Itochu Stock

Thank you for joining us today. This is Harada, Director of IR Division. Today, we would like to explain our strategic alliance with the Dentsu Group. First of all, let me introduce speakers. Senior Managing Executive Officer, President, ICT and Financial Business Company and Deputy COO, Shunsuke Noda; Managing Executive Officer, President, the 8th Company, Kensuke Hosomi; Member of the Board, Senior Executive Officer, CFO and CXO, Hiroyuki Naka. Please start explanation from Mr. Hosomi.

Thank you very much for joining us today. I am Hosomi from the 8th Company. Today, I would like to explain our strategic alliance with the Dentsu Group. I will explain how we view the retail media and data area, why we see significant potential in this area and what we aim to achieve by combining our strengths with the expertise of the Dentsu Group, focusing on these key points. Noda will later explain the specific areas of collaboration and expected synergies in the IT services domain.

This project is an extremely important step for the ITOCHU Group as we work to expand our medium- to long-term earnings base. For the 8th Company in particular, we see it as an initiative that will take the business foundation we have built, centered on consumer touchpoints, purchase data and in-store media, mainly through FamilyMart, to the next stage of growth in a transformative way

Let me first explain once again what retail media is. At the top of the page, you can see our store network. FamilyMart has approximately 16,000 stores nationwide and receives around 15 million customer visits per day. Famima Digital One operates the FamiPay app, which includes payment functionality and has now reached 30 million downloads. In other words, this means we hold 30 million advertising IDs. Using this member information, Data One, shown on the left-hand side, delivers advertisements through third-party media such as social media. In addition to the 30 million FamiPay IDs, through partnerships with NTT DOCOMO and other retailers, we currently hold approximately 60 million advertising IDs. We are developing our digital advertising business while analyzing this purchase data.

On the right-hand side, Gate One operates a media business that delivers advertisements through the digital signage installed in FamilyMart stores. In other words, our owned media. By effectively utilizing the 60 million IDs we hold, we can deliver advertisements across both third-party media and owned media.

Then let me explain a simple question. Why retail media now? 6 years ago, when I was President of the 8th Company, I studied developments in the United States as a successful case. In the U.S., tighter privacy regulations made it extremely difficult to track individuals' online browsing histories and deliver advertisements through social media. As a result, the value of a business model based on analyzing retailers' actual purchase data and using it to deliver advertisements through apps and social media rose sharply. For example, rather than targeting people who simply searched online, advertisers can directly reach health-conscious consumers who actually purchase salad chicken and OIKOS every morning. That results in materially higher recognition rates. In other words, advertising value has shifted significantly toward clear, verified data based on actual purchasing behavior.

In the U.S., Walmart has entered the advertising business in earnest, leveraging the Walmart Connect app and in-store signage. Over the past 3 years, its annual advertising revenue has grown rapidly, from $3.4 billion in 2023 to $4.4 billion in 2024 and $6.4 billion in 2025. We believe this trend would also take hold in Japan, and the ITOCHU Group, including FamilyMart, has invested approximately JPY 50 billion in this area. Those investments have been made in payment apps, signage and data accumulation and analysis. As a result, business profit in this area expanded rapidly to JPY 5 billion in FY 2024. Through this alliance with Dentsu, we now see JPY 15 billion by FY 2030 as achievable.

Our target is companies' marketing budgets, not in-store promotional spending used to fund discounts. Industries with large advertising budgets, such as automobiles, financial services and food, are especially important targets for us. For example, in 2025, these 3 industries are expected to spend approximately JPY 410 billion on advertising, of which roughly JPY 340 billion is still allocated to TV or so-called old media. Through our alliance with Dentsu, which has strong relationships with advertisers, we believe there is a high probability of achieving our plan by redirecting a portion of those budgets toward retail media.

In fact, our initiatives have already attracted global attention. In 2025, we were invited by the National Retail Federation, or NRF, to deliver a keynote speech showcasing our initiative as one of Asia's first successful retail media cases. In other words, this initiative is not a business we are building from scratch. We are entering a phase where we will further accelerate a business that has already achieved solid profitability and a proven track record by leveraging our business alliance with the Dentsu Group.

The retail media business will have a major spillover effect on FamilyMart by transforming its store network into a giant media platform. There are 3 key points. First, we have daily consumption data on the scale of JPY 10 trillion, based on 60 million IDs. This captures approximately 1/3 of all purchase data in this sector in Japan. Second, convenience stores, CVS, in Japan play a unique role in supporting the retail price structure of the industry, especially for food manufacturers. Without convenience stores, Japan's consumer ecosystem would not function as it does today. In addition, the nationwide network of about 60,000 convenience stores serves as a substitute for various functions in shrinking regional areas. Today, convenience stores go beyond selling food and even offer cars.

Third, by turning the convenience store space into an IP platform, we can expect to further improve profitability. Even a small increase in the profit margin of the CVS business would have a significant impact. For example, a 1% increase in margin could result in JPY 30 billion in additional operating profit. This demonstrates the substantial growth potential in this area.

As I have explained, we have overwhelming consumer touchpoints centered on FamilyMart together with a vast volume of highly fresh purchase data accumulated through those touchpoints every day. This unique data, which we call Life-Live Data, is the source of a competitive advantage that other companies cannot replicate. However, no matter how strong the data or the platform may be, simply owning them does not create value. They must be developed into products that advertisers can use easily, proposed effectively and converted into recurring earnings. That is where the Dentsu Group's world-class network and expertise become indispensable.

The Dentsu Group brings strong relationships with advertisers as well as broad sales capabilities and deep expertise in integrated proposals, creative development and marketing. DENTSU SOKEN also has strong capabilities in AI, data analysis and system implementation. The ITOCHU Group's overwhelming consumer touchpoints and Life-Live Data can therefore be refined into high-value solutions for advertisers and translated into reliable earnings. That is the principal objective of this alliance with Dentsu. The 8th Company does not view the retail media and data business area as merely a peripheral business. We intend to develop it into a powerful new core business with the potential to demonstrate global competitiveness originating from Japan. This alliance with Dentsu is an extremely important strategic step that will enable us to achieve a transformative leap in our growth trajectory. That concludes my presentation.

I am Noda from ICT and Financial Business Company. In FY 2023, we privatized ITOCHU Techno-Solutions Corporation, CTC, a system integrator. Since the early days of the Internet, CTC has built network infrastructure for major telecommunication carriers. Its strong position in the industry, established through its advanced IT infrastructure capabilities, remains one of its core strengths today. In addition, we have been advancing a digital value chain strategy centered on CTC while building a digital value chain that enables us to serve customers' IT needs end-to-end from upstream consulting through downstream BPO.

DENTSU SOKEN was originally established as a joint venture between Dentsu and GE and has provided its services to customers in the manufacturing and financial sectors for many years. Leveraging the deep domain expertise it has built over time, DENTSU SOKEN has developed strong consulting capabilities for business functions, robust system development capabilities and proprietary software products with high market share. Although both CTC and DENTSU SOKEN are IT service providers, their businesses have evolved along different paths, resulting in limited overlap in their customer bases and service offerings. As a result, the 2 companies are highly complementary. By adding DENTSU SOKEN to ITOCHU Group's digital value chain and strengthening collaboration across the group, including CTC, we believe we can generate more than JPY 50 billion in additional annual revenue within 5 years.

Going forward, DENTSU SOKEN and CTC plan to establish a business alliance. As explained earlier, by leveraging the complementary strengths of the 2 companies, we intend to create business opportunities in 3 main areas. The first is cross-selling. We will cross-sell each company's strengths to the other company's customers, including CTC's IT infrastructure capabilities and DENTSU SOKEN's deep domain expertise. The second is joint product development and new technology domains. More specifically, we will combine the expertise of both companies in growth areas such as physical AI and cybersecurity. The third is closer collaboration in overseas markets. With a focus on ASEAN and North America, where both companies already have operations, we aim to further expand overseas revenue. To capture these synergies, we plan to put in place the necessary structures to support collaboration and personnel exchanges. By combining the strengths of both companies and delivering competitive one-stop solutions from upstream to downstream, we are confident that this alliance will lead to further business expansion for both companies.

Our overseas collaboration with DENTSU SOKEN will extend beyond CTC to include other businesses as well, particularly in ASEAN. CTC has operating bases in Singapore, Malaysia, Indonesia and Thailand. In addition, we also have multiple businesses operating across ASEAN, including the BELLSYSTEM24 Group in BPO, as well as cloud solution businesses. DENTSU SOKEN already has a presence in Thailand, Indonesia and Singapore. We intend to deepen collaboration in these markets while also discussing potential expansion into Vietnam and Malaysia, which are experiencing particularly strong market growth. By combining CTC's strengths and infrastructure with DENTSU SOKEN's capabilities in system development, we intend to further expand digital transformation support, particularly for the overseas subsidiaries of Japanese companies.

The next slide outlines the overall business portfolio of the ICT and Financial Business Company. In addition to the digital value chain, we will also pursue collaboration with DENTSU SOKEN across a broad range of areas, including retail finance and insurance, mobile device, satellite and IP content, and health care. For example, DENTSU SOKEN has particular strengths in system development for the financial and insurance sectors, and we believe there is significant potential to support the digital transformation and system development needs of our group companies and partner companies. We also see a range of other opportunities, including collaboration in communications areas, leveraging IP content as well as the use of satellite, geospatial and health care data. In addition, by leveraging the network of promising startups we have cultivated through our venture investments, we will pursue new business development in advanced technology fields, including AI.

Let me explain a bit more about our collaboration with promising startups. We have invested in top-tier overseas venture capital firms since the 1980s. As part of our business development efforts, we have introduced the products of promising startups backed by these venture capital firms to the Japanese market through CTC. As technological change has accelerated, particularly in areas such as AI, there has been a growing need for broader development resources and deeper domain expertise. Through this alliance, we believe we can now pursue new market development strategies by leveraging DENTSU SOKEN's system development capabilities and deep domain expertise.

As a result, we believe we can now engage with promising startups that have previously been difficult to collaborate with within our digital value chain. We also intend to further expand collaboration with startups in new areas, including specialized AI solutions and security products. In addition to the strong synergies expected with CTC, the ICT and Financial Business Company as a whole will work closely with DENTSU SOKEN across a broad range of areas. Through these efforts, we aim to accelerate the realization of the business plan and further increase profit contributions. That concludes my remarks. Thank you very much for your attention.

[Statements in English on this transcript were

spoken by an interpreter present on the live call.]

Hello, everyone, and welcome to ITOCHU Day 2026. I am Harada from IR Department. Thank you very much, as always, for your continued support. As this is our company's first ever IR Day, we sincerely appreciate the participation of so many of you, both here at the venue and via Zoom. Here is today's program. We are scheduled to conclude at 5:10 p.m. Although the session will run for a little over 2 hours, we would greatly appreciate you joining us through to the end. Without further ado, we will begin with the theme Value Creation, the ITOCHU Way. President Ishii, please.

I am Keita Ishii, President and COO. Thank you all for taking the time to be with us today. Today's IR Day is meant to give you a deeper understanding of the business strengths and on the frontline efforts that support our sustainable growth. These are areas that we cannot always explain fully in our regular earnings briefings. To help do that, the 8 presidents who lead each division company will also speak today. They will explain which business areas they will focus on, how they plan to expand and evolve those businesses and how those efforts will lead to further profit growth. They will also share specific initiatives and the groundwork they are laying for the medium to long term. Through today's IR Day, we hope to deepen your understanding of our management policy and growth strategy and to further strengthen your confidence in ITOCHU, including the Q&A session, all of us speaking today will do our best to provide clear and candid explanations.

With that, let me begin with a brief discussion of ITOCHU style value creation. First, I would like to talk about the management approach that we have followed consistently over many years. Please look at the slide. This graph shows our consolidated net profit and core operating cash flows over the past 10 years. As you can see, both have grown steadily. At the same time, the business environment during those 10 years has been far from stable. In fact, it has been a series of unexpected changes. Globally, we have faced the COVID-19 pandemic, Russia's invasion of Ukraine and the resulting sanctions, disruption to global trade caused by U.S. tariff policies, rising geopolitical risks in the Middle East and other regions, supply chain disruptions and major swings in resource prices.

In Japan as well, the assumptions behind business have changed in many ways. These include the launch of the Takaichi Administration, the continued depreciation of the yen, the shift from deflation to inflation and changes in economic security policy. We believe that by responding to each of these changes in a timely and appropriate way and by continuing to improve our ability to adapt, we have achieved steady upward growth and reached the earnings level we have today over JPY 900 billion. This is the result of our unwavering commitment to our distinctive management approach, our relentless focus on lean management, symbolized by the principles of earn cut, prevent, our commitment-based management that consistently delivers on market expectations, our downstream-oriented mindset embodied in profit opportunities are shifting downstream and our market in approach and our emphasis on frontline capability and hands-on management to continuously strengthen our businesses and enhance profitability.

