Ajinomoto Co., Inc.

Good evening, everyone. Thank you for joining Ajinomoto's Fiscal '24 Results Briefing despite your busy schedule.

I am from the IR department. I'll be moderating.

My name is Kaji. Here are the attendees from our side.

Representative Executive Officer, President and CEO; Mr. Nakamura.

This is Nakamura.

Executive Officer and Senior Vice President, General Manager, Corporate Division, Sasaki-san.

This is Sasaki speaking.

Executive Officer and Senior Vice President, General Manager, Food Products Division, Mr. Masai.

This is Masai speaking.

Executive Officer and Senior Vice President, General Manager, Bio & Fine Chemicals division, Mr. Maeda.

This is Maeda.

Executive Officer and Vice President, in charge of Finance and Investor Relations, Mr. Mizutani.

This is Mizutani speaking.

Executive Officer and Vice President, Supervision of Frozen Foods; Mr. Kawana.

This is Kawana speaking.

Executive Officer in charge of Diversity and HR, Ms. Kayahara.

This is Kayahara. Hello.

So, we have seven people from our side present. First, Mr.

Nakamura will be explaining the fiscal '24 summary results and fiscal year 2025 forecast as well as initiatives for enhancing corporate value. This will be followed by a Q&A session.

We are planning for 90 minutes for the entire webinar. Today's presentation materials are available at our IR website on Ajinomoto's home page.

Today's content will be recorded, including the Q&A session and will be posted on our IR website on a later date. So, we would like to get started.

Mr. Nakamura, over to you.

Good afternoon, everyone. I'm Representative Executive Officer, President and CEO; Shigeo Nakamura for Ajinomoto Company Inc.

I'll be talking about the forecast for FY 2025 initiatives for enhancing corporate value. First of all, FY 2024 summary results and FY 2025 forecast.

And then this will be followed by initiatives for enhancing corporate value. Today's message is of threefold.

Sales and business profit in FY 2024 reached the highest levels since the introduction of IFRS in FY 2016, excluding the impact of the Forge Biologics acquisition. Business profit continued double-digit growth.

Our profit attributable to owners of the parent company will be temporary, affected by factors such as the sale of the subsidiary, will accelerate transformation of the business portfolio to achieve vision for 2030. Revenue and profit are projected to increase in FY 2025 forecast, too.

While sticking to our ASV increase indicators for FY 2025, milestones on the path to FY 2030, we're aiming to solidly achieve the forecast in the measures related to shareholder returns. We'll work to increase dividends and repurchase shares in accordance with policies to which we have committed ourselves in the road map.

We have properly received the Company's purpose from Mr. Fujie.

And by evolving ASV initiatives, we will enhance our corporate value and tackle the challenge of achieving the 2030 Roadmap ahead of schedule. Now let's talk about summary results for FY 2024 and forecast for 2025.

In our consolidated results for fiscal year ended March 2025, we achieved new records in both sales and business profits. Sales were JPY1.530 trillion, an increase of 6% year-on-year, 4% excluding the impact of currency translation.

Seasonings & Foods overseas continue to be strong and Health Care and Others recovered, leading to increased revenue overall. Business profit was JPY159.3 billion, an increase of 7.9% year-on-year or 4.5%, excluding the impact of currency translation.

Excluding the impact of Forge acquisition, we achieved a double-digit growth rate. The main factor behind the difference from the forecast of JPY160 billion was a delay in shipment in Bio-Pharma Services.

Profit attributable to owners of the parent company decreased significantly due to reasons, including the recording of structural reform expenses for the sale of Althea and the recording of an impairment loss and structural reform expenses for the sale of Hayward Plant for frozen foods in North America. This slide shows an analysis of changes for business profit in FY 2024 and FY 2023.

The change in GP due to the change in sales was an increase of JPY32.5 billion year-on-year. And SG&A, we are increasing the investments in intangible suites assets required for future sustainable growth in line with the strategies of 2030 Roadmap.

This slide shows analysis of changes for the business profit by segment in FY 2024 and 2023. For reference, at the bottom of the slide is analysis with changes to get the forecast for fiscal 2024 and results for fiscal 2023 as shown here compared to the full year forecast.

We achieved solid profit growth in Seasonings & Foods for which we had forecast a decline in profit. In Healthcare and Others, too, while the shifting of some shipments to FY 2025 in Bio-Pharma Services had an impact, we solidly increased profit primarily in Functional Materials.

