My name is Negi. This slide shows you the fourth quarter results and you can see that the net sales has increased by 3% and operating income has increased by 1% and in both cases this is below our expectations and our forecast.

I am sorry to say. If you go to the bottom you can see the pre-gap.

We have the increase in net sales by 4% this is because of the FX impact and if we exclude the foreign exchange impact, it's increased by 6%. Why was it lower than our forecast?

I would like to use these two Slides to explain about it. In the up until the third quarter if you look on the left-hand side, you can see that everything went according to our forecast but from the fourth quarter, normally in regard to the gap here, it should have been larger, but we have seen that from the third quarter to the fourth quarter's numbers are flat and so therefore when we made to forecast, we anticipated that there would be growth, but there were some changes that took place in this area.

And meanwhile in regard to the expenses this has gone down. So we have been lower in our net sales forecast but then the expenses went according to forecast and the back ground for this is because when we look at our Q4 forecast it was a bit optimistic.

The reason why this came to be the case is because in the fourth quarter of FY 2017 there used to be a lot of big deals then, we are quite strong then. And so when we made the plans for FY 2018, we thought that in the fourth quarter we will see a similar trend and in regard to big deals we did not get as many as we had expected.

And so therefore in regard to our estimates for large deals, we were a bit too optimistic and in regard where this occurred the most this is comparison on a year-over-year basis but when we look at Q4 in Europe, especially UK, and also in countries like Brazil, we do not have such trends observed. So that compared to the previous year it was below our expectations.

Meanwhile, when it comes to the expenses for each product, there is the user protection, which is the conventional malware products and for the midmarket compared to the previous fiscal year, we were not doing well. And Eva will be talking about this later on because of the concentration in big deals there were attractive tipping point related deals, but the sales focus was not in the midmarket, but rather in the bigger deals and so therefore, we were below our forecast for the midmarket and then expenses and there is some accounting processing here, but when it comes to the deferred revenues depending on when the payment is recognized and just changes the situation of deferred revenues and if things make it within the deadline then we see changes taking place in the deferred revenue but profitability after the deferrals was below our forecast.

And next in regard to our expenses for long-term investments the net sales could not be meeting our forecast, but we do anticipate that this will come up. It's not because there were no deals in the pipeline and Eva’s presentation will touch upon this, but when it comes to the changes in the IT infrastructure there are new opportunities that are emerging.

So we are making advanced investments. We have continued with investments and so unfortunately for the second half of FY 2018 this has impacted our profits.

So it's not all low lights, there are highlights for the fourth quarter. First of all there is the hybrid infrastructure protection for the network and the data centers security, a double digit growth has continued and also I forgot to explain about this but when it comes to the net income we have seen an increase of 41% in the first quarter and if we look at the annual profitability calculations this falls into the fourth quarter.

And so from the first quarter in the United States we have seen taxes go down and so not everything may have occurred in the fourth quarter, but we were not clear about the calculations and so we decided to do the adjustment in the fourth quarter and in FY 2017 because of the decrease in personal income tax rate. We had seen higher tax rates, but this does not take place in 2018 and so therefore in the world of taxation were seen some profits.

And in operating income in regard to what the situation of the company is we are looking at things from operating income perspective and so we're using that as the basis for calculation of the dividends and when net income increases, then we have the dividends increased and we have increased dividends so that we are now going to have the highest ever dividend payout and this is in the dollar denominated basis. If we look at the sales by region, net sales by region, we see that in its minus 17% in North America and plus 13% in Europe, but there is tipping, rather plus 16% and in tipping point we have move forward with North America and in 2018.

We have also the allocation to the different regions and the impact was greatest in Europe and fourth quarter it seems like we’re down in the North America market, but this is because the tipping point sales are not included here. Whereas seen in Europe we're having a plus effect.

If we make the adjustments both are flat, North America's revenues are not going down and the Europe has not see a greater increase. But when we look at fourth quarter then we’re seeing that the two regions are flat in this sense.

And this is the FX impact excluded and this was anticipated but we should see efforts to increase this and sales by segment is shown here and for the consumers in Japan. We have seen revenues down in all other areas besides Japan.

But in the enterprise market we are seeing growth. In North America and Europe there is the tipping point sales recognition that impact things.

And if we look at this by region then we see that the sales are increasing. Next we have the hybrid infrastructure protection, and it's a 11% increase in Yen denominated basis.

And on a last year currency basis its 14% increase. There is quite a lot of fluctuation here.