Each of these practices has played an essential role. Together, these initiatives represent the essence of our distinctive management approach and have been the driving force behind our current level of earnings. Recently, some investors have asked how ITOCHU will continue its high-growth story, given that our profit growth has somewhat moderated over the past few years. Let me take a moment to break this down and explain the underlying drivers. Please look at the graph showing core profit. As shown on the left, total core profit has been almost flat. However, as shown on the right, core profit in the non-resource sector, where we have continued to focus has kept growing steadily. In other words, non-resource earnings built through our management with clear conviction are still growing step by step.

On the other hand, core profit in the resource sector, mainly iron ore, coking coal and energy interests has been on a downward trend. This is due in part to the depletion of energy interest and the impact of sanctions on Russia. As for iron ore, we have the second largest asset base among general trading companies. Compared with Energy Resources, supply side geopolitical risk is relatively low. However, on the sales side, earnings are more easily affected by market prices, especially those driven by supply and demand in China. As a result, core profits from iron ore, which is one of our strengths, are not yet fully reflecting that strength. That said, profits in resource businesses are affected more by market cycles than by company efforts alone.

In iron ore, we believe downside from here is limited. Rather, we are watching for a chance of recovery from the bottom. We hope you will look forward to further improvement in our core profit going forward. Next, I would like to talk about frontline capabilities, which are one of the key elements of our distinctive management approach. As I have often said, when we expand into new business areas, one of our basic approaches is to dispatch our people when we enter into capital alliances. By placing our people in our partners' operations, we can see from the inside whether they can work with us to create value and whether we can truly share the same culture. We do not look only at management numbers. We also look closely at what is happening on the business front lines, what can be improved and how we can contribute. Then we make proposals based on the judgment and insight expected of a general trading company professional, and we test and verify those ideas.

We also use our broad business portfolio to propose collaboration across different industries. In many cases, these are ideas that partner companies may not come up with on their own. We have already done this successfully in companies such as NIPPON ACCESS, DESCENTE and CTC. Starting from our investment participation, we created synergies with our group and helped raise each company's earnings level. At NIPPON ACCESS, we built up initiatives in food distribution and developed it into the industry's leading business platform with full temperature zone distribution capabilities.

At DESCENTE, we turned the China business into a growth driver. At CTC, we developed it into a core company supporting our group's digital value chain. Sending people to the front lines will become even more important going forward. In the real world, there are many issues that cannot be solved by knowledge or AI alone. Human relationships, emotions and trust built on the ground still matter greatly. By working in these real business settings, our people strengthen their negotiating skills, interpersonal skills, insight, ability to adjust and ability to notice what really matters.

We believe that by linking these frontline capabilities with the business portfolio we have built across supply chains in many industries, especially in Japan, we can continue to create new value in ways that are unique to us. The steady performance and growth of our group companies are the result of this accumulated strength on the ground, and we believe now is the right time to use that strength to move to the next stage. I would also like to touch on the phrase, merchants need to be adaptable like water. I understand this was a lesson Chairman and CEO, Okafuji received from his superior during his years in sales. Water changes its shape freely. It flows into small spaces. And over time, it forms a large current. Merchants must do the same. When the environment changes, we must change with it. We must go into the front lines and create new business flows that fit the new environment. In simple terms, it is about being flexible and adapting quickly.

As I mentioned earlier, the world today is changing in unexpected ways, and that change is becoming more complex. Things we once took as given can suddenly stop working. When that happens, we must keep adjusting our businesses each time. We must use the experience and business knowledge we have built to respond to new demands in each era. We cannot change the global flow by ourselves but we can move with that flow, identify new needs and create new value. The general trading company model is well suited to this. It is resilient in a changing environment and allows for quick course correction. Among general trading companies, ITOCHU is especially well positioned because we have a broad and diversified portfolio that allows us to allocate management resources flexibly as conditions change.

We believe the best way to increase corporate value is to build up profits steadily under a balanced and resilient portfolio while limiting swings caused by changes in the external environment. Over the past 10 years, we have continued to deliver steady upward growth under all kinds of business conditions. We believe this shows our ability to adjust and adapt. Having achieved profit of over JPY 900 billion in FY 2025, we are now fully focused on delivering what has always been our commitment, sustained upward growth. Why are we so focused on steady upward growth? Because we believe it is directly linked to everything that matters, stable shareholder returns, stronger competitive advantage, higher employee motivation, the ability to attract talented people, favorable financing, economies of scale, a stronger corporate brand and our commitment to society.

To achieve this, we need a solid and well-balanced earnings base that is not easily shaken by changes in the business environment. So far, we have steadily strengthened that foundation by improving our earnings power with a focus on non-resource, downstream-driven and hands-on management. This is also why we have consistently emphasized indicators such as the ratio of group companies reporting profits and the number of group companies achieving record high profits. And in FY 2026, we will take the first step in a gear shift toward a higher stage of growth. Under our policy of no growth without investments, we will carry out growth investments of JPY 1.5 trillion level and work to create new core businesses. There are no boundaries when it comes to business opportunities. Like us, companies around the world are looking beyond their existing businesses in search of their next growth opportunities through new technologies, new materials and new fields.

Customers and society are also asking for more. They want products that better meet their needs, safer supply chains, more efficient systems and partners they can grow with. We believe there is still significant room for our group to further strengthen the earning power. And because we have a wide range of business areas and deep insight rooted in the front lines, we are confident that we can continue creating lasting value over the medium to long term. I have also instructed each division company president to pursue investments of meaningful scale that can become the next pillar of earnings. Compared with other general trading companies, we have a higher share of earnings from Japanese domestic businesses. This strong business base in Japan supports the stability of our earnings. In Japan, where we have built up expertise in networks over many years, we can make full use of our strengths. These include access to information, the ability to respond quickly when problems arise and broad and deep relationships across many industries.

Japan is also a market where we can expand business steadily while managing risk. In fact, domestic group companies have been central to the steady buildup of group company profits. At the same time, we believe Japan is now at a major turning point. The shift from deflation to inflation, corporate governance reform, structural change driven by AI and digital transformation, national resilience, economic security and the serious decline in the labor force. These are not temporary issues. Japanese society and industry are both entering a period of major transformation because we have been deeply committed to business in Japan for many years. And because we understand industrial structures well and have a wide range of networks, business platforms and customer touch points, we believe we are well positioned to turn this period of change into a growth opportunity.

At the same time, large overseas investors are increasingly focusing on Japanese assets. In some ways, people outside Japan may be moving even faster to recognize the change and potential that are now emerging here. We are also receiving more approaches from companies in Japan and overseas that want to work with us. I believe they come to ITOCHU because they see us as a company that can go deep into the front lines in Japan, move businesses forward and turn those efforts into real commerce. To turn this opportunity into value creation, we must use all the functions we have, trade, business investment, logistics, finance, digital capabilities and our knowledge and networks in Japan and overseas. By doing so, we can support value creation and renewed growth at Japanese companies and at the same time, contribute to the Japanese economy. I believe this is one of the most promising growth paths for ITOCHU.

Today, we would like to focus on 3 themes that are common across all of our business segments: evolution of the value chain, practice of marketing and data-driven value creation. Together with the 8 division company presidents who lead each division companies, we will look more closely at ITOCHU style value creation through these themes. While each division company operates in a different business, we hope you will see that they all share a common approach to value creation that is unique to ITOCHU. Our frontline capabilities, together with the spirit that merchants need to be adaptable like water, allow us to keep capturing change and keep evolving the way we create value. And because this culture is firmly rooted throughout the company, it has supported the strong growth we have delivered so far. I hope today's discussion will help deepen your understanding of ITOCHU's distinctive management approach and the long-term value creation that lies beyond it. That is all from me.

Thank you very much, President Ishii. We will now move to our first session, evolving value chains across foundational industries. First, let me introduce today's speakers. Member of the Board, Executive Vice President, President Machinery Company, Deputy COO, Tsubai; Senior Executive Officer, President, Metals and Minerals Company, Tanaka; Managing Executive Officer, President, Energy and Chemicals Company, Miyazaki; and Senior Executive Officer, President, General Products and Realty Company, Maki.

I am Miyazaki of the Energy and Chemicals Company. Our segment's strength lies in building value chains that connect upstream resources and raw materials with downstream customers and support foundational industries. Today, I would like to explain how we create value through these value chains and the initiatives we are undertaking for future growth. Our segment consists of 2 divisions, the Energy and Power Solutions division and the Chemicals division. In the energy field, we operate across the full value chain from upstream interests to oil and LNG trading, power and renewable energy plants, battery storage facilities, power trading, and the sale of petroleum products and LP gas through ITOCHU ENEX. In the chemicals field as well, we handle a broad range of products, including mineral resources, inorganic raw materials, plastic resins and organic industrial chemicals. By connecting resources and raw materials, trading functions, group companies and downstream customers, we have built a strong value chain that supports foundational industries.

Importantly, our presence at every stage of the value chain enables us to build close relationships with customers, respond accurately to changes in industrial structures and on-the-ground needs and convert those insights into new commercial flows and business opportunities. This strength is clearly reflected in the steady earnings growth of the Chemicals division. Its net profit increased from JPY 32.8 billion in FY 2021 to a planned JPY 46 billion in FY 2026, which would be a new record high. This growth has been driven by both the strong performance of our 3 key group companies, ITOCHU CHEMICAL FRONTIER, C.I. TAKIRON and ITOCHU PLASTICS and the stand-alone trading business of Chemicals division also achieved a record high profit last fiscal year.

In other words, growth is being generated by both stand-alone trading and group companies. Importantly, this growth is not dependent on any single product or temporary market conditions. Rather, it is supported by our ability to capture market changes and expand our business domains through a broad product portfolio and extensive customer base, including semiconductor-related materials, construction materials, packaging containers for FamilyMart and raw materials for generic pharmaceuticals. Looking ahead, we will continue to leverage frontline insights to further enhance our trading capabilities, strengthen the earnings power of our group companies and pursue new investments, thereby achieving further growth.

Let me share a few specific examples from the Chemicals division. Methionine, which is expected to see solid growth driven by global food demand is one example. We handle the entire volume of methionine produced by Sumitomo Chemical and sell it worldwide. We are also among the global leaders in synthetic resin trading volume, and our product coverage extends broadly from basic chemical feedstocks such as sulfur and ammonia to daily necessities and supplies. Profits of our 3 major group companies have also grown significantly. ITOCHU CHEMICAL FRONTIER has expanded its pharmaceutical and fine chemicals businesses and has achieved record high profit for 6 consecutive years. C.I. TAKIRON has strength in construction materials and semiconductor-related materials. ITOCHU PLASTICS handles packaging containers and electronic materials and achieved a record high profit in FY 2025.

Across the Chemicals division, we are involved at every stage of the value chain from raw material supply to processing and manufacturing and on to sales. Guided by ITOCHU's spirit of merchants need to be adaptable like water, we stay close to our customers and business partners in the field, enabling us to capture emerging issues, needs and market changes in a timely manner. Our strength lies in this deep involvement across the entire value chain, driven by both our trading business and group companies and in our ability to convert frontline information into new sources of value creation. Lastly, one of our key future growth drivers is the expansion of our semiconductor-related business. In addition to resin plates for semiconductor manufacturing equipment at C.I. TAKIRON and photoresists at ITOCHU PLASTICS, we are expanding into new areas such as investment in manufacturers of high-purity chemical solutions and securing upstream mineral resources.

Through these expansions, we aim to create synergies with our existing businesses while building a new earnings base. Here again, our focus is not simply on building up individual businesses one by one. Rather, we are looking at entire value chain from raw materials and components to manufacturing processes and end demand while leveraging the customer relationship and business platforms we have built over time to create new business and investment opportunities. By doing so, we will drive the next stage of growth for our segment. Going forward, we will continue to deepen our presence on the front lines of foundational industries, further evolve and expand our value chains and achieve a higher level of growth through a gear shift.

I am Tanaka from the Metals & Minerals Company. The key strength of the Metals & Minerals company, which engages in resource business lies in the strong and long-term partnerships we have built with top-tier partners, including major mining companies through our ownership of high-quality resource interest centered on iron ore and coking coal. In iron ore, we have built strong relationships with partners such as BHP in Australia, CSN Mineracao in Brazil, referred to as CM and ArcelorMittal in Canada. In coking coal, we are advancing projects in Australia together with partners such as Glencore and Whitehaven. Together with our partners, we will continue not only to further enhance our existing iron ore and coking coal interests and drive organic growth, but also leverage our long-term partnerships with them, other major resource companies and Tier 1 industry players, together with ITOCHU's own capabilities to build a new pipeline of upstream interests and pursue participation in those opportunities.