Frozen Foods recorded an increase in profit in North America but struggled in Japan. We increased prices in March 2025, and we're working to achieve a comeback.

For Sauce & Seasonings and Quick Nourishment combined in both Japan and overseas, this slide breaks down sales into volume and unit price and further shows analysis of change in business profit. In fiscal 2024, sales in Japan increased 4% year-on-year breaking down to a 2% decrease in volume and a 6% increase in unit prices.

Volume decreased in the Coffee business due to numerous price increases in response to inflation in coffee bean prices; however, unit price growth compensated for the decreased volume and revenue increased. As will be discussed later, with Coffee excluded, we grew both volume and unit prices.

The waterfall chart at the bottom left shows that increased revenue was unable to compensate for the higher raw material costs and higher SG&A, resulting in a decrease in profit. Overseas, both unit prices and volume increased 3% from the previous year with sales growth of 6% on a local currency basis.

Business profit increased significantly due to factors, including the relaxation of the increased costs from the substantial inflation of raw materials and fuel prices. This slide shows our progress towards the ASV indicators under the 2030 Roadmap.

ROE and ROIC declined due to factors such as structural reform expenses associated with the sale of Althea. However, with those special factors and the impact of the Forge acquisition excluded, ROE and ROIC have increased solidly year-on-year to 14.7% and 9.8%, respectively.

EBITDA margin remained strong at 16.1%. This slide shows ASV indicators by segment.

These are progressing well in Seasonings & Foods. ROIC fell year-on-year due to structural reform expenses associated with the sale of Hayward plant in North America as well as a decrease in business profit in Frozen Foods.

The negative ROIC in Healthcare and Others was due to the recording of structural reform expenses associated with the sale of Althea. Excluding those onetime costs, ROIC has been improving since last year.

For fiscal 2025, we expect revenue and profit to continue increasing. We forecast sales of JPY1.618 trillion, an increase of 5.7% year-on-year or 6.7%, with the impact of currency translation excluded.

Seasonings & Foods will continue to drive increases overall. We expect business profit of JPY180 billion, an increase of 13.0% year-on-year.

In fiscal 2025, a significant increase in profit in Bio-Pharma Services & Ingredients will drive profit growth. We also bring profit attributable to owners of the parent company backup, aiming for JPY120 billion.

This is an increase of 70.7% from fiscal 2024, during which this profit had declined due to factors including the recording of structural reform expenses. This figure incorporates presumed profit from the sale of land and buildings at the head office, which is being announced today.

Regarding the impact of tariffs and other policy measures of the U.S., the direct business impact is minor, but we recognize the need to closely watch the macroeconomic environment. This slide shows a waterfall chart of our business profit forecast.

We're working to increase sales, GP margin and GP, while solidly increased investing in intangible assets. Within the scope of GP growth, we will grow business profit.

This slide shows an analysis of the forecast changes in business profit by segment from the previous year to get the forecast. From the current fiscal year, shared company-wide expenses will not be allocated to specific segments, but will be managed and disclosed as shared company-wide expenses.

We're planning for continued profit growth in Seasonings & Foods and aiming for a solid recovery of profitability in Frozen Foods segment in which profit decreased in fiscal 2024. We're planning to add JPY17 billion in business profit through continued robust performance in Functional Materials, within Healthcare and Others as well as through a significant increase in profit in Bio-Pharma Services and Ingredients.

This slide shows an analysis of sales and unit prices for Sauce & Seasonings and quick nourishment combined in both Japan and overseas, along with analysis of changes expected in business profit to get our forecast. We expect sales in Japan to increase 7% year-on-year.

Breaking down as a 2% decrease in volume and a 9% decrease in unit prices. The impact of increased unit prices and decreased volume in Coffee is large.

Excluding Coffee, we grew both unit prices and volume as we did in fiscal 2024. Regarding the increase in cost due to substantial inflation of raw material and fuel prices, we will respond by solidly raising prices.

Overseas, we plan to solidly grow volume while steadily generating unit price effects to achieve increases of 6% in volume and 3% in unit prices. The Sauce & Seasonings and Quick Nourishment in Japan, with Coffee excluded, we plan to drive overall performance by increasing volume, while steadily increasing unit prices.

We will also carefully cover business profit margin over time. In addition to organic growth in existing brands, we will return our top line to grow through contributions to sales by new products, and we'll work to reduce costs and improve the GP margin through price increases and launch of high value-added parts.