This is because of the impact of large deals and when we look at this kind of growth rate we thought that this would be the case for this fiscal year as well. There is growth but the growth is not as high as FY 2017.

And so therefore this shows some of the optimism of our forecast. There are the pre-gap sales, there is nothing to note to make you and in this area the growth rates are high.

And this includes Middle East and it's getting closer and closer to the levels of Europe. This is pre GAAP sales and enterprise sales, consumer are 5% and enterprise 6% growth.

In the case of Japan mobile channels sales, growing once again. One thing to note for one year comparison for mobile rebate is not excluded.

So accounting wise if sales is happening in mobile channel for pre GAAP it has to be deducted from the growth but in this case it’s not deducted. So this is something that you need to be careful when you compare against the previous year.

So if all the rebate is excluded the growth rate is more like 2% or 3%. This is balance of differed revenue.

Looking at the cost what is increasing? Yellow, salary and benefits.

This tends to increase in the fourth quarter and the growth rate for each quarter is not that high compared to the previous fiscal year and another thing that’s included here is AI contest. We explain this in the previous quarter.

AI contest for engineers this expense is included and in Japan the HR system has been changed as well. The pension balance this is about several maybe JPY300 million or JPY400 million it's also included.

So when you make the comparison please note that there are some special items. Sales and marketing is also increasing because of big events, these are event expenses and the dark blue this is administration, administration to the cost.

The biggest growth in this area is cloud back end fast type sales is on the increase recently and in relation to that there are some backend cost which is included in administration. It's not that the headcount is increase in accounting AWS and Azure or cloud related services have seen an increasing cost and this is profit, cash flow there is nothing to comment.

Moving on to headcount, headcount has increased and as Eva will mention later we need to acquire headcount because we see needs for new services on various fronts. So we are trying to hire people in order to prepare ourselves for the new stage.

Moving on to the full year numbers, this is the summary of the all four quarters so I would like to skip this slide and go to the dividend. Payout ratio is the same 70% of consolidated net income and 2 point on financial impact is added back ¥163 per share and this is a 9% increase because of the tax impact I mentioned before, and of course this to be approved by the shareholders but this is a proposal.

Today we made announcement about share buyback in terms of absolute amount while the green is a dividend and this year will be the highest so far. So with the share buyback we don't know exactly how it will end but about ¥6 billion will be added on top of the spot.

That's what we expect. Thinking to the shareholder return, this year we will be able to be return a lot of cash to our shareholders.

FY19 forecast, Japan and Europe 5% increase in sales, flat in North America and 15% increase in Asia. This is what we expect, why flat in North America?

This is complicated explanation so maybe I should ask Avarasan to explain the accounting method. In FY19 we're not expecting anything special to happen, but since we have been explaining since FY18 pre-GAAP for tipping point, we are beginning a new allocation method, so up until the end of FY17, we were basically accounting all the deferred revenue in the US and FY18 as Negi has mentioned it is changed and pre-GAAP for US the numbers appears to be lower because of this and FY19 the same situation will continue, that's all this is.

So if there is a multiyear account contract besides the deferred revenue installment in FY18 it was still there in US but this impact will shrink in FY19. So we set something up until the end of FY17, which existed in each region.

But FY18 and 19 this impact will weaken and in terms of a deferred revenue, there still some remaining impact in North America, so pre-GAAP doesn't look very bad, so FY18, FY19, pre-GAAP basis you can make that comparison but in terms of net sales we still have some residue in FY19 and FY18 and FY19 this impact will weaken but in terms of net sales the situation will still remain the same, I’m sorry about this very complicated submission. For pre GAAP FY18, 19 back that it's possible but in terms of net sales North America situation will be same as FY 18.

If this is too completed I would like to explain this separately. Thank you.

Head count has increase headcount related expenses is expected to increased in FY19 and the assumptions for exchange rate is shown on the Slide, 5% increase in sales 168.6 billion and operating income expected to grow by 6%. Without the exchange impact we expect sales to grow by 6%.

We regret that did not performance well in FY18 but in FY19 we will do our best to achieve these numbers to increase sales and profit. Thank you.

Today I would like to talk about art of cyber security. I think people will say we will wonder why is cyber security can become art that I think you all know that book called Art of War, actually cyber security is war against the hackers, the bad guys.

So this year starting we talk about Art of Cyber Security, how to we enable our customer to be Art Master of Art of Cyber Security but before I talk about their strategy need to reflect on Trend Micro strategy. In the past 10 years actually Trend Micro major strategic direction has two very important transformation that we undertake.