The Metals & Minerals Company must do resources. Thus, I hope you look forward to what we will be achieving. Our additional investment in CM executed in FY 2024 was not only intended to simply increase our stake, but to also build and develop our low-carbon direct reduced iron supply chain that I will explain going forward, strengthen our collaborative relationship with CM and further deepen our hands-on management. We consider this initiative to be unique, and that is typical of ITOCHU. Now I would like to explain about our low carbon direct reduced iron value chain. In the steel industry, the largest emitters of CO2 within the manufacturing sector, the transition to lower carbon production methods is a significant challenge.

Steel products are essential basic materials for a wide range of industries, including automobiles and construction. Therefore, decarbonization of the steel production process is not the only issue for the steel industry. The GX acceleration declaration and its associated government incentive support and public procurement by the government are contributing to the expansion of initiatives and demand for the adoption of green steel among end users.

Low carbon direct reduced iron enables steelmaking with lower CO2 emissions by using natural gas to reduce iron ore compared with the conventional blast furnace process, which uses coke to reduce iron ore. Looking ahead, the introduction of hydrogen-based reduction is also expected to achieve net zero CO2 emissions. To contribute to reducing CO2 emissions across industries, we are participating in this project as a core member together with JFE Steel and EMSTEEL of the UAE. Within this value chain, we will put forth our capabilities across the entire chain from upstream to downstream. On the upstream side, our role is to realize stable production and supply of high-grade iron ore at CM in Brazil in which we invest as such ore is indispensable to produce low-carbon direct reduced iron. We are also arranging JBIC financing premised on securing resources for Japan, providing digital transformation support for the project together with GE in the United States and providing various technical support for the production of high-grade iron ore.

From the midstream to the downstream, in addition to our role in trading the high-grade iron ore produced, we will work with EMSTEEL on the low carbon direct reduced iron manufacturing business. The low carbon direct reduced iron produced there will then be supplied to steelmakers. Our roles are not only to serve JFE Steel, but also to develop additional offtake customers, which is an important function in ensuring the overall economics of the project. Furthermore, the entire ITOCHU Group is involved in this initiative, including the supply of iron scrapped by ITOCHU Metals to steelmakers as an important source of ferrous material and securing sales channels for steel products through Marubeni-Itochu Steel. In this way, we believe this project is a great example of how a value chain can be built by linking downstream needs with high-quality upstream interests, where ITOCHU as a core member can contribute with its capabilities across the chain.

Going forward, we will continue to pursue investments not only in upstream interests, but also investments that lead to the creation of value chains capturing industry needs that are unique to and that is typical of ITOCHU.

I am Maki, President of General Products and Realty Company. Today, I would like to explain the unique value chain we have built with wood at its core, together with our strategy for future growth. Our defining strength lies in the fact that we have expanded our value chain, starting from raw materials such as woodchips and rubber, all with wood at their core and have consciously focused on adding value and deepening our business, we have evolved from woodchips into paper, pulp, packaging materials and molded products. From the rubber and tire business, we have expanded further into the automotive aftermarket, including maintenance service as well as the used car business. In terms of expanding our business domains from upstream to downstream, our building materials business covers a wide range of outdoor living, engineered wood products and interior building materials. Furthermore, guided by the market in approach, we have expanded into downstream areas such as real estate development, civil infrastructure and real estate renovation as aftermarket business areas.

While other trading companies may treat real estate as a financial business, we have evolved the value chain as a housing-related business originating from wood. Another distinctive strength is our logistics capabilities, which support our business from upstream to downstream. By evolving materials such as wood, which have been used since ancient times, we have established the #1 position among trading companies in this field. As an industry leader, we remain conscious of our role at the forefront and with an eye on industry realignment, we intend to continue driving the industry forward.

Let me explain the 4 key focus areas in the construction and real estate business. The first is domestic development. We have announced the integration of the real estate business between the JR East Group and ITOCHU Property Development, and we aim to proceed with the development of high-quality assets at speed. With construction costs rising and the real estate market remaining at high price levels by partnering with the JR East Group, which possesses many low-cost assets, we hope to achieve accelerated growth. In addition, we see the public-private partnership projects and data center business as areas for significant expansion. The second is the real estate aftermarket. Through our capital and business alliance with Sun Frontier Fudousan, we have made a full-scale entry into the real estate aftermarket business. There are approximately 5,500 target aged office buildings in the 23 wards of Tokyo alone. Amid persistently high new construction costs, we are promoting a new initiative in the real estate market by renovating and renewing properties through renovation works.

We also intend to leverage our asset management and property management functions to further strengthen our activities in the real estate aftermarket business. The third is civil infrastructure. This is a field where long-term stable growth is expected given social issues such as national resilience and aging infrastructure. Centered on collaboration with Nishimatsu Construction and Oriental Shiraishi, we are working to solve social challenges through renewal projects, infrastructure development and regional revitalization, thereby strengthening our social foundation and long-term stable earnings base. The fourth is North American real estate. Last year, we entered into a capital and business alliance with Wood Partners, one of the top residential developers in the United States. Wood Partners operates in 17 locations across North America, identifying high-quality projects in a housing market with medium- to long-term growth potential. In addition to our investment in Wood Partners, we also aim to serve as a gatekeeper for domestic and international investors considering real estate investment in North America.

In North America, we operate a broad range of businesses from the manufacturer of outdoor living, engineered wood products and interior building materials to distribution and sales, primarily through Master-Halco, the #1 distributor and wholesaler in the United States. With more than 85 locations across the country, we have established a wide-reaching business network, and we intend to steadily expand both our areas and business domains going forward. Our collaboration with Wood Partners will further enhance our value chain in North America, aiming for continued business growth and expansion. As I have explained, we will continue to evolve its unique value chain built with Wood. Through collaboration across our business areas and the synergies, we will pursue ongoing earnings growth and improved capital efficiency. By strengthening our real estate and infrastructure businesses in an integrated manner, we are committed to achieving sustainable growth in corporate value.

Thank you very much for your attention.

My name is Tsubai, President of the Machinery Company. If I were to describe the Machinery Company's defining characteristic in a single phrase, it would be the exceptionally broad range of our business portfolio. One distinguishing feature of the Machinery Company is that businesses which would typically be managed across several different divisions at other trading companies are housed within a single company at ITOCHU. I have served as President of the Machinery Company since 2019, and this year marks my eighth year in the role. Net profit was JPY 56.7 billion in FY 2019 when I assumed this position and as shown in the materials, increased to JPY 80.6 billion in FY 2021. It then reached JPY 155.6 billion in FY 2025, and we are targeting JPY 180 billion in FY 2026. Today, I would like to highlight 4 factors behind this profit growth.

The first is profit growth in our existing businesses, driven by what we call earn, cut, prevent. One example is Yanase. In FY 2019, when I assumed this role, our profit contribution from Yanase was JPY 3 billion. Since then, we have increased our share and through hands-on management, thoroughly pursued what we call cut and prevent. As a result, profits have expanded significantly, and Yanase is targeting JPY 15 billion in FY 2026. The second factor is strategic investments aimed at expanding the value chain. In the automobile, construction machinery and industrial machinery sectors, trading had historically been our core business. However, we have executed investments based on the idea of extending and deepening the value chain. To give a few examples, in our collaboration with Isuzu, we shifted our investment focus from sales companies to companies engaged in maintenance leasing, used vehicle sales and auctions.

This is one example of moving further downstream in the value chain. On the upstream side, we have formed capital alliances with Japanese OEMs such as Hitachi Construction Machinery, IT Corporation and Kawasaki Motors. In the plant project sector, we also invested this fiscal year in a Singapore-based company engaged in plant maintenance and repair. Rather than simply building plants and handing them over, we are expanding our business domain into the maintenance of plant facilities and major equipment. In the aerospace sector, aircraft leasing to airlines had long been our core business. But in FY 2024, we invested in an aftermarket company on the downstream of the aircraft business that dismantles aging aircraft and sells the parts. In this way, we have executed a range of strategic investments across a wide variety of fields.

The third factor is the benefit of yen depreciation. The machinery company has a high proportion of profit contributions from overseas trading and overseas group companies, and the recent depreciation of the yen has also contributed to our profit growth. The fourth factor is businesses positioned to benefit from structural market trends. One example is our North American power business. In the United States, the Inflation Reduction Act enacted in 2022 under the Biden administration created a policy environment that supports renewable power generation. Anticipating these market trends, we moved early to establish a platform focused on the development and sale of renewable energy generation assets, positioning ourselves to capture business opportunities in the market. This business not only offers quantitative benefits in terms of high asset efficiency and profit contributions, but also contributes to the expansion of renewable energy in North America.

The Machinery Company operates a wide range of businesses. And today, I would also like to introduce a new business. Although the project is still in the pre-commercialization phase, we are working on an integrated ammonia project. Ammonia is gaining attention as a next-generation decarbonized fuel that does not emit carbon dioxide when combusted. Among its many potential applications, we see it as a leading candidate for marine fuel to help decarbonize international shipping, and we've already been working on this project for 6 years. A key feature of this project is that ITOCHU is involved across the entire supply chain in an integrated manner from the upstream production of clean ammonia to the downstream ownership and operation of ammonia-fueled vessels. Most important of all is the midstream segment, namely fuel supply hubs and bunkering. Because ammonia is toxic and difficult to handle, we plan to conduct demonstration and pilot bunkering operations in Singapore in the second half of 2027.

This project encompasses the production of decarbonized fuel as an energy resource, the supply of that fuel, the operation and management of decarbonized fuel vessels and the realization of a broader social mission. Although ammonia plants, bunkering operations and fuel vessel operations each fall into different business domains, all are areas where the machinery company can leverage the expertise it has built up in the plant and marine sectors. By leveraging the comprehensive capabilities of the machinery company, this initiative seeks to create an entirely new supply chain from the ground up, something only ITOCHU is uniquely positioned to achieve. We aim to develop this business into a new pillar of earnings and a key growth driver over the medium to long term. ITOCHU has a broad value chain spanning fundamental industries, and we hope today's presentation has given you a glimpse of its potential for further evolution.

We would now like to ask our 4 speakers to each give a brief comment on the theme. What is the growth potential of your companies? The first is real estate sector, where I have professional roots. In recent years, the business environment surrounding the real estate market has undergone significant changes, including rising construction costs and land prices, soaring prices for newly built condominiums and office rents as well as challenges such as labor shortages and the need to address environmental issues. We see these changes as opportunities for growth with the mindset of how to effectively utilize existing assets, we are proactively promoting our real estate aftermarket business, which creates new value through renovation and value enhancement.

The second is the automotive sector. Leveraging the expertise gained at Kwik-Fit, the U.K.'s leading tire sales and service company, we have expanded this expertise to the domestic market and invested in the used car sales business, WECARS. Going forward, we aim to develop WECARS as a platform, not only for maintenance services, but also by integrating insurance and financial services, thus evolving into an aftermarket business that continuously provides value to customers through long-term relationships. In this way, our company is working to strengthen aftermarket businesses in both real estate and automotive sectors, striving to build a robust long-term revenue base and to further enhance customer satisfaction.

For many years, we have been known as a general trading company with a strong focus on non-resource businesses. While not all the metals and minerals companies' businesses are resource-related, resources account for the majority of our business. Despite being a major earnings contributor, we have sometimes perceived as being somewhat overlooked within the group, which inevitably affected morale. However, recently, as our Chairman and CEO stated at the May earnings presentation, we have begun to see a more supportive environment within the company for the view that as a general trading company, participation in the resource business is essential. While this message may have come as a surprise to some of you, it has been a tremendous source of encouragement for the metals and minerals company.

That said, this does not mean that we will pursue every single opportunity indiscriminately. We will continue to carefully select projects working closely together with our top-tier partners, including major mining companies with whom we have built long-term partnerships. Going forward, we will remain disciplined focusing on opportunities that can deliver meaningful profit contributions to ITOCHU Group. Our segment is engaged in businesses involving semiconductor-related materials and storage containers through the Chemicals division and group companies. In our segment, deepening of the semiconductor business does not mean consolidating these operations into a single division or company. Rather, it means that the Chemicals division will provide overall leadership from a comprehensive perspective and strengthen coordination across related operations among Chemical division and group companies.

In addition, while Japan holds an 80% to 90% global share in many categories of semiconductor chemicals manufacturing, raw materials, in many cases, remain highly dependent on China. In the point of view of economic security, we need to consider not only securing raw materials, but also ensuring the stable supply of the natural resources from which they are derived. In this sense, viewing the business from the standpoint of the upstream supply chain is also a key element of deepening. On the other hand, expansion refers to broadening the business into areas surrounding our existing operations. Through these twin drivers of deepening and expansion, our segment aims to achieve further growth in its semiconductor-related business.