Overseas, Seasonings & Foods continues to grow steadily. We expect further growth in fiscal 2025.

While prices of raw materials have settled overall, we will take necessary actions, including increasing the price of Birdy 3in1 powdered beverages in Thailand in May to address the soaring prices of coffee beans. We will also aim to achieve unit price growth by increasing high value-added products.

By increasing volume beyond the increase in unit prices, we worked to achieve sales growth of 9%, excluding the impact of currency translation. Further strength in existing brands provide high value-added products that capture changes among consumers, accelerate the development of areas with potential in major countries and their neighboring countries and continuously and steadily grow profit.

This slide looks at Frozen Foods. The segment achieved strong profit growth in North America in fiscal '24.

In Japan, however, segment profit decreased amid high prices of raw materials and the impact of currency translation contributing to a profit decrease overall. Heading towards fiscal year 2030, we'll work to grow sales at a CAGR of 7% or higher by adding new businesses while solidly growing our existing businesses.

At the same time, we aim to enhance capital efficiency. For Frozen Foods in Japan, we implemented price increases in March 2025 as a short-term countermeasure.

In the Fried Rice and Chicken businesses, we will consolidate the factories of the businesses into one factory and will drastically reform profitability. We have also begun commercialization of [indiscernible] and other One Plate products with a steady progress underway.

In this way, we will continue drastic strategy reviews and achieve a return to growth. This slide refers Health Care and Others.

Looking first at Functional Materials amid an environment that included a recovery in the semiconductor market and expansion of AI-related demand, electronic materials performed well in fiscal '24, bouncing back from a decline in fiscal '23. Assuming no major environmental changes in fiscal '25, we expect double-digit business growth.

While the direct impact of U.S. policy will be minor, we will closely monitor the risk of economic recession, developing as a result.

Heading toward 2030, we expect market growth due to factors such as higher semiconductor performance. With ABF also supporting that growth, we'll work to increase the scale of the ABF business in line with growth in the semiconductor market.

For ABF to support the growth of the semiconductor market, we must respond to the market's ongoing expansion through increased production of ABF. Heading towards 2030, we plan to invest about JPY25 billion to address increased demand.

As our first step, we constructed a new factory at the Gunma Plant of Ajinomoto Fine-Techno Company. We are now moving forward with authorization by customers aiming for full scale operation during fiscal '25.

We'll prepare an ABF supply structure, maintain ABF's high market share and shore up its position as the de facto standard in the industry. Next is Bio-Pharma Services or CDMO.

We made the decision to sell to Althea to accelerate our transition to a high value-added business model, capitalizing on the superiority of our original technologies based on AminoScience. While the sale of Althea will have an impact in fiscal '25, areas based on our original technologies will accelerate growth.

Heading towards 2030, we will aim for dramatic growth by expanding areas such as AJIPHASE, AJICAP Forge's gene therapies. This slide looks at the status of Bio-Pharma services, CDMO services by area.

In Europe in fiscal '24, we had sales nearly on par with the previous year and significantly increased business profit. Products with high business profit margin, not only medium molecules, but also small molecules contributed, and we expect revenue and profit to increase in fiscal '25 as well.

In Japan in fiscal '24, sales were flat year-on-year due to delayed shipment of AJIPHASE. With the added recording of structural reform expenses, business profit decreased.

In fiscal '25, we're planning for increased revenue and profit for AJIPHASE as well as a degree of revenue contribution from AJICAP, as will be discussed later. Orders in fiscal '24 were strong for Forge in North America, with sales roughly doubling year-on-year.

In fiscal '25, we're planning to increase sales dramatically and breakeven in EBITDA margin. One original technology based on AminoScience is the antibody drug conjugates ADC technology, AJICAP.

Our ADC drug discovery support and manufacturing services have adopted a reduced asset business model centered on AJICAP technology licensing. Licensing agreements have been steadily increasing in recent years, and we expect sales to reach billions of yen in fiscal year 2025.

By expanding applications for AJICAP and by strengthening collaborations in North America where demand is the greatest, we will continue to increase the number of licensing agreements. This slide shows progress toward our ASV indicators under the 2030 Roadmap.

Regarding ROE and ROIC, there was a decrease in bottom line due to the recording of structural reform expenses in fiscal year 2024 and fiscal '25. In addition to not having this impact, we're expecting a solid increase in profit and the further recording of profit from the sale of fixed assets to deliver a significant recovery.

