We will now begin with KT&G's presentation. Ladies and gentlemen, I'm Kate Park, Head of Investor Relations at KT&G. Thank you for attending KT&G's 2024 first quarter earnings report. Please allow me to first introduce the KT&G management team in attendance today. With us today we have Mr. Sang-Hak Lee, Chief Finance Officer, Mr. Min-seok Kwon, Managing Director of Global Headquarters, Mr. Wang Seop Lim, Chief of NGP, Mr. Yong-chan Yoon, Chief of Marketing, Mr. Dong-Jae Lee, Head of Strategy and Planning Office, Mr. Yong-Beom Kim, Head of Finance, Mr. Oh-seon Kwon, Head of Real Estate Development Office, and Mr. Dong Chang, Chief of Strategy at KGC. I must advise you that the earnings we are about to present today have yet to be audited by the outside auditor, therefore are subject to change in the audit process, and any forward-looking information discussed in the call today may differ from the actual results to be reported in the future. Before we go into the 2024 first quarter results, Mr. Sang-Hak Lee, the CFO, will share with you key management initiatives that we have been taking since the appointment of the new CEO and the launch of the leadership team at the end of March. Ladies and gentlemen, I'm Sang-Hak Lee, CFO at KT&G. At the AGM last March, our shareholders have approved a new CEO and the BOD. With newly launched leadership, KT&G is now on a challenging journey to take the leap towards a global top-tier corporation. In the past 40 days, we have enforced structural innovation to enable dramatic growth of the three core growth businesses that are NGP, Global CC, and health-functional food. First, we innovated the organizational structure to reinforce responsible management that will support earnings performance. We introduced a CIC and manufacturing hub system for global regions to promote rapid growth in APAC and Eurasia regions. CIC presidents and key leaders at the company have been assigned to the front lines of our global markets with a motivational-centered organization. As for the company headquarters, we newly launched the strategy, marketing, and manufacturing divisions to establish a responsible management system surrounding the division chiefs that allows for better autonomy and speed. We also restructured and streamlined our organization to enhance efficiency in the execution. Along with such innovations to the organizational structure, we are trying to innovate the business management structure as well to strengthen management efficiency and profitability. The main pillar of this would have to be improving ROE, for which we have a company-wide project up and running. We defined 10 goals for the different divisions centering around profitability, efficiency, and stability, and based on that, we will be executing detailed tasks for each division for profitability enhancement, asset efficiency, and capital policy sophistication. With such structural reforms as the foundation, KT&G expects to create full value from the second half of the year, starting a turnaround in our earnings. We will duly execute the 24-26-mid- to long-term shareholder return plan at top level domestically and globally, as we announced previously, to actively participate in the government's Value-up Program. In line with this, we have canceled 2.6% of total outstanding shares from our treasury shares back in February. In the second half, we plan to repurchase approximately KRW 350 billion worth of shares to be immediately canceled after, and we will be paying out our interim and year-end dividends based on our policy of constantly rising DPS, as communicated. Respected shareholders and investors, KT&G's new management and board is faced with unprecedented headwinds internally and externally. We will enforce our mid to long-term growth strategy and short-term profit enhancement in parallel with a meticulous capital allocation policy. We will use the earnings generated as budget for stronger shareholder returns to create a virtuous cycle as we maximize corporate and shareholder value. I ask for your support for the company going forward. Thank you. Now we will present to you KT&G's 2024 first quarter results. We will begin with the key items from our consolidated results and then move on to each business segment, starting with the key takeaways from our Q1 results. As Mr. Lee just explained, we have new leadership under CEO Kyung-Man Bang, who was appointed in the end of March, and 40 days had passed since. In the first half, initiatives for mid to long-term performance and fundamentals improvement are underway, and we expect to see value creation and earnings turnaround in the second half. As for the first quarter, NGP sticks, the core growth driver of the business, recorded a growth trifecta of volume, revenue, and operating profit. Sticks volumes grew by 9.9%, revenue 6.3%, and operating profit 5.8% year-over-year. Especially global NGP sticks grew 14.7% in volume, 19.2% in operating profit, to drive the profitability enhancement of the business. The global CC business revenue grew 10.1% YOY, benefiting from pricing in major regions. In particular, Indonesia and Russia, our key subsidiaries, recorded triple growth in volume, revenue, and adjusted operating profits. However, the company's consolidated revenue and operating profit for the quarter was sluggish compared to the previous year. The real estate and HFF businesses have been under pressure and contracted cigarette market volumes, higher cost of manufacturing per pack due to inflation, one-off increase in bad debt allowances in the tobacco business were major contributing factors. While we expect impact from the completion of real estate development projects and cost headwinds to persist in the