First one is we need to transform Trend Micro brand name from a very cool virus buster company to mature profession cyber security company and therefore in the last 10 year, we are focusing on growing our commercial business not by diminishing that consumer business but we need to grow faster on the commercial business. So from 2012 to 2018 our commercial business grow 71%.

But also not only just on the commercial business, we need to also expand our product portfolio in the commercial banking, which is transforming from a top user productivity protection company to infrastructure Security Company. So we expand our business in infrastructure security which includes server security, cloud security and network security.

Those are the major spending area of the enterprise commercial business and you can see that we successfully grow that business expand that part of business much faster than our traditional end point security product. So in 2018, we continue this two major direction, grow our commercial business, focusing on the cyber infrastructure security growth and we starting to embrace this concept of now that we have a complete network.

We embrace the concept of connected threat defense. Our strategy in sales is if we can lend in one product than later this new customer we can up sell then the other products that are our major expanding strategy.

So 2018 we achieved 2800 new customer in hybrid cloud security and we added 20 1100 new customers for network defense. Network defense is mainly very large enterprise like tipping point, tip discovery these are very large enterprise customers.

And in user protection we add more than 10,000 customers and this customers is not small customer we did not include a worry free or cloud edge type of small business, these are major miss size above customers. So the achievement we have by adding or this new customer each of those new customer we believe is our future expanding connected threat defense, we can offer then more solution.

Also at the same time 2018, we come out with a lot of new product, new technology for instance in hybrid cloud security we come out with a smart check which is container security is a very important. If you know that last week AWS just issue a serious warning about their container vulnerability and trend micro smart check and our deep security product was Apple to protect against their vulnerability in container.

So that’s deep security part, the cloud security. For this discovery and tipping point we come out with network analytic which is new tool for the people to do forensic analysis for the breach instance and for our largest space the user protection part, we come out with eight pack one, which is the virus foster corporate addition new version.

This version is the first one that include endpoint detection and endpoint protection in one package but I must say to bet that this product was launched in November last year and because of the customers waiting for his, because of the sales it was waiting for this new version and that’s product of reason that Mahendra mentioned about our miss sized and cup product selling wasn’t that way in Q4 last year part of that I believe is because our sales force and our channel and our customers was waiting for this new release but it was end of November so not fast enough to produce the revenue for Q4. The other one very important one, is the new service that we starting to provide which is called manage detection and response is a service that Trend Micro will help our customers manage their security product and manage their security event because we see a lot of customers the security expertise to perform this.

So with this new product, new services and new customers' acquisition obviously in 2018, we need to make a lot of investment. One of them for instance we need to invest in our backend system expanding our smart protection network in the cloud, we now move it all to AWS for scalability, and 2018 one year we were able to handle more than 2 trillion queries and blogs 40 billion malware threats for our customer.

That infrastructure also including adding new technology, new product, for instance, we acquired TELUS Lab for that exploring technology. And we trained, like Mahendra mentioned about this AI contest, we need to train all are our engineer workforce to understand over the new technology and able to use them in the best way for presenting the threats.

We have a lot of new threats and new technology. On the zero day initiative, last year actually it was very busy year we have 24% year-on-year this is ever fine over 1400 advisor rate for the vendors.

All those activity of course involve people and investment. For instance, the [contour one] which is our the way we file orders on ability, we have two Vancouver and Tokyo event to do this, we awarded over $0.5 million to external researcher to find the bugs and exploit.

And we held that capture the flag, which is the threat defense and offense competition. We have more than 700 teams worldwide and the final teams come to Tokyo for this final completion.

And internally we do in that a lot for our own people I call it people infrastructure. The people infrastructure means that we to train our engineer for all of this new technology, especially on AI, I would say, yes, I feel sorry there has been more money on R&D training, but I am really very proud that now I can say.

In Trend Micro, there's is more than 2,000 engineer that would have a hands on experience of AI technology and know how to program and do that. I think you all know, how hard for the industry to find the AI and security expert engineers.

So we're very proud that building those infrastructure, preparing the company's human capital to grow in the next 10 years. We also have this activity of grooming the new graduate.

So in the last one year, we actually trying 300 just new graduate to become to cybersecurity either sales SEO or engineers and I'm personally very proud 47% of are women. They are able to take on this very technical job, so all about all investments that we've done.

But obviously, I do need to apologize for the miss of the Q4, and the profit denominator expedition, we do learn and I believe we know how to adjust in 2019. I think our key learning in 2018.