Excluding the impact of the Forge acquisition, in particular, we're planning for ROE of 19%, exceeding the 18% originally planned at the time the 2030 Roadmap was announced. We expect EBITDA margin to reach the originally planned value because it is continuing to expand steadily.

ASV indicators by segment are shown here. From this fiscal year, shared company-wide expenses are not allocated to individual segments.

Accordingly, the plans for ROIC and EBITDA margin for fiscal '25 shown in the 2030 Roadmap have been revised to values that exclude the impact of shared company-wide expense allocation. Note that company-wide, in addition to ROIC by segment, there is a shared company-wide expense ROIC of minus 3.5%.

In fiscal '24, total assets decreased due to initiatives to reduce inventory assets and the impact of currency translation. Up to last year, we used net D/E ratio of 40% to 60% as an indicator of financial discipline.

From fiscal '25, we are replacing that with net interest-bearing debt divided by EBITDA ratio of less than two. This indicator has been disclosed by many other companies in Japan and globally.

While growing EBITDA, we will control the ratio to under two when utilizing net interest-bearing debt leverage. Despite the changes in indicators, there is no change in our policy of utilizing appropriate financial leverage.

Operating cash flow in fiscal 2024 exceeded our revised fiscal '24 forecast of JPY195 billion to hit a new record of over JPY200 billion in cash generation. Although profit before tax decreased by over JPY30 billion, impairment losses due to structural reform, the main cause, involve no cash expenditure.

And at the same time, we reduced corporate taxes and tax effect accounting, which boosted operating cash flow. Initiatives to reduce inventory assets are also making contributions.

In fiscal '25, we will enhance our capability to generate cash by improving working capital and are expecting operating cash flow of over JPY220 billion. In fiscal '24, we made growth-oriented capital investments worth about JPY96 billion.

We also enhanced our investments in intangible assets bringing the percentage of investment in intangible assets to about 45%. In fiscal '25, we're planning capital investments of over JPY110 billion and expect intangible asset investments to remain in the low 40% range.

This slide shows key management indicators in the purpose-driven management by medium-term ASV initiatives 2030 Roadmap. ROE and ROIC were temporarily weighed down by the recording of structural reform expenses in fiscal '24.

With the impact of the Forge acquisition excluded, ROE in fiscal '25 is about 19%, higher than the initial target in the 2030 Roadmap. ROIC is projected to be about 12%, within distance of our challenging initial target of 13%.

Normalized EPS based on business profit also rose solidly in fiscal '24. The advantage of this indicator, which does not reflect extraordinary profit over conventional EPS has been demonstrated and leads to an increase in dividends as will be explained later.

In fiscal '25, we're expecting to create about JPY220 billion in cash flow and are aiming to reduce cash and deposits to JPY90 billion. We will also actively engage in shareholder returns as noted in today's announcement of JPY100 billion in share repurchases.

Next, I'd like to talk about shareholder return. As noted earlier, with the adoption of dividends based on normalized EPS, which is not affected by extraordinary fluctuations in profit, dividends will not be affected by the decline in profit stemming from impairment losses associated with the structural reforms in fiscal '24.

We will plan to increase the annual dividend by JPY8 to JPY48 in fiscal '25. We repurchased JPY90 billion in shares in fiscal '23 and '24 and today announced the repurchase of JPY100 billion in shares, more than in past fiscal years.

We'll continue to actively and with agility engage in shareholder returns. Now I'd like to talk about initiatives for enhancing corporate value.

Now once again, I'd like to introduce myself. I was born in Hyogo in 1967 in Himeji City.

The picture is of me as a two-year-old on the left top corner. I'm grateful to my parents for keeping such a presidential photo of me.

When I joined Ajinomoto in 1992, I worked on electronic materials at the Central Research Laboratory. In 1996, we began development of Ajinomoto Build-up Film.

In 1999, it was adopted by a major semiconductor manufacturer and mass production began. It became an indispensable material for high-performance semiconductors and our ABF business began to grow.

Meanwhile, I had the good fortune of becoming distinguished researcher at University of California, Santa Barbara, receiving the Chemical Technology award from the Chemical Society of Japan and Porter Prize of Hitotsubashi University. I was then made manager of the Research Institute for Bioscience Products and Fine Chemicals, where I was still researching in the area of bio and fine chemicals and then started in electronic materials.