The lifeline of the Machinery Company is its global network of overseas partners and developers. The strategic investment I introduced earlier were mainly towards Japanese companies. The reason why those companies seek capital alliances with us lies in our overseas network. They approach us with proposals for collaboration because they value our overseas marketing capabilities as well as our financing and leasing functions. That is why we must continue to further strengthen this overseas network. At the same time, as a result of developing a wide range of businesses overseas, we have also received numerous requests for collaboration from overseas partners. Through such collaboration, we hope to gain new insight into the strengths of Japan and the strengths of a general trading company. In that sense, the further evolution of collaboration with overseas partners represents the machinery company's growth potential.

Thank you very much. With those comments in mind, I would now like to invite President Ishii to provide an overall summary.

These 4 division companies represent what could be described as the very origins of the general trading company business. Historically, all Japanese general trading companies develop their operations around these types of foundational industries. Originally, general trading companies sourced products from manufacturers and marketed them overseas as intermediaries and distributors. As manufacturers expanded their own capabilities and global operations, the need for traditional trading functions came into question. Even in this environment, we remain committed to our trading business and sustained it over the years by creating new functions, expanding business domains and strengthening value chains. These efforts drove growth both along and across industries and the initiatives presented by our 4 division companies are a direct extension of them.

Even during supply disruptions such as the recent naphtha shortage, products and materials supporting essential industries remain indispensable. We've strengthened our trading business by continuously enhancing capabilities and building robust value chains. Trading provides strategic advantages through global supply visibility, deep market insight and a strong understanding of customer supply-demand dynamics. The recent naphtha shortage also created opportunities for our chemicals business. When customers face shortages, we were able to identify alternative sources by leveraging our global network and market knowledge. By applying our expertise and responding with agility to support our customers, we built trust and enhanced our reputation. In this way, we have evolved our business by using trading as our foundation while expanding vertically into supply chains, broadening value chains and developing horizontal collaboration across industries. As we continue to build a stable and resilient portfolio, we believe these foundational industries will remain areas that we must preserve and strengthen.

Thank you to all of speakers. Now let us move on to the next theme. The essence of profit opportunities are shifting downstream, practice of marketing. Let me introduce our speakers. Senior Executive Officer, President, Textile Company, Takeuchi; and Senior Executive Officer, President, Food Company, Miyamoto.

I am Takeuchi, President of the Textile Company. Today, I would like to explain from a marketing perspective, why ITOCHU's Textile Company has continued to maintain a strong position in the textile industry. The source of our strength lies in a value chain that spans every segment of the textile industry from upstream to downstream and in our capability to apply a market in perspective to product development. In addition to our manufacturing capabilities, including raw material procurement and networks with factories, we have also established a framework that allows us to directly capture the voices of consumers through major business partners, more than 150 brands, over 200 sub-licensees that do business with those brands and a network of more than 300 directly operated stores. Our true strength lies in our ability to quickly identify consumer needs through a market and approach, build the optimal supply chain and translate those needs into products.

First, let me introduce several examples from our B2B business. The first example is the development of Innerwear with deodorizing functionality. ROYNE, our subsidiary engaged in apparel OEM business, jointly developed deodorizing innerwear with a major retailer. In addition to its functional value, the product name was updated to better align with the target customer segment, which helped drive sales growth. The second example is the initiative of ITS, our subsidiary in China. ITS is a supplier that is highly regarded by global sports brands. In the sportswear segment, where multi-style small lot production requires a high level of manufacturing expertise, ITS leverages its value-added manufacturing capabilities to expand its OEM business, not only for DESCENTE, but also for other brands within ANTA Group, which jointly operates DESCENTE China.

The third example is product development for FamilyMart's convenience wear line. For FamilyMart's convenience wear, products are planned by combining data from more than 16,000 stores nationwide and direct consumer feedback with ITOCHU's supply and production capabilities. Bra wear launched last year is one example of a high value-added product that requires advanced sewing technology and showcases our manufacturing strengths. Next, I would like to introduce our initiatives in the B2C business. In addition to JOI’'X and LEILIAN, which have long operated directly managed retail businesses, DESCENTE, EDWIN, DOME and CORONET are also strengthening their retail operations. Because retail businesses allow us to capture voice of customers directly, they are indispensable to further refining our marketing approach. Going forward, we intend to further enhance our retail management capabilities by recruiting external specialists, utilizing AI-based consumer analysis and learning from our partner companies.

One example of the results of these efforts is DESCENTE's ORI-ERI polo shirt by uncovering customer demand for apparel suitable for business settings and applying DESCENTE's technological strengths we repeatedly refined the product so that the color would maintain a neat appearance even under a business jacket. As a result, it has become a popular item. In this way, by combining consumer insights gained at the retail front line with our manufacturing capabilities upstream and midstream, we can create hit products with both speed and precision. Looking ahead, we will continue to strengthen our product competitiveness by connecting insights between upstream, midstream and downstream operations and leveraging a marketing approach throughout the value chain. We believe that consistently creating value-added products such as those presented today will be a key driver of the textile company's sustainable growth.

Thank you very much for your attention.

I am Miyamoto, President of the Food Company. Today, I would like to explain our approach to the downstream area. The food company operates across the full value chain from raw materials and distribution to retail. In the past, our business may have been seen mainly as a product out model where products move from upstream to downstream. In recent years, however, we have changed this approach significantly. Today, I would like to focus on that change. First, let me talk about the idea that profit opportunities are shifting downstream. This is a message that Chairman and CEO, Okafuji, has emphasized repeatedly. And as the food company, we have once again recognized the fundamental importance of this approach. Focusing on downstream does not simply mean owning downstream businesses. That is important, of course. but the real essence is to stay close to consumers, accurately capture changes in their needs and build the entire business from that starting point.

In the food sector, consumer needs are becoming more diverse and continue to evolve. These changes include health and nutrition awareness, time saving and convenience preferences to shifts in the definition of taste and deliciousness, environmental considerations and SDGs and also topical appeal and experience value. In this environment, one of our key priorities is how to respond to these changes and turn them into business opportunities. Our aim is to capture these changes accurately at the downstream level and connect them to product planning, raw material procurement, material development, manufacturing, processing, logistics and sales. In this way, we seek to create valuable products from a consumer starting point and deliver them in the best possible way.

In particular, the food market has changed greatly over the past 10 years. First, products that highlight health, nutrition and beauty benefits have become far more important. A symbolic example is protein. 10 years ago, protein products were not nearly as common as they are today. Now in addition to protein, there are many products that promote specific functional value such as better gut health, lower blood pressure or relaxation effects. At the same time, consumer needs are not only about adding something beneficial, they are also about removing unnecessary ones. We now see many zero products in the market such as sugar-free, zero carb, zero calorie and zero purine products. From an ethical perspective, we also see changes linked to the SDGs, especially among younger consumers, some are becoming more conscious about eating animals. Not all of them are fully vegan, but some are adopting styles such as eating vegan once a week.

We are seeing these kinds of lifestyle choices become more common. Environmental awareness is also rising sharply. For example, even university students now speak more often about these issues during job interviews. Another clear change among younger consumers compared with 10 years ago is lower alcohol consumption. Terms such as smart drinking are now used and choosing not to drink alcohol has become more socially accepted. People can express that choice more openly. We also see changes in preferred food texture. Younger consumers often do not like foods that are too hard. Softer textures are preferred. In some cases, rice crackers or even grilled meat may be seen as too firm. At the same time, Korean food and ethnic food have become more common, while Japanese food is also spreading more widely around the world, supported by growing inbound demand. It is no longer limited to premium dishes such as Sushi and Tempura.

A much broader range of Japanese foods, including Tonkotsu ramen and even egg sandwiches is now gaining acceptance overseas. In addition, as hot summer weather lasts longer, demand for ice cream, soft-serve ice cream and frozen food is rising further. As you can see, one of the key themes for the food company today is how to keep pace with these changes and turn them into growth opportunities. This slide shows our value chain and the starting point is clearly downstream. One of our greatest strengths is our wide range of customer touch points, including FamilyMart, which is one of our key assets. In retail alone, we do business with around 2,000 companies. If we also include intermediate materials such as transactions with factories, we have about 10,000 business partners. Among these roughly 2,000 retail customers, there are also companies where we dispatch personnel regardless of whether we have an equity relationship with them through store data, purchasing data, customer feedback and frontline sales knowledge, we capture changes in consumers and at the point of sale every day.

What matters most is that we do not leave those insights as simple information. We connect them to our own functions and turn them into actual product development. At the center of the slide is the process of designing product concepts based on consumer needs and linking them to development. Let me share one example, although it is not a recent one. A buyer and developer for canned coffee once approached our coffee team for support in product development. The manufacturer wanted to create an authentic coffee with both a bright, floral aroma and rich body. In response, we proposed coffee beans from Guatemala and also provided dozens of ideas for fermentation methods. That effort led to commercialization. This is a good example of how we connect consumer needs to concept design and product development. Working together with our midstream and upstream group companies, we continue to promote many such initiatives today. And of course, it is just as important to deliver the products we create in the best way.

The annual value of products we supply through our downstream infrastructure is approximately JPY 4 trillion. We have around 600 logistics sites and about 7,000 operating vehicles per day. We are always focused on delivering the right products at the right time. NIPPON ACCESS has a very strong competitive position in frozen and chilled logistics. ITOCHU-SHOKUHIN became our wholly owned subsidiary in May this year. We also have strong logistics capabilities in many fields, including confectionery logistics through Confex and fresh produce logistics through KI Fresh Access. In this way, we do not simply wait for products to sell. We propose valuable products from a consumer starting point and create demand ourselves. That is our mission.

Next, let me explain 3 examples. The first is NISSEI. We invested in NISSEI, a comprehensive soft-serve ice cream manufacturer. NISSEI does more than just sell soft-serve ingredients. It also sells machines as part of a package, provides maintenance, develops products and carries out its own sales promotion activities. It then provides these products and services to customers in food service and retail. One area where we can add value is channel expansion. As I mentioned earlier, we have broad customer touch points through our business network. In addition to the customer base that NISSEI already has, we can introduce new customers through our own network. In that sense, our downstream strengths can play a major role. Going forward, we hope to expand this partnership not only in Japan, but also in overseas markets.

The second example is Dole's initiatives addressing environmental and social awareness. At Dole, bananas that are slightly outside standard specifications or slightly discolored but have no issue at all in taste or quality have been branded as Mottainai Banana. For example, these bananas are delivered directly to offices and consumed through subscription style services. They are also being used as ingredients in a range of products. In addition, charcoal made from Mottainai Banana has also been developed. It is easy to light, lightweight and easy to use, so it has found applications in camping. More recently, it has also been used in deodorizing products. The third example is the initiative between FamilyMart and Afternoon Tea. Working with the tea brand Afternoon Tea, we developed 28 collaboration products and sell them at FamilyMart. These products are not limited to tea. We have also jointly developed sweets and alcoholic drinks.

We believe that responding to these kinds of changes is our mission. At the same time, we believe they represent significant business opportunities. Going forward, starting from downstream ideas, we will continue to evolve our business by linking upstream to downstream and also downstream back to upstream with fork to factory and factory to farm firmly in mind.

Thank you very much. As with the previous session, we would now like to ask speakers to comment on the theme, what is the growth potential of your companies?

I believe there is significant untapped growth potential in the footwear segment within our existing business platform. Through brands such as Converse, FILA, Reebok and UNDER ARMOUR, we have sold as many as 9 million to 10 million pairs of shoes annually at our peak. However, our footwear businesses have traditionally operated in silos, limiting opportunities to leverage expertise across brands. By placing DESCENTE now a wholly owned subsidiary at the center of our strategy, we aim to connect these businesses, unlock group-wide know-how and sourcing capabilities and create new growth opportunities. Footwear and gear are key growth drivers for sports brands. While DESCENTE has historically focused on apparel, we see significant room for expansion in these categories. Going forward, we will grow DESCENTE's footwear business by leveraging footwear expertise developed in Korea and ITOCHU's overall capabilities.

We also intend to extend these benefits to existing businesses such as Converse, FILA and Reebok, driving growth across the textile company as a whole.

I believe the biggest difference between ITOCHU and other general trading companies lies in the depth of our hands-on management and in the way we put it into practice. ITOCHU has long emphasized a hands-on approach in the management of our group companies. By contrast, some other trading companies take a more hands-off stance, for example, out of respect for management independence but the hands-on approach we advocate does not mean giving one-sided instructions from the parent company. Rather, it means taking responsibility, dispatching ITOCHU staff going into the same front lines as our group companies and working alongside them to address issues together. As a result, we increasingly hear from investees and partners that they are glad ITOCHU joined them and glad that ITOCHU is their partner.