First one is that tipping Point Success is twofold naive. Actually, we're very proud that 48% of the tipping point there was actually concluded by the traditional Trend Micro.

Remember I was talking about the transformation. Trend Micro is called region seller with selling to the best of administrator.

At first we were very worried that they don't know how to sell networking product, so we over training them and excite them and they were about now know they can sell to network security buyers, that’s good news, however while we learn these also they are over excited about the big deal and we still need to train them about how to manage the big deal. I think the Q4 miss part of this is because they were too optimistic about those big deal and keep on thinking it will come and it didn’t come.

But in 2019 I think we see APAC 1 launching and everybody will be understand how to balance between the big deal and so call volume deal transactional deal that’s the first learning we have. The second one is that we do understand, we do find out the Saas cost went up to fast.

APAC one is a Saas product and when we start to ramp up start to launch it we prepare a lot of computing power in the cloud and that’s a big cost to us. And now in 2019 both Trend Micro engineers is optimizing the usage of the cloud to lower the cost of the Saas but also when we sale more of APEC 1 and the per user cost per user cost will go down we believe we can rent up the sales for APEC 1 and then lower the cost for average per customers.

And last one we learned is that on boarding and training of cyber security expert is not like microwave that you can instant hit, it take time. And so for 2019, we collect the digestion year we hire a lot of graduate, new employees and we were taken to a year that we continue to train them and brought them to make sure they can be productive and so we call it shift to the digestion more to increase the efficiency.

So those are the 2019 adjustment that we would do. But long-term our strategy does not change.

I believe bring a cyber security company and offers full range of cyber security product transform into not a single product company but a solution providing company is what Trend Micro should be and will provide best value for our customer. Therefore in the next 10 years our strategy we call one vision enable our customers to be the Art of cybersecurity of cybersecurity.

So next phase is those securities are very ugly what our customer everyday is facing is like this millions of load pumping up in their screen they cannot see what's going on there how can cybersecurity be odd but actually if you can enable that these ability let them see clearly then they can see something like this. They can see where is the center point that they need to quickly take actions and once they take it out, they can enable their business to normal operation that's enough to recover from any attack and that is what we call art of cybersecurity.

To enabling customers to prepare for and recover and within and rapidly recover from thereat, so that they can be free to go further and do more that's the art of cybersecurity. In order to do that, we need to understand, what is the customer's biggest problem, why is that so difficult for them.

The first is the shift in IT and threat landscape and for Trend Micro why we can help, why Trend Micro can help them on that one, just because Trend Micro already have 30 years, they are the creator of security experience. We have proven four site of security and threat so our customer can rely on us to tell them what could be the next threat and those threat information intelligent sharing with our partner, with our customer of very high value.

Second one customer are provided by there is too many tools and very limited visibility they cannot see what is the overall security posture, they cannot see where the attack come from. And therefore, Trend Micro XGen's security strategy providing the connected threat defense can help our customer, enable them to have one ways they can see clearly where is that threat comes from and what is the way to prevent them most effectively.

And last one is the cybersecurity's shortage of the skillset, that was part of the reason we were so eager to invest in the human capital because the shortage of the cybersecurity expert is the overall industry's biggest problem. And therefore, Trend Micro with the expertise and passionate people we can enable our customer by doing something that manage detection and prevention service or enable our partner to deliver this type of service, the small business and midsize customer or even that very large enterprise they don't know how to manage those we can use different ways to enable them using our expertise.

That's why we believe our enabling our customer to master the art of cybersecurity is by using AI for detection and prevention in all of the platform and we leverage the cloud, the Trend Micro center intelligence about security. And finally, we integrate with customers with same system or sprank or their to enrich the data so take a very simple example, if we say [indiscernible] got spam mail and there is a link in there that is malicious, we can very quickly say not only [indiscernible] got that we sweep the whole company and we can tell that there was 10 more people or so received that and three of them also click that link and therefore just those three and [indiscernible] that I need to take care of.

So with those integration we believe we were able to enable our partner, our customer to receive the one vision that is why we believe our next 10 years most important thing enable very large enterprise with their SOC, security operations center enable our middle customers, midsize customers to use shared security operations center provided by our partner. And lastly the small business and the consumer we can enable the telecom company or Trend Micro's expertise can provide to our service to our customers and with those we also have some investment since last year by investing the management managed MDR that's what we call MDR service and we invest co-invest with our partner on very large enterprise managed service providing that is size initiative, and also very specialized for manufacture OT environment security monitoring we invest have a joint venture and set up with the industry specialty in OT that's TX1.