second quarter, we will be focusing on improving earnings through accelerating the growth of NGP Sticks and global cigarettes and revitalizing HFF revenues. Moving on to consolidated results for the first quarter. Q1 consolidated revenue was impacted by slow HFF and real estate businesses suffering a 7.4% YOY decline to KRW 1.2923 trillion. Q1 consolidated operating profits were impacted by reduced revenue from HFF and real estate, as well as suppressed profits from the cigarette business domestically and globally, down by 25.2% at KRW 236.6 billion. Our net income was supported by higher currency-related earnings coming from the FX fluctuation in the quarter and lower levels of corporate tax, rising by 4.2% YOY to KRW 285.6 billion. Our EPS was up 6.5% year-over-year at KRW 2,478. EBITDA was down 20.8% to KRW 297.4 billion, with EBITDA margin at 23%. Let's look into the reasons behind the movement in consolidated earnings. In the tobacco business, improved product mix and pricing was an upside by KRW 32.8 billion, as well as the currency effect of KRW 11.4 billion due to a stronger dollar against the won. But in cigarettes, reduced overall volumes were a KRW 20.4 billion downside and a KRW 53.8 billion impact from inflation-induced higher manufacturing cost per pack and temporary cost increase, including bad debt allowances. On top of this, reduced revenues from HFF led to a KRW 32 billion drop in profits, an unfavorable comparison against the completion of the large development projects in real estate, and led to a KRW 21.6 billion drop YOY. Such factors combined, our operating profits for this quarter were down by 25.2% year-over-year. Next, I would like to move on to earnings per business segment. Starting with the tobacco business. In Q1, our tobacco business saw higher revenues from global cigarettes and global NGP sticks, but reduced revenue from domestic cigarettes and global NGP devices led to a 0.1% decline in revenue to KRW 856.6 billion. Q1 operating profits were affected by higher material costs, including leaf, and a temporary increase in bad debt allowances for global cigarettes, down by 12.7% year-over-year to KRW 206.6 billion. As for share of global sales in tobacco, continued strong growth in NGP stick volumes was balanced by reduced export to certain regions, including APAC and Africa, remaining flat versus previous year at 58.3%. Let's go into each segment within the tobacco business. First, on domestic cigarettes. Our Q1 cigarette volumes, impacted by a market that is contracting by 3.5%, were 9.18 billion sticks, 3.1% lower year-over-year. Amid stronger competition with aggressive new product launches from competitors, we launched new products catering to consumer needs, improving our share of market by 0.3 percentage points to 66%. In Q1 domestic cigarette revenue, sales from duty-free or high ASP channels increased by 29.3%, but a decline in total sales volume led to a 1.7% decrease in revenue at KRW 382.9 billion. Next is on global cigarettes. Q1 global cigarette revenue benefited from pricing in key regions, up by 10.1% year-over-year to KRW 291.8 billion. While volumes for global subsidiaries were slightly down due to the change in revenue recognition to OEM for Turkey, pricing in key regions like Indonesia and Russia, CIS drove a 14.4% increase in revenue. For export, unstable currency in major African markets and inventory adjustment in APAC applied downward pressure, which was more than offset by increased export volumes and price increase in the Middle East, leading to a 6% increase in export value. When it comes to volumes for global cigarettes, despite growth in major subsidiaries like Indonesia and Russia and higher export volume to the Middle East, lower volumes for new markets, including Africa and Latin America, as well as for export to APAC, led to a 4.9% decline to 12.71 billion sticks. Next is on NGP. For domestic NGP revenue for the quarter, new product launches and aggressive price promotions from competitors aggravated the competition landscape, which was more than offset by an expanding NGP market and our new product launches leading to higher sales, amounting to a 1.7% increase to KRW 130.1 billion. In global NGP revenue, devices with high unit ASP suffered in sales volume due to inventory adjustment, leading to an 11.7% decrease in overall revenue to KRW 176.3 billion. Despite a lower device export volume, domestic and overseas sticks, the core growth driver, achieved a growth trifecta of volume, revenue, and operating profit. Total sticks volumes were 3.54 billion sticks, a 9.9% increase YOY, and revenue grew by 6.3% and profits by 5.8%. Looking at the details of the NGP business. In Korea, with a higher influx of consumers to the category and a variety of new product launches supported NGP penetration, which grew by 2.1 percentage points to 21.4%. Domestic sticks market share was impacted by aggressive promotions from global peers and intensifying competition throughout the year 2023, but the national launch of lil Hybrid 3.0 and new sticks product launches started to show effect in the quarter, allowing for the market share to rebound to 45.7%. In the global business, higher penetration into launched markets continuously supported sticks volume growth, which in turn led to improved profitability. Next is on health-functional food. In Q1 HFF revenue, subdued purchasing in Korea and strategic downsizing of low-profit channels led to a drop in revenue by 19.7% to KRW 308.4 billion, while Q1 HFF operating profit grew by 101.8% quarter-on-quarter because slow sales in high-profit standalone stores, higher revenue share of high-cost products, and increase in marketing investments domestically and globally