We believe this kind of evaluation can only be earned because we work together with the front lines and help create concrete results. In that sense, we believe it is highly effective in enhancing the corporate value of the companies in which we invest. This ability to go deep into the front lines and work side-by-side with our partners is, in my view, ITOCHU's greatest advantage, one that is not easily replicated by others. And I believe it also represents significant additional upside for the food company.

Thank you very much. With those comments in mind, I would now like to invite President Ishii to provide an overall summary.

The textile company and the food company are among our oldest businesses, both originated as trading operations, primarily sourcing raw materials from overseas. However, as trading alone gradually became less sustainable over time, the key challenge was how to continue creating value and remain competitive. In foundational industries, both suppliers and customers are typically large corporations. General trading companies have maintained their role by acting as agents and distributors, connecting participants across long and complex supply chains. By contrast, the textile and food sectors have relatively short supply chains and the companies involved tend to be smaller. Moreover, these businesses ultimately serve end consumers. Recognizing these characteristics, we shifted our strategy toward expanding further downstream into businesses where we could take the initiative across the value chain.

We have long-owned group companies engaged in manufacturing and processing as well as businesses that package and deliver products to consumers. Building on these foundations, we expanded further downstream by entering wholesale distribution, moving into logistics and through acquisitions, including FamilyMart. The further downstream we expanded, the more opportunities emerge to create new value. This downstream-oriented approach has been the driving force behind the growth of both division companies. While each division company has evolved in its own way, both have grown by expanding in every direction across the value chain to capture new profit opportunities. By engaging in businesses in diverse ways, they have increased businesses where they hold the initiative and establish strong purchasing leadership. Today, they are also leveraging digital technologies to further strengthen the bargaining power while expanding into higher value-added functions such as design.

Thank you to both speakers. Now let us move on to the next theme, data-driven value creation. Let me introduce our speakers. Senior Managing Executive Officer, President, ICT and Financial Business Company, Deputy COO, Noda; and Managing Executive Officer, President, the 8th Company, Hosomi.

I would like to explain the latent potential of data utilization. While generative AI has evolved rapidly in recent years, it is said that public data and general structured data available for AI training and inference are becoming exhausted. In this context, live information existing at the front line is becoming increasingly important. Generative AI is trained mainly on general purpose data accessible through the Internet, but it is said that such data represents less than 1% of all data in Japan. The remaining 99% consists of so-called dark data, including off-line information and confidential internal corporate information and other forms of unstructured data. We believe that a key source of competitiveness lies in how effectively we can convert the unique firsthand information generated across our group's business front lines as well as our deep industry-specific expertise into usable data and make it available for AI applications.

Next, let me explain our group's IT service delivery framework. At the core of this framework is CTC, a system integrator that was privatized in FY 2023. In the upstream consulting domain, we have strategic partners such as SIGMAXYZ and I&B Consulting, a joint venture with Boston Consulting Group. In the downstream BPO domain, we have BELLSYSTEM24, which operates contact centers, enabling us to build an integrated digital value chain that responds to customers' IT needs seamlessly from consulting through implementation and operations. For over 30 years, we have established a venture network across the globe, including Silicon Valley in the United States, consistently keeping abreast of the latest IT technologies and service models and have continued to invest in venture funds. To capture the growth potential of start-ups, we've also actively made direct investments in venture companies in Japan, the U.S. and elsewhere.

Japan's generative AI-related market is highly segmented with a diverse range of AI-related companies. Therefore, rather than partnering with a single company, we collaborate with multiple AI partners depending on the specific challenges to be addressed. For example, we partner with Sakana AI for generative AI foundational technology, with MAMEZO for physical AI and with AVILEN for supporting in-house AI development. Beyond these, our policy is to work with the most suitable AI partners for each theme in order to deliver cutting-edge AI solutions. Next, I would like to introduce 2 specific examples of how our group is utilizing data. First example is an initiative by Hoken No Madoguchi Group, which became a wholly owned subsidiary in FY 2025. The company holds the top share in the multiline insurance agency industry operating at about 700 locations nationwide.

By using AI to streamline the creation of customer interaction records generated through approximately 1 million consultations annually, they are advancing the sophistication of operations that deliver proposals tailored to customer needs from a wide range of insurance products. The second example is from BELLSYSTEM24, which operates contact centers. The company receives about 500 million calls annually and records or transcribes all response histories for the purpose of improving service quality. By applying AI to analyze and convert these VOC, voice of the customer, data into actionable knowledge, they are promoting the automation of customer responses. However, full automation of contact center operations is not easy. A hybrid model in which both AI and human operators each play their respective roles is most practical approach at present. It is expected that the proportion handled by AI will increase, but BELLSYSTEM24 is leveraging its strength in optimal operations to further this initiative.

Our company is strong in retail and has numerous customer touch points. However, the data obtained from these touch points is not always organized for AI utilization. By first, organizing the data and then advancing AI utilization. We aim not only to achieve operational efficiency, but also to enhance the added value of customer services.

Hello, everyone. I am Hosomi from The 8th Company. Until the end of February this year, I served as President of FamilyMart. Thank you very much for purchasing our products every day, including the Shohei Ohtani Rice Balls, FamiChiki and more recently, our Chewy bread products. As a milestone in FamilyMart's media strategy, tomorrow, we will open a next-generation concept convenience store in Azabudai Hills, created through a collaboration between FamilyMart and NIGO, the world-renowned designer who led human-made to its public listing. From Asian retailers with whom I had worked during my time in the fashion business, we have already received requests to bring this store concept to markets across Asia. It is a highly compelling store where the convenience store format merges with creativity and offers a sense of the future. I hope you will have an opportunity to visit.

The Retail Media business, the first successful case of its kind in Asia began with The 8th Company's founding vision in 2019 to create new businesses with FamilyMart as a foundation. This business has been built on 3 strategic pillars. The first is the accumulation and analysis of customer attributes and purchase data. The second is the ownership of owned media and the enhancement of brand value. The third is the revitalization of in-store sales beyond traditional SKU by SKU management.

To accumulate and analyze customer attributes and purchase data, we promoted downloads of FamiPay, a store app with payment functionality at FamilyMart stores 7 years ago. The app has now reached 30 million downloads. To diversify data and enhance analytical capabilities for the advertising business, we established Data One in December 2020. Today, data collaboration with supermarkets and drugstores has deepened, and we hold 60 million customer IDs and JPY 10 trillion in related in-store purchase data, covering around 30% of purchases in this domain in Japan. We call this highly up-to-date purchasing data, which is refreshed daily life [indiscernible] data.

In September 2021, we established Gate One and advanced our strategy of owning media by installing digital signage in FamilyMart stores. These displays are now installed in 11,300 stores and have become a media platform viewed by 18 million people each day, comparable in scale to one of Tokyo's major TV networks. As a result, ITOCHU now has both real store infrastructure 16,000 stores with apps and signage as digital touch points and digital infrastructure comprising 60 million IDs and JPY 10 trillion in related data. In other words, ITOCHU has built an integrated framework that can leverage its membership base, media and data to reach a wide range of industries, including in-store product display and sales centered on food at FamilyMart stores. The ability to seamlessly execute customer understanding, ad delivery and effectiveness verification is a key strength of our group's retail media business.

Because Life [indiscernible] data is extremely large in volume, making use of it required considerable time and effort. However, generative AI has dramatically expanded its potential. By leveraging generative AI, we are now able to analyze large-scale cross-retail purchase and behavioral data both quickly and effectively allowing us to extract actionable insights to support decision-making. For example, we can now clearly identify trends such as what products consumers who purchase certain items at convenience stores tend to buy at drugstores. Moreover, the ripple effects of advertisements placed at convenience stores on purchasing behavior at drugstores can now be visualized instantly.

In other words, instead of simply possessing data as records, we are now able to transform it into consumer intelligence, deepening our understanding of consumers. Building on this foundation, we aim to further advance our retail media business. In the medium to long term, we plan to expand the utilization of this data beyond advertising and marketing, including applications such as supply chain optimization through demand forecasting. Over the past 5 years, our advertising-related revenue has surpassed JPY 10 billion and is expected to continue growing. Looking ahead, we also intend to broaden our data utilization to adjacent fields such as finance, travel and health care. Through these initiatives, we aim to create new business opportunities as The 8th company.

I would like to share 2 examples of how FamilyMart's retail media is being used. The first is the launch of NOPE, a highly carbonated beverage. By linking the in-store merchandising app and digital signage, we achieved the highest first week sales for a new beverage product in the past 5 years. This enabled us to promote the new product at exceptional speed. This demonstrates a major shift from a convenience store model supported by SKU by SKU management to a strategy that uses media power to promote manufacturers' products, not private brands and receive promotion and advertising fees. After the initiative, we conducted detailed effectiveness verification using purchase data and FamiPay surveys through the app and provided advertisers with feedback based on a variety of data.

The second example is a sales event using FamilyMart parking lots in collaboration with an automobile dealer. We conducted the first trial in spring 2025. Signage advertisements for Hyundai of Korea were shown for 2 weeks at approximately 800 stores in the Tokyo Metropolitan area, Tokyo, Chiba, Kanagawa and Shizuoka. This was followed by test drive and sales events for about 1 week in the parking lots of 10 stores. Although the vehicles were not inexpensive, the initiative resulted in sales of nearly 50 units. We believe the ability to take a test drive at a convenience store, in other words, close to home helped lead the purchases. We have also achieved results in subsequent sales initiatives with another automobile dealer. We call this concept FamilyMart whole store media. By combining owned media and third-party media such as social media, convenience stores can serve as vital last mile infrastructure, particularly in regional areas where local infrastructure is declining.

Adding the essence of consumer intelligence to this framework may open the next stage of retail. Combining real-world data infrastructure with AI to help companies solve marketing challenges is the next key focus for The 8th company.

Thank you very much. Now we will move to our final theme, financial and capital strategy for value creation. Let me introduce our speaker, Member of the Board, Senior Executive Officer, CFO, CXO, Naka.

Hello, everyone. I'm Hiroyuki Naka, CFO and CXO. To conclude, I would like to speak about our financial and capital strategy. President Ishii and the division company presidents have shared concrete examples of how we are creating value. In this section, I would like to summarize our approach to growth into 3 methods. These are the same methods we presented in the materials released at the time of our earnings announcement in May. The first is to accelerate growth investments with high visibility, together with the active promotion of asset replacements. The second is the evolution of existing businesses, where we further enhance growth in businesses where we have expertise through hands-on management. The third is the horizontal collaboration and reorganization across sectors. By combining these 3 methods, we will achieve steady growth that is distinctive to ITOCHU.

For investors in stock market, investing typically means identifying undervalued assets, holding them until they reach fair value or become overvalued and realizing returns through their sale. For us, however, investment means something fundamentally different. By combining these 3 approaches, we continuously create value ourselves. Although both are described as investment, the substance is entirely different. Our business model is built on continuously enhancing the value of our investments through our own initiatives regardless of the management environment.

Let me once again reaffirm our basic policy. We remain committed to maintain highly efficient management as reflected in our focus on sustaining an ROE of 15% level while delivering sustainable EPS growth. For example, assuming profit growth of at least 7% to 8% and a total payout ratio of 50%, we can maintain an ROE level of 15%. While we seek to achieve a high ROE through an appropriate balance between profit growth and shareholder returns, our fundamental approach remains unchanged to sustain a high ROE primarily through continued profit growth. As President Ishii explained earlier, the core profit in the non-resource sector achieved a CAGR of 7.4% over the 5 fiscal years from FY 2021 through FY 2025. Based on our analysis, this can be broadly attributed to 2 sources: approximately 4% from organic growth and approximately 3% from contributions from new investments. Building on this track record and leveraging our strength in the non-resource sector, we aim to achieve organic growth of at least 4%, followed by at least another 4% from increased profit contributions from growth investments.

In other words, we intend to secure profit growth of at least 7% to 8%. Over the medium to long term, we are targeting profit growth of 10%, and we'll continue executing the growth strategy and approaches I have outlined today. For this fiscal year, our core profit forecast is JPY 900 billion, representing 15% growth from the previous fiscal year and marking the beginning of our gear shift. More importantly, we are committed to maintaining this growth trajectory in the years ahead. Our fundamental policy of maintaining a strong financial foundation by balancing 3 factors: growth investments, shareholder returns and controlling interest-bearing debt remains unchanged. In the near term, however, to accelerate our gear shift, we will place greater emphasis on growth investments by utilizing leverage within the boundaries of financial discipline.

Even so, our disciplined approach to capital allocation and investment execution remains unchanged. Our investment criteria are also unchanged. Although hurdle rates will inevitably rise in a higher interest rate environment, we will continue to pursue high conviction growth investments with strong earnings visibility. It is also essential to realize highly achievable synergies and enable horizontal collaboration through every investment. In addition, we intend to pursue asset replacements more actively than before. As Chair of the ALM Asset Liability Management Committee, I have already instructed each division company to take concrete steps toward executing strategic asset replacement.