Those are the three major investments we done in 2018 or so. So I will say in conclusion, what we want to do is to enable our customers transform them from seeing all those simple very complicated lock into cybersecurity where they can see the whole vision so enable customer to be the art of cybersecurity and I also want to say I heard that in investment art is the very long term investment and also very profitable and arts collection is that the longer you invest the more return you get.

I hope Trend Micro is that art of cybersecurity. Thank you.

Thank you, I would like to talk about what is happening mostly in Japan. Every year we indicate the annual plan and this was the plan or policy for 2018 for the Japanese market.

For the enterprise business exchange eye piece business is shown at the top of the list, tipping point business was not strongly promoted by HP and the user base was very small. But in 2018 thanks to everybody's support Trend Micro's sales team can now provide tipping point as the solution and especially in OT which is a new area for us.

The discovery and tipping point combination is being provided as a solution. This is started in 2018, and it's been a major step forward.

Stepping point business has a baggage of nicely in Japan. And the second further point is that as we will see support.

The English version was available in November and we have to wait for the Japanese version so and there is some delay in the shipment of the product so we didn’t exactly enter this but into the '18. Regarding many large enterprises we have received a request of consultation for example in manufacturing industry when they manufacture the products they need a security policy and also as that products are shift they need to set up the security policy for those shift products.

And the manufacturers are thinking about company wide security policy and they are directly asking us for consultation and you are saying IoT system so we have received a request directly from the customers to investigate vulnerability and business some of the areas that we have entered into in 2018. We also have some education training requests and this is what we have started in 2018.

In 2019 we will continue to work on these new relationships. We may receive a request for consultation and security company and that will be the starting point for new business opportunities, and we are seeing more and more of these cases.

For a consumer like if we are moving forward with our home network mobile security and we're working with companies like Nick Camera, and we have various corners, where are home routers are placed and from those areas were also working in the television corners and our home network security sales is increasing in the TV section as well, as the rugby world cup and there is also the increase in the consumption tax this year. So the television corners and area where retailers are focusing their areas and if there are a 40 inch television sets locked and our products are often sold at the same time with them; and there is telecom and the routers where in most cases our product is included.

And for digital life support, there is a lot of the experiments we haven't started the official delivery yet, but there is not been any sales contributions from that area last year but this year we believe that this will come about, and we believe that sales contributions can meet from this area as for IoT there is a lot of announcements that have been made. We have made over 40 announcements about partners or PLCs involving IoT and there are quite a few validation trials that have been implemented as well.

And in Q4 were working on the hybrid infrastructure protection as Trend Micro is shifting from the endpoint of infrastructure and we have increased year-over-year 26% and 19% year-over-year increase in new sales especially in the mid market there is higher penetration, and so, compared to the previous year. We have increased by 44%, and in new areas there is an easy and our deep security has been has been adopted for their servers as a standard and there's also insurance coverage of cyber security that NEC is offering with Sumitomo Mitsui Marine insurance company and for deep discovery there been big deals including those involving tipping point and in the area of OT as well.

There are bigger deals and were also getting big deals from the central government. As far the user protection area for the endpoint market we've had a great share, but there's also been increased by 15% in new sales.

So we continue to see steady growth here. For the small and medium companies we have the security appliance product cloud edge and this has been increased 70% in terms of new customers and 75% increase in terms of year-over-year sales and we want to have further progress in this area where you see an increase in the number of partners and in CAS product cloud application security for office 365.

They say that Microsoft has security functions but there are some areas that need to be covered more so with the use of CAS it will be possible to enhance the security it’s not just for the large enterprise but also there are more and more companies who are SMB's or companies with less than 100 employees that have started to adopt this and even more than the standard features of office 365 were able to achieve greater results in this area and also there is the cloud storage that is combined and so CAS is able to scan everything and the whole combinations. So that we see more partners that are offering solutions in this area.

For the consumer area from the beginning of September, there was activity in the Apple Store and for 2 to 3 months, we were not able to sell because of the situation there. But even there Q4, including retailers we have been able to avoid impacting PC soft sales while still increasing our share in this area and they had that in terms of the handset retail stores all of our partners have started to resume selling our products and there is greater user penetration and when it comes to the resellers of handsets, we have seen 2.6 times greater growth in the previous year and in router vendors there are OEM shipments that are increasing especially for the Trend Micro smart home network.