led to a 58.2% on a YOY basis to KRW 23 billion. Q1 share of global operations grew by 4.5 percentage points to 21.1%, with stronger international sales. Breaking down HFF into domestic and global. Looking at the breakdown of domestic revenue by channel, duty-free among high-profit channels grew by 25%, while standalone stores and channel stores, including department stores and supermarkets, suffered a decline in revenue. Strategic downsizing of the low-profit teleshopping channel added to the pressure, driving down domestic revenue by 24% YOY to KRW 243.3 billion. For Q1 global business, despite subdued market sentiment in China, the Everytime and Hongsamwon products kept revenue levels flat, whereas in the U.S., recovery in offline channels like standalone stores and supermarkets led to a 25.4% revenue growth. All this combined, total global revenue grew by 1.9% to KRW 65.1 billion. Lastly, on real estate. In real estate revenue for the quarter, while higher revenue is recognized from ongoing development projects, including East Daejeon and Mia, the unfavorable comparison against the Suwon Development and Gwacheon PFV subsidiary due to their completion led to a 46.2% decrease to KRW 45.2 billion. Q1 operating profits recovered as new development projects bounced back to profits, but were down 89.3% YOY to KRW 2.6 billion with comparison against Suwon and Gwacheon Development projects. This concludes our presentation on KT&G Q1 earnings report. We are now happy to take your questions. [Foreign language] Now, Q&A session will begin. Please press star one, that is star and one if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. [Foreign language]. The first question will be provided by Jung-wook Kim from Meritz Securities. Please go ahead with your question. [Foreign language] Thank you for taking my question. I have four questions. First question relates to your cost base. We see that there is an elevated level of cost burden, which started from last year, especially with regards to the tobacco leaf. If you were to be able to carve out that impact for Q1, what would the figure look like? And also, if you could share with us what the outlook is for the second quarter as well as second half of the year, that would be greatly appreciated. Second question, I understand that you have conducted restructuring for your HFF business. I'd like to know, and also, there's been quite a marketing spend, and the performance has been quite slow. As we go into the second quarter of the year, since there is the month of family and also change in the modeling, is there a possibility that we will start to see some improvement from your HFF business? Another question, and also, if you could share with us what your outlook is for Q2 and the second half of the year. Third question relates to the FX impact that you've seen for the first quarter. Also, if you could guide as to what the guidance would look like for the second quarter, that would also be quite helpful. Lastly, aside from your existing shareholder return policy, what are your plans in regards to the current government Value-Up Program? [Foreign language] So, I am Kim Yong Beom. I'm the head of finance. I will respond to your question regarding the cost pressures. Globally, due to the inflation we are experiencing, there has been an increase in the pricing of tobacco leaf, and that has started from year 2022. So, on a year-over-year basis, the key ingredient, which is the tobacco leaf, the price had gone up by about 5.8%. Now, having said that, although there have been some increases in the cost base, we see that in regards to those other ingredients, the speed at which the cost is increasing has somewhat softened. So, we believe that as in year 2023, we will start to see some stabilization in the prices of certain ingredients and the materials that are used for making tobacco. So, from a long-term perspective, we believe that in terms of the speed at which it is going up, that the speed will start to slow. In order to mitigate any cost-related burden, we are focused on cost savings, looking for any replacement for the tobacco leaf, and also improving our manufacturing process efficiency, and also focusing on expanding the high-margin product. These are some of the approaches that we are taking to deal with the elevated cost base. [Foreign language] Regarding the second question on the FX impact, if you compare the FX rate as of Q1 of 2024 to the FX rate at the end of 2023, there's been an increase of 57.4 won, and on a year-over-year basis, there's been an increase of the FX rate of 21 Korean won. If you look at the dollar impact, the FX rate impact of 10 won change is going to have an impact of KRW 5.2 billion on the operating profit of KT&G. So, if you were to multiply 21 won to that basis, you'll see that the OP impact will translate to KRW 11.4 billion. On the non-OP side, the impact was KRW 44 billion. [Foreign language] In the second quarter, as to how the FX rate is going to play out, it's quite difficult for us to make that assumption because there are a lot of uncertain factors that are at play. But in order for us to mitigate the fluctuations and volatilities in the FX-related P&L of the company, we are using FX-forward products, and also we are timing and controlling and managing the inflow and outflow of FX-denominated funds in order for us to hedge against the risk. [Foreign language] Yes, I am Chang Dong. I'm Chief of Strategy at KGC. I will respond to your question about our HFF business and the outlook for the second quarter. If I were to share with you what we're projecting, first for the domestic market, we are using a very famous celebrity in Korea, Lim Young-Woong. We're using him as a