Finally, let me share our image of annual cash allocation, assuming consolidated net profit reaches JPY 1 trillion. Under the assumption that core operating cash flows exceeds JPY 1.1 trillion, we also expect asset replacements to exceed the historical average of approximately JPY 200 billion. We assume shareholder returns of around JPY 500 billion and CapEx of around JPY 300 billion. Even under the assumption that cash inflows and outflows remain broadly balanced. In other words, even if we continue gradually to reduce net DER going forward, we believe it would still be possible to execute at least JPY 500 billion of growth investments annually. Furthermore, with continued growth in operating cash flows, the acceleration of asset replacements and the use of leverage, we believe growth investments can significantly exceed this level.

Even if growth investments were to remain at the minimum level of JPY 500 billion, assuming an ROI of 8%, they would generate approximately JPY 40 billion in profit contributions. This gives us confidence that sustaining annual profit growth of at least 7% to 8% is well within reach. By accelerating new investments, evolving our existing businesses and realizing horizontal collaboration and integration across the group, we believe our target of 10% growth is well within reach. Looking ahead, we expect to have opportunities to explain the details of this fiscal year's planned JPY 1.5 trillion in growth investments. For us, the JPY 1 trillion milestone in consolidated net profit is no more than a waypoint. By continuing to deliver sustainable profit growth, we will further enhance our market capitalization and create greater value for our shareholders.

We sincerely appreciate your continued support and look forward to your ongoing confidence in our management. Thank you very much. Finally, I would like to invite President Ishii to deliver today's closing remarks and overall wrap up.

Thank you very much for joining us today and for staying with us throughout this extended program. While this IR Day may have had a somewhat informal and handmade feel, we hope this event has provided you with a clear understanding of where we are heading, the fundamentals of how we generate earnings, how we intend to expand our business and how each division company president plans to lead their company to the next stage. With the FIFA World Cup currently underway, we are not the kind of team that relies on a single ace player to score all the goals. Rather, ours is a style in which everyone patiently passes the ball, advances together all the way to the goal and scores as a team. With your continued support and encouragement from the stands, we hope to continue delivering steady growth. We sincerely appreciate your continued support.

Thank you very much. This concludes ITOCHU Day 2026.

Hello, everyone. I am President Ishii. Thank you very much for joining us today. I will explain our FY 2025 business results and FY 2026 management plan. First, for FY 2025 business results, please refer to Page 2 of the presentation materials, FY 2025 business results and FY 2026 management plan.

Consolidated net profit reached JPY 900.3 billion, while exceeding our initial plan of JPY 900 billion, marking a record high for the second consecutive years and achieving JPY 900 billion stage for the first time. Although FY 2025 started under highly uncertain and volatile conditions, including the impact of U.S. tariff policies and rising tensions between Japan and China, we steadily accumulated core profit by addressing each challenge arose, and successfully achieved our initial commitment driven by extraordinary gains from asset replacements, et cetera.

Next, core profit increased by JPY 11.5 billion year-on-year, reaching JPY 781.5 billion. As announced, there were negative factors in the first half of FY 2025 that we didn't expect in our initial plan, including delays in the coking coal projects, sluggish iron ore prices and underperformance in the finished pulp business.

However, prompt countermeasures and turnaround initiatives enabled us to recover to a normalized level in the second half. On the other hand, steady growth in our core group companies, including FamilyMart, DESCENTE, CTC, and North American power business, as well as in our medium-sized businesses in the non-resource sector contributed to accumulate core profit solidly.

By segment, 5 out of our 8 division companies, Textile, Machinery, Food, ICT & Financial business and the eighth achieved record high core profit, highlighting the strength of our stable non-resource businesses. Core operating cash flows reached a record-high JPY 940 billion, demonstrating our steadily strengthening earnings power.

As cash serves as the foundation for both growth investments and shareholder returns, we will continue to secure both cash and profit to achieve growth and enhance shareholder returns while maintaining a robust financial foundation. In FY 2025, we executed growth investments totaling JPY 838 billion on a gross basis, including projects already approved and scheduled for execution within FY 2026, the total exceeds JPY 1 trillion.

We continue to build up high-quality assets with strong growth potential. We also proactively implemented asset replacements, such as the sale of C. P. Pokphand, thereby securing solid cash inflows. Regarding shareholder returns, we increased the dividend per share to JPY 42, marking the 11 consecutive years of dividend increases and surpassing our initial plan.

Share buybacks were executed as planned, totaling JPY 170 billion, and the total payout ratio reached a record-high 52%. ROE remained at approximately 15%, sustaining a high level. Our group companies, strength for ITOCHU, also performed well, with the ratio of group companies reporting profits reaching a record high 93%.

In terms of profit contributions from group companies, we maintained the same high level as the previous year, which was also a record high, demonstrating the robustness of our group's earnings foundation. This concludes my explanation of the FY 2025 business results.

Next, I will explain FY 2026 management plan. Please refer to Page 3 of the presentation materials. For FY 2026, we are targeting consolidated net profit of JPY 950 billion, which would be a record high for the third consecutive years. As I mentioned earlier, we expect steady contributions to core profit from the turnaround of 2 businesses that were negative factors at the beginning of FY 2025, synergies from new investments such as Seven Bank and AND PHARMA and profit contributions from investments approved in FY 2025, and continued organic growth in major core group companies such as DESCENTE and CTC.

We will also actively pursue asset replacements for low-efficiency assets and businesses that have peaked out, realizing extraordinary gains and securing cash inflows. Our profit plan of JPY 950 billion includes a loss buffer of JPY 40 billion to address certain risk scenarios. Growth investments are planned to reach a record-high JPY 1.5 trillion. This includes ongoing annual CapEx of JPY 300 billion and approximately JPY 300 billion in projects already approved in FY 2025, such as Hitachi Construction Machinery, North American power business, ITOCHU-SHOKUHIN, and Sun Frontier Fudousan.

In addition to investments aimed at strengthening each business segment, we will also actively pursue investments to create new core businesses. Please refer to Page 5 of presentation materials for our approach to growth investment. Having entered the JPY 900 billion earnings stage, we will continue to pursue steady profit growth. In other words, raising the earnings level is essential.

The driving force for this earnings growth is, without question, proactive investments. As shown in the presentation materials, growth investments, excluding CapEx are planned at JPY 1.2 trillion for FY 2026, of which JPY 300 billion has already been approved. Accordingly, we are targeting over JPY 900 billion in new investments. We will focus on investments that will be able to raise earnings level. Key areas are indicated. We will pursue profit opportunities are shifting downstream raised in our management policy to strengthen and to expand the value chain.

Despite the potential for cross-industry collaboration in consumer-related sector, the reality is that each business currently operates in vertical silos. We believe that we will be able to create additional value through networking the current structure. This approach aims not only at our core group companies, but also the reorganization and efficiency improvement of food wholesalers, horizontal synergy expansions leveraging fintech with Seven Bank or real estate business with JR East and the creation of new businesses in generic and over-the-counter pharmaceuticals with AND PHARMA.

We will pursue these initiatives, including capital strategies to further enhance consumer convenience. To move to the next stage, we are also considering reallocating resources by reviewing and rebalancing our portfolio and reinvesting in resources and basic industry-related sectors. As a general trading company, we have supported Japan's basic industries and have developed expertise in areas such as metals, steel, mobility, power generation, basic chemicals, food materials and construction materials in our trading business.

We will take on new challenges in resource development, leveraging our past lessons. Please return to Page 3 of presentation materials. While accelerating growth investment, our policy remains to maintain the balance among growth investment, shareholder returns and control of interest-bearing debt. In addition, we will continue to manage our balance sheet with a focus on maintaining an A credit rating from rating agencies.

Although leverage will increase as growth investment expands, we plan to manage our net DER at around 0.6x. Regarding shareholder returns, we plan to raise the dividend for 12 consecutive years, targeting a record-high dividend per share of JPY 44 or higher. Share buybacks are also planned to exceed a record high JPY 300 billion or more. As a result, the total payout ratio is planned to reach a record high 64%.

Please refer to Page 15 of presentation materials for profit plans by business segment. All business segments are expected to achieve year-on-year profit growth. I will now provide a brief overview of each business segment. Textile: DESCENTE continues to perform well, driving growth through directly operating stores and strengthening manufacturing by new materials. The China business of DESCENTE is also performing favorably with strong demand among affluent consumers, even though overall consumer spending remains sluggish.

Furthermore, in the retail business alongside existing brands such as EDWIN, JOI’X, LEILIAN and CONVERSE, we will promote the introduction of new brands and collaboration with select shops to strengthen expansion of our business that stays ahead of trends. Our traditional manufacturing group companies are also recovering. Significant profit growth is expected as Textile.

Machinery, having established itself as a leading business segment, the Machinery is expected to deliver strong results in FY 2026 again. The increased shareholding ratio in Hitachi Construction Machinery to 33.4% is expected to drive further profit growth through the demand for resource developments around the world and construction of logistics warehouses and data centers. The North American power business continues to perform well by capturing robust electricity demand from data centers and generative AI, and we are strengthening local power plant operations.

AICHI CORPORATION, which was additionally acquired in FY 2026, is performing well. In addition, we will steadily build up our new investment in SWTS, a plant equipment maintenance company in Singapore, putting it on track for consistent earnings contribution. We are planning for significant profit growth again this fiscal year.

Metals and Minerals. The 2 coking coal projects have already reached a turnaround, and we will ensure that they make a solid contribution to profits. Also, we aim to expand businesses actively in cooperation with CM, the large-scale iron ore business in Brazil. Aluminum billet transactions in the UAE are expected to decrease in volume due to the impact of the Iran conflict until recovery.

Meanwhile, the low-carbon direct reduced iron, DRI project in the UAE is currently progressing as planned. We will continue to strengthen our competitive iron ore, nuclear power and uranium business. Energy and Chemicals, the Chemicals business remains strong with ITOCHU CHEMICAL FRONTIER, ITOCHU PLASTICS and others securing steady profits. High value-added products, including fine chemicals, pharmaceutical raw materials, semiconductor materials and reagents are performing well.

New investments by group companies are also under consideration. The Power Solutions business has been integrated into Energy division, and we are expanding medium to large-scale energy storage networks, particularly in collaboration with ITOCHU ENEX or by involving power and gas companies, municipalities and local governments.

Food, both quantitative and qualitative performance remained quite strong, especially in group companies generally maintaining steady growth. The restructuring of the confectionery wholesaler business and the conversion of ITOCHU-SHOKUHIN into a wholly owned subsidiary have strengthened our presence in the food distribution sector.

In addition, significant strengthening of profitability through synergies with NIPPON ACCESS is expected. Overseas business such as Dole and Blommer, which had been underperforming, are steadily implementing improvements, and our North American oil extraction business is expected to gain benefit from the rebound in fuel prices this fiscal year.

General Products & Realty, the Finnish pulp business, which had posted losses due to high log prices caused by the suspension of Russian timber imports and low pulp prices, has halted losses through a capital restructuring and is expected to show significant improvement. In addition to recovery of group companies such as North American Construction Materials business, ETEL, and DAIKEN, we expect to see profit contributions from the investment in a leading real estate fee developer in the U.S. and Japan.

We also anticipate benefits from the integration of ITOCHU Property Development and JR East's Real Estate business as well as from the new investment in Sun Frontier Fudousan, which is engaged in office revitalization projects. WECARS is also on track for rebuilding, working toward restoring its status as a provider of compulsory automobile liability insurance and certified vehicle inspection services.

ICT & Financial business, driven by robust digital demand, CTC is expected to achieve a record high profit for the fourth consecutive year as we advance our digital value chain strategy. Investments in PASCO, geospatial information services as well as collaboration with related companies engaged in consulting service are accelerating growth and expanding our capabilities. Such as HOKEN NO MADOGUCHI GROUP, which strengthened its store network and services through M&A with 4 peer companies last fiscal year.

Our leading core group companies are also expected to drive steady profit growth. The 8th, we aim to strengthen product appeal at FamilyMart and further develop exceptionally well-performing retail media business. And we will support profit generation and synergies from AND PHARMA and Seven Bank. This business segment is responsible for creating value by deepening synergies between investees and group companies and will lead new investments by leveraging its cross-organizational functions across the entire company.

That concludes my presentation on the FY 2025 business results and the FY 2026 management plan. In summary, for FY 2026, we are positioning this fiscal year as a gear shift or gear up to achieve a step change in earnings by accelerating growth investments. Our management policy of "No growth without investments" is reflected in the record high JPY 1.5 trillion growth investment plan, aiming to shift into a higher gear and accelerate growth through proactive investments.