In 2019, I took the role of Corporate Executive Officer and President of Ajinomoto Fine-Tech Company Inc. And in April 2022, I took up the role of General Manager of Latin America division and President of Ajinomoto do Brasil and I was appointed Vice President and Executive Officer and President and CEO on February 3.

We'll solidly take up the purpose of contributing to the well-being of all human beings [outside] in our planet with which we received from Former President, Fujie. Doing so will evolve ASV initiatives and we challenge ourselves to achieve 2030 Roadmap ahead of schedule.

This is the conceptual diagram showing the structure of the evolution ASV management that I aim to achieve. Based on the purpose of Ajinomoto Group Way, with the high-speed development system as the key driving the speed up and scale up processes will bring about evolution of our business portfolio by steadily promoting the creation of new businesses and organic growth through business model transformation in four growth areas, both by forecasting from existing businesses and backcasting from ideal vision.

And based on the corporate culture that supports renewal, we will drive the evolution of the management cycle and strengthen intangible assets, thereby supporting the evolution of business portfolio. Also, accelerate the evolution of our business portfolio.

While accelerating growth in four growth areas of healthcare, food and wellness and [ICT] and green, we will withdraw from businesses for which we have determined that we are not the best owner. We'll advance the transformation of our CDMO business to a high value-added business model based on AminoScience.

The sale of Althea in North America announced last month marks the transfer of sterile fill and finish finish business, which is no longer aligned with our axis of competitive advantage and growth to the best owner. We're also carrying out the sale of Frozen Food segment's Hayward plant in North America, in line with our strategy to advance asset reduction and evolve our business towards a high ROIC.

As essential element of the high-speed development system is to think about management resources seen as people, goods, money, information and time, the time access being a distinguishing element. The high-speed development system is a speedy and agile way to address today's fast-paced market and customer environment.

Based on a healthy sense of urgency, the high-speed development system is built on the three key success factors anticipating customer needs developing multiple solutions quickly and continuously refining solutions and streamlining processes based on feedback. This was an essential approach for the success of Ajinomoto buildup film, but can also apply to other businesses and functions and could be evolved further still.

Put another way, the high-speed development system means not putting off until tomorrow what can be done today, every day, as the distinguished economist, Peter Drucker said, the future is created by what you do today, not tomorrow. Next, let me present an example of high-speed development system based on Ajinomoto do Brazil.

This is from the Consumer Food business. We start by identifying the needs.

To do this, we analyze future consumer data and consumer trends and brainstorm ideas to address the needs. Next, we develop a strategy that builds on our strengths.

We analyze rivals and study possible production systems with the R&D team from an early stage. We apply a technique for mass innovation, a press release from the future.

The press release is discussed by all directors, then Ajinomoto Group technologies are applied to new product concepts and product design. This follows a high-speed parallel development model, moving to manufacture and launch, and we have co-creation in the middle here.

And in some cases, this will mean aiming to speed up and scale up in collaboration with another company. This has indeed had the positive effect of increasing the number of new product launches in Brazil.

As I've spoken about today, the high-speed development system is not just about speeding up the process by anticipating customer needs, the concept also incorporates doing things properly or gentle [Foreign Language]. In Japanese, [Foreign Language] has a meaning of properly doing what needs to be done without a hitch right on.

I believe that executing a properly thought-out strategy will lead to enhanced corporate value and a stronger corporate brand for the Ajinomoto Group. This is our important philosophy.

Our purpose alone is just idealism, what must follow our practice and principles. Rather than stopping at simply stating our purpose, we aim to refine our company-wide strategy and business function strategies based on ASV and the Ajinomoto Group way.

We will then translate these into concrete and personal goals for each organization and employee, pursuing them with passion to enhance our execution capabilities. Human resources are the lifeblood of a company.

Going forward, we are shifting from activities to instill our purpose to a stage focused on strengthening our ability, to think well and do well. This includes enhancing our capabilities in both planning and execution while valuing and evolving the human resources, organization and corporate culture that support them.

In particular, to create human resources who can drive global business growth, we aim to achieve true diversity management that goes beyond gender and nationality alone by promoting overseas work for women and foreign nationals, promoting them to key positions and creating human resources with diverse experience through career paths that cross business divisions and functional divisions. I have summarized my views of the challenges and the key points as well as the approaches to actions for challenges identified using the cross-SWOT analysis framework.