On a year-over-year basis we have increase by 1.6 times in terms of sales and for the router vendors that are embedded with our smart phone user interface, on a monthly basis we’re shifting to revenue share model. We’re moving forward with negotiations and when this is done even with router vendors on a monthly basis.

We would be able to secure sales and so in both Japan, as well as the global market we are negotiating on this and for 2018 we lot of efforts in the area of enterprise market, we decided to get consulting deals depending on the vertical we have increased in our knowledge, including the central government, financial industry and manufacturing and were able to talk a different language, were able to talk not just about our products but also the issues that the particular verticals face and were able to use a language that is understandable to them instead of language that is unique to Trend Micro, and this has increased confidence among our customers, including the confidence that the central government has towards us and we have been providing our intelligence, as a result. For the consumer market in the United States home network security sales will be started, so in the home security network on a monthly basis we will be able to generate new sales.

We will be able to do this on a global basis. So we are looking forward to the results.

As for IoT in the network security area there is VMware that is taking advantage of our network function virtualization and we have gotten the authentication with this and we have solid solutions in place with these new developments. In the NTP Docomo there is the open cloud initiative for 5G.

They have created open house for this and our virtual network function is being looked at and IIT has recently move forward with industrial IoT network security software testing and our solution has been included as a standard and deliveries have started and for IoT devices. There is [Indiscernible] that has been moving forward with efforts.

And we have established a joint venture operation with [Indiscernible] and with [Indiscernible] for IoT gateway there is going to be smart ready, IoT secure pack that will start launching from this month. So anywhere to Trend Micro IoT security and there are more gateways for agricultural use and for manufacturing use, these are going to be shipped.

And on a monthly basis will be able to make a contribution to sales through these initiatives and we are positively participating in a lot of different global events for IoT, for the automotive, for factories, there more and more solutions that we are pushing forward and will increase in this year as well. So looking back at last year there is variety of different efforts that have been made for autonomous driving and connected cars, and these products will start to generate sales more and more this year, including [Indiscernible] and also for the TFS one for its factories we have from the second half of this year it's going to be a lot of more protocols that will be able to accommodate in factories and will be able to board to the lower layers for security, a total solution can be provided.

We will take the initiative in providing solutions here in Japan and there are much expectations about what we can do in this area. With that concludes my report.

Thank you.

Ueno, Daiwa Securities. I have a question about the overall situation, under achievement was explain because of our optimistic plan in U.S and Latin America and also last year you had large deals but not this year, so this is the absence of large deals that you had last year.

Still if you look at the landing even it was optimistic if this organic growth 3% increase and after exchange adjustment 5% growth in sales, so 3% to 5% increase maybe this is organic growth expected organic growth for Trend Micro, that’s my first question. I ask the same question in the third quarter as well.

You hiring a lot of people maybe decelerate this year. So maybe there is more leverage like other software companies for example 10% increase in profit maybe expected but the structure is same to what is the cost of structure for this year, these are the two questions.

First of all organically what do we expect to see, FY19 we’re not planning any special factors such as acquisition. So organic growth rate I think you can reduce from that and the headcount is increasing but leverage is not really working, why not.

I have mentioned this before. Operating leverage is not so big going forward.

Fast type service and also as Eva mentioned there is a shortage of experts and software sales is not just about the selling product, it’s just selling the customers is already paying for the software, they want us to solve the security problem. They have kind of problem challenge that they want us to address and if they cannot do it by themselves they have ask on expert and if the expert cannot solve the problem they don’t want to pay for that service.

We’re doing a lot of demonstrations and experiments as I mentioned, we’re trying to figure out how much Trend Micro should do and how much we should leave up to channel and we have to make advance investments and we have to gain experience before we can teach the channel that is why the human resource expanding recently. And another thing I can say is that operating leverage for the business model going forward is not that high, so higher sales means higher level of expense as well.

Now problem has to be solved and it can be done and if we have relationship with the customers that way the renewal should improve, so operating leverage maybe not high but we do not believe that the profit will not go up. Date center recent demand is not very dropping for example is another effect.

What was that in the fourth the sales growth just for the three months is coming down and the profit is also coming down is there any special factor on the demand side.

Four quarter this is human resources we cannot really make adjustment every quarter, there may be some variances or differences every quarter but we don’t think that the sales would go up and profit would go down. So we’re aiming for increase sales and profit.