We are also advancing comprehensive and multilayered initiatives, including strategic alliances and real estate business with JR East and Capital and business alliances with Seven Bank. It is important to note that unlike allocation-based investments reliant on market-driven earnings, realizing business synergies through hands-on management, one of ITOCHU's core styles requires time.

This approach involves dispatching personnel to work closely on-site, collaborating directly to enhance corporate value. While it takes time, the synergies we build will serve as long-lasting stable sources of profit over the long term. With the start of the new fiscal year, as in previous years, Chairman and CEO, Okafuji, and I held meetings with the managements of 37 core group companies.

18 of these group companies achieved record high profits in FY 2025 and 30 companies reported forecast year-on-year profit increases for FY 2026. These reports have further strengthened our confidence in the earning power of our hands-on group companies. Although there are still uncertainties such as the situation in the Middle East, we have incorporated sufficient loss buffers into our FY 2026 plan, and we believe the JPY 950 billion target is fully achievable.

Finally, in FY 2026, we expect market conditions to remain volatile in the near term, driven by the situation in the Middle East and subsequent fluctuations in resource prices. While the impact of these resource price changes on business results will vary by company, ITOCHU will continue to steadily implement management measures and growth investments with a long-term perspective, adapting to changing circumstances like water.

Even as we look ahead to the new world that lies beyond, we will continue to demonstrate ITOCHU's full strengths and steadily pioneer business fields where we can achieve robust growth. We are committed to shifting gears now and showing that ITOCHU is ready to reach the next stage of earnings.

I conclude my explanation. Thank you for your attention.

I am CFO, Naka. I would like to provide supplementary explanation on 2 points: our approach to plan formulation and visibility in achieving the plan. First, regarding our approach to plan formulation. As basic policy on Page 3 of the presentation materials, the KPIs we prioritize most are ROE and EPS. Our fundamental policy to pursue sustainable enhancement of corporate value by driving earnings growth while maintaining efficiency remains unchanged.

There is also no change in our cash allocation policy, which continuously maintains a solid financial foundation by balancing 3 factors: growth investments, shareholder returns and control of interest-bearing debt. However, we recognize it is important to flexibly manage this balance within the boundaries of financial discipline in response to changes in the business environment and management conditions.

While we continue to deliver record high profits, we are fully aware that the market perceives the degree of our profit growth is insufficient. Accordingly, under our management policy of no growth without investments, we will place even greater emphasis on growth investments in FY 2026. We have built up a solid pipeline with highly feasible projects that will contribute to the creation of new core businesses, and we expect to achieve growth investments totaling approximately JPY 1.5 trillion in FY 2026.

Please note that the JPY 1.5 trillion is not a preset allocation. At the same time, we will further enhance shareholder returns with share buybacks planned JPY 300 billion or more. This is intended to enhance EPS and should be regarded as a reflection of management's strong commitment to maintaining high ROE. However, our fundamental approach is that high ROE should be achieved through the increasing of consolidated net profit, the numerator rather than by adjusting total shareholders' equity, the denominator through share buybacks.

For FY 2026, our plan is based on the concept of leveraging debt to achieve profit growth through growth investment while maintaining highly efficient management. Next, regarding the visibility in achieving the plan. Please refer to Page 14 of the presentation materials. Some may have the impression that core profit growth was somewhat sluggish in FY 2025. For FY 2026, it is essential that we demonstrate solid growth in core profit.

Starting from FY 2025's core profit of JPY 781.5 billion, we have adjusted for current assumptions on resource prices, Forex, and the impact of the Middle East situation. We expect an increase of JPY 25 billion from the turnaround of previously underperforming businesses and an additional JPY 65 billion from new investments. In addition to JPY 15 billion profit increase from investments executed in FY 2025, approximately half of the JPY 50 billion profit increase anticipated from investments to be executed in FY 2026.

Approximately half has already been secured through executed investments such as the additional acquisition of Hitachi Construction Machinery. The conversion of ITOCHU-SHOKUHIN into a wholly-owned subsidiary, the additional acquisition of North American power business and investment in Sun Frontier Fudousan.

In addition, for the remaining investments of approximately JPY 900 billion scheduled for execution, several projects are already at the final stage of negotiations or are being negotiated under basic agreement, and we expect these investments to be realized successively, contributing to profit in the second half of FY 2026. We also plan to steadily accumulate core profits in each business segment. Major items for which the amounts are disclosed in the materials include DESCENTE, plus JPY 5.8 billion; CTC, plus JPY 4.4 billion; North American Construction Materials business, Dole, Aerospace business, NIPPON ACCESS and ETEL with a total profit increase of over JPY 20 billion expected from these 7 businesses.

In addition, although the amounts are not disclosed, we anticipate higher profit contributions from businesses such as CM, primarily due to significant improvements in Forex valuation losses and Marubeni-Itochu Steel and Tokyo Century. We also expect steady growth in our medium-sized companies, an area of strength for ITOCHU.

As for extraordinary gains, several projects are already nearing closing, and we expect to realize more than half of the JPY 90 billion incorporated in the plan within the first quarter. Furthermore, we have incorporated a loss buffer of approximately JPY 40 billion to address risk scenarios such as prolonged geopolitical instability in the Middle East and its indirect effects.

Based on these considerations, we are confident in the high certainty of achieving our profit plan. For FY 2026, we remain fully committed to delivering another record-high consolidated net profit of JPY 950 billion. This concludes my explanation.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning, everyone. I am President Ishii. Thank you very much for joining us today. I will explain 3 highlights from our first half business results announcement, solid earnings progress, dividend increase and share split. Please refer to Page 2 of the FY 2025 first half business results summary presentation materials released on November 5.

The first point is the progress of financial results for FY 2025. Consolidated net profit for the first half reached JPY 500.3 billion, an increase of JPY 61.8 billion year-on-year, reaching a record high level. While extraordinary gains from asset replacements contributed, our strong performance was primarily driven by the robust results in non-resource sector, which is one of our key strengths. Progress toward the full year forecast of JPY 900 billion has reached 56%, exceeding our initial expectations and has been demonstrating steadily.

Regarding the full year consolidated net profit forecast, there is no change from the initial announcement. It remains at JPY 900 billion. However, we have revised our full year core profit forecast to a range from JPY 800 billion to JPY 820 billion. At the beginning of the fiscal year, our core profit plan was set as a broad range from JPY 770 billion to JPY 850 billion. However, given the steady progress in the first half, we have raised upward the lower limit of this range.

Regarding the forecast by segment, we have revised forecast downward for Metals & Minerals due to difficult circumstances in the first half. On the other hand, we have revised the forecast upward for Textile, Food, ICT & Financial Business, The 8th and Others. All these upwardly revised segments belong to non-resource sector, particularly in consumer-related businesses, which are among our key strengths. This demonstrates that profitability in these businesses continues to steadily increase with core profit accumulating solidly.

In addition, while the outlook for reciprocal tariffs was uncertain at the beginning of the fiscal year, the situation settled at a manageable level in September, and we expect a recovery in transactions in the second half. One negative factor is the ongoing price declines caused by dumping exports from China, which has excess production capacity. The extent to which this will continue requires close monitoring.

The second point is shareholder returns. At the beginning of the fiscal year, while we recognized market expectations for dividend increase, our initial plan for dividend per share was JPY 200 as same as the previous fiscal year. This decision reflected the highly uncertain business environment at the time, which included undetermined U.S. tariff policies and more uncertainties than usual. However, as I mentioned earlier, as the outlook regarding tariffs gradually became clearer and overall uncertainty began to subside, our first half results also showed steady progress. With solid accumulation of core profit, particularly in non-resource sectors, we decided to increase the dividend per share by JPY 10, resulting in JPY 210 for the 11 consecutive years of dividend increases with confidence in our profit growth.

The third point is share split. We plan to conduct a share split of our common shares at a ratio of 1:5 with the effective date set for January 1, 2026. While a share split does not inherently enhance corporate value, we have carefully considered this matter over time. As Japan government promotes Japan as a leading asset management center, the Tokyo Stock Exchange is recommending share splits to lower investment units and thereby broaden the investor base, including individual investors. Respecting this recommendation, we decided to implement a 5-for-1 share split with the hope that it will encourage more people to become shareholders and in turn, further support the increasing of our corporate value. Through this share split, we strive to embody the spirit of Sampo-yoshi. Good for shareholders, good for ITOCHU, good for society, in the stock market as well. We hope that even more people will become fans of ITOCHU as a result.

That concludes with my explanation of the highlights.

Next, I will explain the other 2 points, our robust core profit base and the status of turnarounds in businesses facing challenges. Regarding core profit for the first half, please refer to the slide currently being displayed. In resource sector, persistently low prices have continued to weigh on results as has been the case for other companies. This has been especially notable in coking coal, where core profit declined more than anticipated. Additionally, the ongoing delay in the production recovery of our Australian coking coal project since the end of last year has placed further pressure on earnings.

Meanwhile, in non-resource sector, the impact of the Trump administration's tariff policies, whose outcome remained uncertain until September, led to export adjustments, especially in vehicles and machinery destined for the United States, resulting in continued instability. Additionally, our pulp business in Finland also experienced sluggish performance.

Regarding situations of these 2 turnarounds and businesses facing challenges, I will explain later. Despite these circumstances, our domestic reliable group companies, one of ITOCHU's key strengths, made a significant contribution to the accumulation of core profit during the first half. As shown in the slide, core profits in non-resource sector have continued to accumulate steadily, reaching a record high in the first half following strong performance in the first quarter. For core profits in non-resource sector, the proportion of our domestic group companies generating profits of JPY 2 billion or more has been increasing and now stands at approximately 60% in addition to domestic core group companies and consumer-related businesses, such as DESCENTE, CTC and FamilyMart. Midsized group companies with profit levels between JPY 2 billion and JPY 10 billion are also steadily strengthening their earnings power year after year.

Next, please refer to Page 17. Over the past few weeks, CEO, Chairman, Okafuji and I have had review meetings with the presidents of approximately 40 group companies and heard strong reassuring comments from each of them who have thoroughly embraced ITOCHU's unique management approach, such as hands-on management, the principle of earn, cut and prevent and commitment-based management regarding their recent business performance and forecast for the second half. Even amidst global uncertainty at the beginning of fiscal year, our group companies have recorded 87.1%, near record for ratio of group companies reporting profits. And it is noteworthy that around 1/3 of these companies achieved record high profits in the first half.

I believe these results show the soundness and resilience of group companies. The company operates under the principles of frontline capabilities and hands-on management, continuously nurturing and refining our group companies. It is important that those who have learned management philosophy from CEO, Chairman, Okafuji and implemented management approach are presidents for many group companies and that they can communicate appropriately, understand management advice promptly and take actions quickly. Especially, our steady growth foundation consists of the group companies highlighted in light blue with profits between JPY 2 billion and JPY 10 billion, and we are willing to further enhance these group companies.

We believe that proactive enhancing businesses are unlikely to fail, precisely because we understand the industry and the business well. It is a highly feasible strategy that will support the company's sustainable organic growth going forward. Then we believe it is crucial to foster a stronger sense of unity and closer ties between headquarters in these group companies. This is achieved through unannounced site visit by CEO, Chairman and me as well as through exchange meetings with employees of group companies, seminars and networking events for top management of group companies. We will achieve reliable business strengthening and growth through the sharing of strategies, the allocation of necessary resources from headquarters and the steady execution of key growth initiatives such as M&A and business reforms.

Next, I will explain the status of turnarounds in businesses facing challenges. First, coking coal project in Australia. In March, the project transitioned to the first panel of the new mining site. Unfortunately, in April, production stalled after encountering complex fault and resulted in a 6-month delay in production. After that, the project finally managed to pass through that fault in September and have recovered production to normal levels, continuing shipments. The project plans to commence mining in the next second panel around mid-December, and the operation is expected to stabilize thereafter.

Next, let me explain the IFL, pulp business in Finland. Metsä Fibre sells pulp and paper products made from domestic log to Europe and China. However, the prolonged Russia-Ukraine situation led to the suspension of Russian log imports, causing supply and demand to rapidly tighten. In addition, driven by falling pulp prices and declining sales volumes due to sluggish paper demand in China, our largest market where the domestic economy and consumption remains sluggish, the first half yielded extremely tough results.

The combination of soaring log costs and sluggish sales led to production adjustments, causing production costs to surge sharply and developing into a structural problem. Locally, persistent efforts are being made to curb log prices, involving the Finnish government and outreach to log producers. In addition to implementing fundamental cost-cutting measures at Metsa Fibre itself, we are continuing negotiations to minimize future impacts, including diversifying sales channels and reviewing capital policies. We will promptly take these steps in order to minimize negative impact.