Challenge one is harnessing the Company's strength and opportunities presented by the market to maintain and expanding existing core businesses. Challenge two is enhancing the efficiency of management resources, promoting talent diversification and fostering a culture of challenge in order to overcome weaknesses and seize market opportunities.

Challenge three is to take up the challenge of new products and new markets by backcasting from the future customer and market needs in order to leverage the Company's strength to prepare for threats from the market. Challenge four is to firmly recognize the Company's weaknesses and threats from the market and consider driving the evolution of portfolio management, boosting SCM resilience and strengthening governance as a company-wide strategy management initiative who will be responsible for the initiatives to address the challenges.

We will clarify the points that are difficult to understand and review the 60-day plan with regard to company-wide strategic themes based on that. This is an outline of the 60-day plan.

The purpose is to move toward further growth and the evolution of ASV management, review the management issues that should be addressed and set out a direction for actions. Several themes to be reviewed are selected from the perspective of a company-wide strategy based on the challenges identified through the cross-SWOT approach discussed earlier or established by combining different themes.

In short, we feel that the issue lies in the lack of concrete medium- to long-term strategies, and we aim to properly articulate the essence behind this issue as well as the measures to address it. Over the course of these 60 days, I think it would be ideal to create opportunities for launching action or transformation and to set up the framework.

I'd like to explain the results of the 60-day plan at an appropriate timing. Finally, here's my message.

I have three. Although we are in an unclear economic environment, we will aim to solidify -- solidly achieve our targets for fiscal '25, a milestone along the path of the 2030 Roadmap by promptly responding to changes.

Secondly, we will strive to achieve a 2030 Roadmap one year earlier. We will accelerate business growth, particularly in bio and fine chemicals, speedily and properly.

Thirdly, under our 60-day plan from April, we will articulate a strategy and lay rails for its implementation to achieve further sustainable growth beyond the 2030 Roadmap. For investors and analysts, I hope today's presentation kicks off start to our dialogue, and I will be open to your candid feedback.

In order to raise corporate value, I'd like to ask you for your ongoing support. Thank you.

Thank you very much, Mr. Nakamura.

We'd like to move to the Q&A session. [Operator Instructions].

Those of you who are participating from overseas, you can ask questions in English. There will be answers translated simultaneously.

And if there are so many people who are asking questions, we may not be able to cover everyone. I'd like to ask for your kind understanding.

Let me get started.

Now the first question Mizuho Securities, Saji-san, please.

There are two simple questions. The first one is about CDMO.

By the business forecast for -- by segment is what I'm looking at. There is sale of Althea.

So it's a bit difficult to see, clearly, but the sales is JPY600 million plus and JPY800 million in business profit increase is shown. And if possible, excluding Althea this year, what would be the top line growth rate is what you're expecting?

And about JPY10.8 billion -- JPY5 billion is probably from the effect of Forge, but the rest is quite sizable. So can you give us more color.

You talked about AJICAP, Mr. Nakamura, but I think there is a sizable amount of profit.

So can you explain more about the background. Can I continue with my second question?

Yes. Please go ahead with your second question.

So just simply, a JPY100 billion share buyback was announced but JPY5.5 billion is the book value. And there is JPY100 billion cash.

So there will be more than JPY30 billion cash inflow. So JPY100 billion has incorporated that to some extent.

But this JPY35 billion the cash inflow after the competitive bidding, has that been incorporated to some extent to make decision? Because the share buyback size was a bit larger than previously done, so can you explain more about that?

Thank you for your question. About the CDMO business, in this fiscal year, the structural reform impairment loss has been recorded in large amounts.

But from next fiscal year, there will be growth in revenue and profit. And AJICAP profit increase is expected.

So Maeda, our Bio & Fine Business Head will explain.

Thank you very much for your question, Mr. Saji.

JPY17 billion year-to-year could -- seem to be quite large in 2025, that's what you're asking about. So there are several factors.

In 2024, the structural reform expenses, not just from Althea, but from other businesses as well, were incorporated. And as we explained, the one before last, in '23, the profit was quite bad, but in 2024, revenue was good, but profit was recovering later on because cash conversion is longer in Ajinomoto compared to the average.

So in terms of cost, we haven't recovered fully, but in '25, there will be some benefits in cost, and there will be stable -- more stable revenue. And demand is -- remains strong in Europe and AJICAP royalty income will be billions of yen, as Nakamura said.

