good recovery. Going forward, the question is what's gonna happen. The recovery that we have seen, may be followed by a decline. Well, in your case, you have new product launches, so it might be different. Overall, looking at calendar year 2023 or your fiscal 2024, what is your projection in terms of the economic situation? Thank you. I'm wondering from what perspective I should answer your question. The economic situation. Healthcare overall is less affected by the economic situation. I think that is a common understanding. Having said that, we do live in the economic world, so in many aspects we have to pay attention and be careful. Of course, budgets at hospitals and of course, related to the interest rate. Even 61 discussion we talked about the lease arrangements and lease would be affected by the interest rate. That's one thing that we have to pay attention to, and also the cost aspect. In the inflationary trend should it continue, cost will go up. How do we address that is a big question. Looking at the macroscopic economic situation, as I stated earlier, healthcare tended to be less affected, so maybe our sensitivity has been less compared to other industries. When we look at the recent trends and when we project into the future, I think we have to take into consideration the factors which we have not taken into consideration in the past. I will be more cautious in that respect. If that answers your question. Yes. Thank you.