This concludes with the overview of our financial results for first half and the forecast for the full year. Our earnings are not derived from large-scale resource extraction, but rather from accumulating profits through each individual transaction and business, a collection of small profits. By combining hands-on management that works alongside Frontline and ITOCHU's distinctive management principle of earn, cut and prevent, we believe we can let profits of group companies solid and drive further growth. Such as DESCENTE and CTC, core profits have been expanded based on reliably predictable profits through the conversion from general investments to associated companies or from associated companies to subsidiaries.

Not every investment or business is guaranteed to succeed. However, by working together at the front line, we can gain insight into the people and industries involved. When anomalies are detected, we can correspond to solve them involving related parties at the earliest stage when the damage is still minimal. This is our hands-on management approach, and it is the feed of our frontline capability. We may encounter turnaround projects in the future, but we will resolve them without fail. We are determined to firmly achieve our committed full year forecast of JPY 900 billion and to steadily realize next phase of upward growth in ITOCHU WA.

That is all for me. Thank you for your attention.

Hello, everyone. My name is Naka, and I am the CXO. In the first part, I would like to explain the background of the establishment of the CXO role as well as its function in management. I hope this will help you to better understand ITOCHU's management policies and organizational structure.

The CXO or Chief Transformation Officer is a title that you may not often hear at other companies. This position was newly established in FY 2024. While the role is responsible for transforming our business scope and business model, I understand it may be difficult to envision this position. Although the CXO has various responsibilities, its most important and original purpose is the integration of management strategy and digital technologies.

Looking back, as a company, we recognize the necessity and importance of integrating management strategy and digital technologies, and began internal discussions in FY 2017. Some of you may remember that in the medium-term management plan announced in FY 2018, we disclosed the policy of reinvented business. However, this was before METI published the DX report, and before the term DX became widely [ TMX ] became widely [ like ]. More importantly, the plan itself was somewhat abstract and lacked concrete measures. We received criticism from analysts, the market did not accept it and the stock price declined. This is a bitter memory.

Nonetheless, we began taking internal actions from FY 2018 onward. First, under the Corporate Planning and Administration division, we formed the Business Innovation Unit, gathering elite members from the ICT and Financial Business division company and CTC. We then formulated policies, specific measures and time lines for the utilization of digital technologies. We intentionally placed this unit under the Corporate Planning and Administration division instead of the IT and Digital Strategy division because it needed to be closely aligned with management policies and strategy.

The following year, when Mr. Noda, former CSO and current President of ICT and Financial Business Division company was appointed CDO/CIO, we moved the Business Innovation Unit under the CDO/CIO and began in earnest with data visualization, analysis and utilization. As you can see from the fact that after Mr. Noda, former President, Mr. Suzuki concurrently served as CDO/CIO and later, I concurrently served as GM of Corporate Planning and Administration division and CSO, we have consistently advanced the integration of management strategy and digital technologies.

At most companies, corporate planning and IT divisions are separated and systems have been regarded as an indispensable platform for corporate operations classified as system expenses or necessary costs. Today, however, we view digital technologies and IT systems not as expenses, but as investments. I believe this is a concept similar to human capital, which has been widely discussed in recent years. In fact, we had a benchmark company when advancing these initiatives, Fast Retailing Co., Ltd., which operates UNIQLO.

The company has long pursued a thorough integration of business operations and IT systems, establishing departments such as Business Operating System division. And Mr. Yanai, Chairman, President and CEO; Fast Retailing Co., Ltd. refers to the IT function as the Digital Business Transformation Services division. They have embedded digital technologies into all operating workflows and generated apparent results. While our industries and business models differ, and we are not simply copying them, we were greatly inspired at a conceptual level.

Then, generative AI emerged in 2023, dramatically changing circumstances and accelerating the pace of change. Recognizing that as the ITOCHU Group including group companies, we must respond to these technological innovations or risk losing competitiveness. We determined it was necessary to accelerate transformation through the integration of management strategy and digital technologies with a dedicated structure. Thus, in FY 2024, we established the CXO role. Until then, we had the CDO/CIO roles, but the responsibility is not merely to oversee IT systems but rather to evolve the business model by integrating them with management strategy. I believe I was appointed to my extensive experience in corporate planning.

As for what we have done since 2018 in pursuing integration of management strategy and digital technologies, what effects and outcomes we have achieved, which stage we are currently at and what we will do -- aim to do going forward, these will be explained in detail in the next part by Mr. Urakami, General Manager of the IT and Digital Strategy division. So I will admit them here.

Next, I will explain the overall roles for which the CXO is responsible. Under my purview are the IT and Digital Strategy division, the Research and Business Development division and the in-house think-tank ITOCHU Research Institute Inc., through which I oversee information and IT systems. As a brief aside, among our corporate value enhancement measures in the management policy, the brand-new deal announced in April 2024, we also listed enhancement of corporate brand value. Increasing media appearances, TV, newspapers, magazines of the economists at the ITOCHU Research Institute is one of those efforts. And as you can see on the screen, it has increased dramatically over the past 2 years.

In addition, the CXO concurrently serves as General Manager of the Group CEO office, and I serve as Chair of 2 internal committees: the Investment Consultative Committee and the Group Finance Review Committee. The Group CEO office is an organization directly under the Chairman and CEO established in 2023 to further strengthen consolidated management. I have served as General Manager since 2023.

In consolidated management, group companies are extremely important. Group company presidents are often big name executives who have achieved strong results at ITOCHU. They are frequently older than the division company presidents and sometimes former superiors. This can create hesitation on the part of the division company presidents and make it difficult for group company presidents to consult with their former subordinates. To prevent such situations, the Chairman and CEO provides direct guidance and oversight, while under his direction, the Group CEO office provides support to both the division companies and the group companies.

Traditionally, our organizational structure was strongly vertical by division company, but this has led to smoother coordination of interests among operating companies, improved fairness in compensation and the exertion of greater overall strength. I feel it is functioning extremely well. As for the coordination of interest I mentioned, not much is needed these days and past cases would be too vivid to recount here.

Let me introduce 2 measures implemented by the Group CEO office. As I mentioned, improving fairness and compensation, our primary aim was to further enhance corporate value at individual companies by providing stronger incentives linked to enhancement of profitability. We revised the remuneration system for presidents of non-listed subsidiaries in Japan. Under the previous system, a certain portion was subject to qualitative evaluation. Criteria were unclear. And even with similar levels of profit contribution, remuneration levels differed depending on the division company. We address this by classifying companies by profit scale under a common company-wide standard, eliminating qualitative evaluation from remuneration and using only quantitative measures, budget achievement rate and core profit improvement rate since appointment as President. As a result, we have ensured fairness and equality and treatment, established a clear system where results are rewarded, and believe this is linked to boosting motivation across the group.

As I mentioned, improving fairness and compensation, our primary aim was to further enhance corporate value at individual companies by providing stronger incentives linked to enhancement of profitability. We revised the remuneration system for presidents of non-listed subsidiaries in Japan. Under the previous system, a certain portion was subject to qualitative evaluation. Criteria were unclear. And even with similar levels of profit contribution, remuneration levels differed depending on the division company. We address this by classifying companies by profit scale under a common company-wide standard, eliminating qualitative evaluation from remuneration and using only quantitative measures, budget achievement rate and core profit improvement rate since appointment as President. As a result, we have ensured fairness and equality and treatment, established a clear system where results are rewarded, and believe this is linked to boosting motivation across the group.

Next, let me explain the internal committees for which I serve as Chair. I have served as Chair since my appointment as CXO in FY 2024. My predecessor, CFO, Mr. Hachimura, served as Chair for 6 years. During that period, I also participated as a committee member, so I essentially took over. I continue to collaborate closely with management centered on the CFO, who also participates as a member, thoroughly assessing and selecting projects from a wide-range pipeline.

Under the policy, no growth without investments, we have shifted toward proactive investment, but we have not eased investment discipline. On the contrary, we partially revised investment standards this fiscal year and tightened them. As stated in our integrated report, the Investment Consultative Committee focuses on 2 key points when making investment decisions. The first point is whether the investment project can truly contribute to the returns and growth required for the company as a whole and whether it can broaden our business base beyond simply exceeding investment criteria. Second, the further evolvement of investment structuring. In other words, whether rights and mechanisms for creating synergies and exerting influence have been embedded in contractual terms. We are careful never to ease our negative checks to ensure control while consciously raising the sensitivity of our positive checks to structure for even better terms.

This fiscal year, decisions on investment projects had a slow start in April and May due to a wait-and-see stance regarding the impact of the Trump tariffs. But applications have increased since summer. The pipeline under consideration is plentiful, and we believe we can continue to accumulate beneficial investments that enhance corporate value this year as well.

For your reference, let me outline the internal approval process for investment projects. First, following deliberations at the project review meeting conducted by administrative organizations within the division company, the project receives presidential approval at the DMC, Division Company Management Committee. Projects of over JPY 5 billion undergo screening by the Investment Consultative Committee and then receive approval at the HMC, Headquarters Management Committee, i.e., the management meeting. Investment projects of JPY 20 billion or more additionally require approval by the Board of Directors. While we do not claim to know other trading companies' approval thresholds or monetary thresholds for submission to the management meeting, and the Board of Directors are set relatively low, which I believe demonstrates that senior management is deeply involved in decision-making.

As Chair of the Investment Consultative Committee for projects of over JPY 5 billion, I examine materials and the content of deliberations from an early stage at the division company's project review meeting to fully understand the project. If there are issues or concerns, I provide comments to the applying department and the President before the DMC.

Typically, roughly 2 to 3 projects per year are sent back and not permitted to be submitted to the Investment Consultative Committee even if they have been approved at the DMC. Among those that are submitted to the Investment Consultative Committee after DMC approval, a further 2 to 3 projects per year are sent back to the division company.

For your reference, let me outline the internal approval process for investment projects. First, following deliberations at the project review meeting conducted by administrative organizations within the division company, the project receives presidential approval at the DMC, Division Company Management Committee. Projects of over JPY 5 billion undergo screening by the Investment Consultative Committee and then receive approval at the HMC, Headquarters Management Committee, i.e., the management meeting. Investment projects of JPY 20 billion or more additionally require approval by the Board of Directors. While we do not claim to know other trading companies' approval thresholds or monetary thresholds for submission to the management meeting, and the Board of Directors are set relatively low, which I believe demonstrates that senior management is deeply involved in decision-making.

As Chair of the Investment Consultative Committee for projects of over JPY 5 billion, I examine materials and the content of deliberations from an early stage at the division company's project review meeting to fully understand the project. If there are issues or concerns, I provide comments to the applying department and the President before the DMC.

Typically, roughly 2 to 3 projects per year are sent back and not permitted to be submitted to the Investment Consultative Committee even if they have been approved at the DMC. Among those that are submitted to the Investment Consultative Committee after DMC approval, a further 2 to 3 projects per year are sent back to the division company.

As I have outlined, the CXO's role is to drive the integration of management strategy and digital technologies, provide support for group companies through the Group CEO office and promote growth investments through rigorous assessment and structuring of projects, while further deepening and expanding horizontal deployment and collaboration. In particular, we must enhance corporate value by responding group-wide to disruptive changes such as digital technologies and AI and by transforming and evolving our business model.

The PER, price-to-earnings ratio, of the general trading company sector has long trended at low levels and in fact, remains below the market average. As you are aware, the Nikkei average PER has now exceeded 18x, whereas our company currently remains at 13x. In recent years, however, many companies have seen their market valuations re-rated by leveraging digital technologies and AI as growth drivers. Hitachi, Ltd. and ASICS Corporation are prime examples. Their current peers are 29.

We are one of the 5 major trading companies to exceed a PBR of 2.0x. We understand that this achievement reflects the steady execution of our long-standing, high-efficiency management and our historically consistent high ROE, which are supported by quantitative results. We believe these factors have been duly recognized and valued by investors.

So what is required to further increase corporate value from here? Needless to say, stock prices calculated by multiplying EPS, earnings per share, by PER, price-to-earnings ratio. A higher PER is achieved through cultivating growth expectations. But above all, it is essential that we first demonstrate steady, visible growth. In addition to growth investments and the continued enhancement of existing businesses, we must significantly evolve our management foundation centered on consumer-related domains by responding to disruptive technologies such as digital technologies and AI. Leveraging the strengthened foundation, we must also accelerate horizontal deployment and collaboration to demonstrate further growth.

By steadily building a track record of business model transformation and evolution that supports growth, we aim to foster market expectations for growth. Across our group, there remain many growth opportunities that have yet to surface. By accelerating both our response to disruptive changes such as digital technologies and AI and our horizontal deployment and collaboration, we will find and connect these opportunities aiming for further growth. We will execute initiatives that realize our group's conglomerate premium and contribute to further improvement in PER. We would be grateful for your continued support and high expectations.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]