spokesperson and model for our product, and he wields a very high level of awareness. We are looking forward to the record high sales in the month of family, which is May. For the Chinese market, we will actively use different promotional events during the June 18th major event in China to push for the sales of our product. Also in the US market, we are in the process of realigning and reorganizing our group to establish ourselves as a flagship dietary supplement company. We will also speed up penetration through the mainstream channel for HFF in the United States. If we are able to continue on with these types of strategies, we believe that we will be able to further drive up year-over-year revenue growth. [Foreign language] Yes, I am Lee Dong-jae. I am the head of strategy and planning. Responding to your question about the government's value-up program, even ahead of government's announcement of such a program, at KT&G, we had voluntarily announced our extensive 2024-2026 mid to long-term shareholder return policy back in November of 2023. In line with the plan that we have announced, we have already canceled our treasury shares in the amount of 2.6% out of the total outstanding shares. We are committed to complying with our shareholder and return plan, which we have announced, and we will continue to return back to the market at a very top-notch level. [Foreign language]. The following question will be presented by Sung-Jin Park from Kiwoom Securities. Please go ahead with your question. [Foreign language] Thank you for taking my question. I'm Park Sung-Jin from KIWOOM Securities. I have some questions relating to your tobacco business. Would like to understand what are some of the positive and negative drivers that impact your bottom line. If you look at your cigarette business, the cost variance accounts for, I think, about KRW 53.8 billion. In light of what you have explained in terms of the increase in the cost base for the tobacco leaf, as well as the stabilization of the prices of the other secondary ingredients that are used, I would like to understand as to what are some of the other factors that are impacting this cost variance. Also global business-wise, you've been increasing your pricing. Are there any additional plans for you to increase the pricing in the second quarter? If so, could you share that with us? Second question has to do with your HFF business. Since the successful launch of Everytime, I think that during the month of major holidays and vacation, major holiday season, I think it's the first that we are seeing a revenue level at around KRW 200 billion. So aside from the economic slump or the economic cycle that we are at, what are some of the other factors that are having this downward pressure, and what will be your product strategy to respond to this trend? Third question is on your non-operating account. Aside from the FX impact on a consolidated, if you look at the consolidated P&L statement, you see that under the others, there's also KRW 102.5, and we see quite a bit of difference between the pre-tax figure as well. So what are some of the other factors that are impacting your non-OP account? [Foreign language] This is Kim Yong Beom, head of finance. I will respond to your question about the cost. Your question was that in the CC business, aside from the pricing of the tobacco leaf, what are some of the other factors that drove this cost of sales? If you look at Q1 G&A figure, there has been an increase on bad debt expense in the amount of about KRW 10 billion. And if you look at early last year, there was a bit of a write-back or reversal from the bad debt provisioning in Russia. But since then, there's been an increase in volume as well as the increase in volume, which led to increases in receivables, and hence we had to provision more for bad debt expense. And also there's an increase in labor costs in the amount of about KRW 7 billion. This is attributable to the fact that we were expanding our business in both Indonesia and Russia, which drove up hiring. [Foreign language] Regarding the second question on the breakdown of the non-operating account, based upon the current accounting standards, there is other income and financial income. For the others account, the big impact or the variance is due to the FX-related impact. On the financial income, there was about an increase of about KRW 10 billion. Typically, on a quarterly basis, that amount would be higher than the KRW 10 billion that we have reported for this quarter. The reason is because in the first quarter of 2023, if you look at the fair valuation measured at, or the profit measured based on fair valuation of the financial assets was around KRW 10 billion. Because of the interest rate stabilization that we saw in Q1 of previous year, at the end of the year, there was a reversal or write-back, which amounted to about KRW 20 billion. That created the base effect. That's why for this quarter, it looks as if our increase in the financial income was less. [Foreign language] Hello, I am Kwon Min-seok. I am MD of Global Headquarters. Responding to your question about the pricings or the ASP increases from our global business, currently we are going as planned in accordance with the plan that we have for each of the markets and for each of the brands. So we are carrying out the plan that we have put in place. Going forward for our global CC business, we will fully consider the increases in the supply pricing for export as well as increase in local retail pricing and also carry out changes in the mix. According to that, we will continuously improve on the ASP going forward. [Foreign language] Yes, I am Chang Dong from strategy at KGC. Responding to your question