So external factors do not really matter for example semiconductor market is not so strong right now and data center demand is maybe decelerating in growth. No direct impact of course there maybe indirect impact, end users may see some challenges and they may reduce the security budget but this is more like a lagging indicator.

So in the most recent quarter for example, it was Brexit in the UK and there maybe some delay but we have not really seen that yet. Thank you.

Are there any other questions.

My name is Kikuchi of SMBC Nikko Securities. There're two questions.

First, in regard to costs, last year when it ended the cost in the second half grew and perhaps on a year-over-year basis in the first half there will be increase and maybe slow down in the second half. That was the image that I had but there is the 5% growth.

Are you going to try and reduce the costs or is it going to be growing in the same manner so that you have a 5% percent increase in costs.

Well we will try to keep the cost down, but on the other hand, we have to make advanced investments for the future. So we're not going to refuse future investments all of a sudden there's going to be the digestion that has to be carried out, and we've made a lot of different investments and will look at the efficiency of those investments as we move forward.

So are the costs are not just going to grow in the first half, there will be growth of costs in the first half, but will consistently grow throughout we have the full year forecast, but we believe that there will be more investments in the first half and we'll be looking at the efficiency of those costs in the second half.

Now the second question is in regard to the top line and you only have a full year forecast, but in regard to the first half now when it comes to the outstanding deferred revenue amounts you talked about quite a accumulation of deferrals. So in the first half does it look like the deferred revenues will contribute to sales or is it not just going to take place in the first half?

In your business structure there are bigger deals so that this comes out in the fourth quarter and may not have been the case in maybe last quarter, but for this new fiscal year there should be considerable number of deals in the fourth quarter. So what is the image that you have in this area?

First of all in regards to the big deals we believe that there'll be a concentration in the fourth quarter. This is global phenomenon that we see in procurement and so the weight is higher on the second half.

As for the deferred revenues this should be left to expert Mr. Habada.

Well, I'm not an expert but logically speaking deferred revenues outstanding amount will be processed and as time passes and this will diminish and so therefore the impact will be bigger in the first half and less in the second half. So the deferred revenue impact will be greater in the first half than the second half.

Well in the quarter that just finished the growth has stopped slightly. And so for the new second half of our rather the first half of this fiscal year it will be lower growth rate and in the cost on a year-over-year basis it will increase and you may be able to absorb this on a full year basis you may be able to treat it.

But what about in the first half, there is also the accounting aspects to consider for deferred revenues, but they'll be, there will be higher in the second half is how we feel about it. As you saw there are investments and we have to get a return on the investment and there is also the procurement situations so this will mean that the second half sales will be grater.

And even if the operating leverage is low it’s not zero and so therefore I don’t mean that the profits will be higher in the second half. I see.

Thank you very much.

Hiroko Sato, Jeffries Securities. Two questions.

First question, for this fiscal year you were very focused on big deals, that’s what you said. And what about mid sized and small size deals, maybe in terms of deals of if they were on cycle, there competitor got those deals and maybe you’re losing share in those market or segments.

I think we have seen this story before but did it happen last year that’s my first question.

It we defocus of course the competitors will get that and I think that has happened.

And this is happening both in the U.S and Europe.

Yes I believe so.

Understand. So the focus shifted to large sized clients does that mean that you will beginning to increase the share.

For that Q4 as I explained some of those midsized deal because mainly is on the desktop one and because of our impact was, the new version was announced in November, so I do believe there was customers, they are now leaving it, they are just waiting for the new version. So the debate of the purchase of those more deal.

So we don’t have to worry too much about losing market share on the low end or maybe the medium size clients while your entire sales force seems to be focused on the bigger size client.

I don’t see that trend.

That’s good to know. Second question, in the fourth quarter you did an offside meeting in Fukuoka, I think you spend about JPY400 million or JPY500 million are you going to do that again in FY19.

Offsite meeting this was done for training so its education fee, yes its education. Last year this was outside of the budget, this year are we going to do this, well no I don’t think its planned because there were some criticism and finally we have to think about the profit.

When we spoke about this last year there were some questions about we know that AI important its critical and this event was really impactful to deliver this message of importance of AI even with JPY500 million spent. So within the organization it was high priority but I don’t think we need to repeat to same thing again this year.

Okay going back to the early question, for the second half operating income will be larger than the first half but if there is like one off event like this we don’t have to think about this risk. Well, if that happens then we will provide you with proper explanation within the organization there are some internal events and as you may know there is a performance bonus which means that if the profit goes down there is no bonus, we have to explain that to the employees too.

We cannot really say that we spent too much money for Coke and there is no bonus. That would make the employees quite unhappy.

When you make the revision the other day there was a ¥500 million additional social benefit and I was, I didn't quite understand the people leaving and they have to maybe provide additional package, leaving allowance. Well we wanted to activate the mobility of human resources, we were basically telling employees they could retire early if they wanted to and if we provide the system accounting wise we have to add some reserve, it's not that people are leaving.

I had the strong impression that you didn't have enough people, engineers and the target is 45 years or older so older engineers are not useful.

Let's ask to Colt.

In the case of Japan and we just [indiscernible] the system from outside where people have to wait until the end to be able to receive this retirement allowance. But if somebody wants to change a career midway, we want to support that as well.

And it is also possible that people leave the company and come back they can gain new experience and they can come back to Trend Micro again if they want to. And there's also [indiscernible] system they can go and work at the clients' company, that's also supported.

So mobility of the human resources is what we want to support and in terms of accounting standards we have to have some reserve for that.

I think I understand that thank you.

So, are there any other questions.

I'd like to ask about more details about this. What's the background for the delay in the release and as a result, 48X1 in terms of the deferred revenue, what was the impact of 8X1.

If we look at the materials on page 18 from September to December the deferred revenues have not increased compared to previous years. So, the impact does not seem to be so big, so please let me know the details.

Actually is not delayed it was scheduled to release on November I was just saying that because it release on November there wasn't time to produce enough revenue for Q4. Apex 1 is a product that not only anti-virus it include like a lot of vulnerability shielding and include the fraud protection and also it include if someone got breached, the SO, the security officer can go back to find all those evidence, so it records a lot of the activity, so it's a post prevention protection and also detection and forensic tool, so it's a complete package of the new cyber security endpoint solution.

So it was launched on time, but it did not generate the revenues that you expected. So what looks like…

It does not generate revenue in Q4.

But it was planned. So I look like it was tough cell, tougher cell, is it a right way to look at it.

Maybe I didn’t express it well. We do not stand for APEC 1 to generate revenue in Q4.

Whatever mentioned in her explanation is that the sales people were waiting for APEC1 and so the conventional product sales did on make a contribution that much, its impact of APEC1 sales but rather salespeople were focused on this product. It's a product that is complex and so there is that much more sales training that is necessary, and so there was a negative impact on the conventional product sales.

Another question, supplementary point. It was mentioned about the deferred revenues not increasing but in Q4 when we need analyst we explained about this [Foreign Language].

For North America we have installment payments. So in Q4, there was 2.2 billion was canceled out.

This did not have any impact on net sales or pre-GAAP but for deferred revenues we get the money first. But the recognition takes place over the period has been paid [Foreign Language].

But we cannot recognize this in our balance sheet, and what common is that it’s a multiyear agreement whereby thee are installment payments. This increase in 2018 and so we discussed with the auditing company about how we should treat this.

And we process this accordingly and in fourth quarter of 2018 for U.S. There was about decrease of ¥2 billion, according to the accounting but with this is added it will not be an increase but it will be at the same level.

But the decrease is mainly due to the accounts processing.

I was disappoint that I would like to add to follow up on that. So there has been sales efforts and for the deferred revenues there has been some accounts processing and in the first half net sales and in profits there should be a contribution of the deferred revenues.

Yes, we’re looking forward to that happening.

I think I have another type of question in regard to the cost AWS or cloud expenses. How much was it for the full year, and if we make models for the future for B2B sales or enterprise sales should we be looking at these elements as we try to make forecasts.

How we will be disclosing we will need to study this, what we like to do is to look at the customer's infrastructure perhaps the items we have right now or not the appropriate way of showing this, it should be several billions of yen cloud related per year. So we will think about the method of disclosure for this and will get back to you on that later.

In the case of the analysts models, it's not good to look at just a lump fingers and so we will be looking at ways of disclosing the numbers for this. If it's several billions of yen compared to the previous year.

How much increase was there quite high. Perhaps about the 50% increase.

But in this area were looking at the disclosures by competitors and this sales are increasing the amount are still limited, but the future here is that and this doesn't appear in the deferred revenues. So when we look at the license users shifting to SaaS, and it looks as if the net sales is going down, but meanwhile this will gradually increase in which case the net sales will increase.

So there are SaaS expenses that are increasing, but the SaaS net sales in total sales there is going to shift to service, licenses, so the impact cannot be observed in what is recognized as net sales.