about HFF and the downward pressures that we are seeing on top line revenue, including for Everytime and also the product strategy, I will talk about them one by one. In terms of revenue, we've seen growth in revenue from DFS channel and online sales channel. But because of higher inflation and people's propensity to spend has come under some pressure from the roadshops, the revenue had started to decline. And also we have intentionally, based upon our strategy, to reduce the exposure that we have through the teleshopping channel and also to shy away from massive sales through the department channel, which drove domestic sales down. In terms of the product strategy that we've put in place, we are going to highlight and focus on premium products, high value added, and premium products in different product segments that HFF or KGC currently handles. Also we will better respond to the needs of our consumer base through the products of Hwa Ae Rak as well as other red ginseng, gummies, and products that will help children with their development so that we are able to improve on the profitability of these products. [Foreign language] The following question will be presented by Hyeeun Kim from Morgan Stanley. Please go ahead with your question. [Foreign language] Thank you. I have questions relating to your NGP next generation product. I see that with the release of Hybrid 3.0 in the domestic market, the market share started increasing. Any new pipeline that you are planning for this year? And also globally, in Q1, it doesn't seem like you've entered into any new markets, or do you have plans to do so going forward? And for the NGP, any additional new platforms or additional products that you are currently planning for? [Foreign language] I am I'm Wang Seop, Chief of NGP. Responding to your question regarding the rebound that we've seen in the domestic market share and some new pipelines and new platforms that we are envisioning. Yes, there are preparations that are underway and you can expect to see soon the market releases of these new upcoming pipelines. So compared to our peers, we believe that we have strength and innovative ideas and also speed at which we go through the development. So I believe that we are well equipped with competitive edge and you will be able to see for yourselves what that entails in a very near future. Regarding new markets that we've entered into, in the first quarter we launched into the Estonian market that makes a total of 32 countries that we are currently selling our products. Regarding the new platforms that are upcoming, although I cannot share with you more detailed or specifics regarding the upcoming platforms, I can tell you that there will soon be a press release and we will be able to share with you more details. So aside from the solid platform, there will be additional platforms that we will utilize and enter into several number of countries, especially for Russia, which is showing a quite high growth rate. Other than the existing model, there will be an upgraded model that will be used for that market, which I believe at the end of the day will help us further drive growth in our sticks business. [Foreign language] The following question will be presented by Young-hoon Joo from NH Investment & Securities. Please go ahead with your question. [Foreign language] Thank you. I am Joo Young-hoon from NH Investment & Securities. Just have two very simple questions. First one is we see that the penetration for domestic NGP has gone up quite extensively, but how far do you think that penetration can go up? So if you could provide some color as to the overall market outlook, that would be helpful. Second question has to do with your interim dividend payout. Regarding the split between the first half and the second half, do you have any specific plans? If so, could you share how it's going to split in terms of your interim dividend? [Foreign language] This is Im Wang Seop again, Chief of NGP. Regarding the market penetration, I've been very closely monitoring the market for the past 3-5 years. On an end user basis at the CVS channel basis, we've been seeing about 1.8% or early 2% growth. Right now the penetration stands at about 21.4%. If you think of CAGR growth of 2% on a year-on-year basis, I think that at the end of the day we will actually follow the route that Japan is going because Japan is about 2-3 years ahead of us. Eventually then we will reach around 40% level or 50% level. I think it's just a matter of timing. It's just a problem of timing as to when we will reach that point in time. Regarding the increases in penetration, it's not really the market itself that drives that increase. It's actually dependent on the innovation and innovative platform that the manufacturers actually have. So that is a key driver behind this increase in penetration. So it's our peers as well as KT&G. To what extent we focus on innovative drive, I think, is the key determining factor. So depending on how these different players actually act and engage with the market, I think we will be able to see a continuous increase in penetration. [Foreign language] Yes, I am Lee Dong-jae, Head of Strategy and Planning. Regarding how we split the interim dividend payout across first half and second half of the year, nothing yet has been decided. It will be determined at the BOD level after they take a look at our earnings performance as well as the liquidity that the company has. Thank you. [Foreign language] Well, this brings us to the end of the first quarter earnings conference call of KT&G. If you have any unanswered questions, please feel free to contact us at the IR team. Once again, thank you very much for joining us this afternoon.