So for JPY17 billion, we're not presenting that much stretch targets. So as shown on this slide, Bio-Pharma Services & Ingredients the breakdown, the JPY10.8 billion, there will be probably JPY5 billion or less from Forge.

So in terms of cost, and there will be revenue increase and also cost reduction and the revenue increase and royalty. I think that will constitute JPY5 billion.

Is that what you're expecting to achieve. Well, EBITDA was expected to become positive.

I haven't disclosed BP, but as Saji-san, you said is not that off the mark. So excluding Forge, there will be double-digit growth in profit and about 13% is the total.

So 3% is what I have derived by subtraction.

But in terms of top line, in terms of percentage, what would be the percentage that you're expecting for CDMO growth this year?

Well, there will be a strong growth, especially in Europe, and India that is related to Europe is expected to grow strongly. So overall, there will be steady growth that has been incorporated, but not double digit growth.

While, we have not disclosed that.

And then the share buyback and headquarter building and land sale. So bidding has yet to be done.

So there is some assumption incorporated, but the details have not been disclosed yet. I suppose there is a large amount of cash generated, then we'll consider shareholder return in a more agile manner and proactive manner.

So for this JPY100 billion decision, so the JPY35 billion cash inflow based on the base price or standard price has not been incorporated. Is that correct?

It has been incorporated to some extent, but we cannot disclose the exact amount. When the bidding is actually done, then there will be finalized price, but there is certain assumption that has been incorporated.

Saji-san, thank you for your question. Let's move on to the next one.

From UBS Securities, Ihara-san.

This is Ihara from UBS Securities. I have two questions.

The first one is about tariffs. Regarding direct impact, you were saying that you're not expecting much.

So can you walk us through the details of that? And for indirect impact, there may be some impact, I presume.

So as the tariff discussions are underway regarding ABF or CDMO order trends or any changes in passing on prices, have you been feeling any changes so far? And if you have a worst-case scenario, I would appreciate it if you can share it with us.

Also, to be honest, the macro environment is something you are not able to control. But because you're not able to control it, you need to well manage your business portfolio.

So for ABF and CDMO, even if the businesses were to decelerate, that JPY180 billion of business profits, I believe, can be achieved by growing the seasonings and foods business as well as cost cutting. Is that how committed you are to this business profit guidance?

That's my first question. My second question is regarding the plan for seasonings and foods.

For domestic, price increases are likely to expand even more, but there will continue to be a drop-off in volume. And for overseas, your plan says that you're going to grow volume even more.

So what has changed comparing this fiscal year and last fiscal year that will enable you to grow top line this fiscal year? Please share your views on this.

Thank you very much for your questions. Regarding your first question about tariff impact.

For our company, historically speaking, our overseas subsidiaries are strong. So in the U.S., for example, Frozen Foods, Ajinomoto and the amino acids business are underway.

We manufacture within the U.S. and sell in the U.S.

So it's locally produced and consumed. Of course, some products are exported.

However, the tariff impact on a group-wide basis is not that substantial. So that is why we believe the direct impact is negligible.

Regarding indirect impact, on the other hand, last month, in the Nikkei was covered about fiscal '25. The tariff impact was going to be a JPY28 trillion impact according to a survey by IDC.

And if server network investments are stagnant, that may impact the sales of ABF. And for the CDMO business, we are expecting some impact from tariffs.

But like I explained earlier, for Forge, we manufacture in the U.S. And in Belgium as well as in India, we produce as well.

So all we have to do is ship from an appropriate location. Regarding changes in the macro environment and how we respond.

Whatever kind of environment we are in, we want to ensure that we are able to well supply, and we are able to well supply, whether it be electronic materials or CDMO. And of course, if global demand drops off, we believe still food will be a business that will continue to be stable.

So we would like to stay committed to our business profit expectations. And for seasonings and foods in the overseas business, we will be proactive in introducing new products, and we will focus on premium brands like we do in Japan and also add more new values in our new product launches.

So this will be done in a proactive way. So overall, volume is likely to grow.

And because of inflation, we would like to ensure unit prices increase as well. That's our strategy.

So, if Maeda-san has anything to add for the first question and if has Masai-san anything to add for the second question, please go ahead.

Well, Ihara-san, thank you for your question. Well, Mr.

Nakamura pretty much answered your question. But for the specific businesses, there are some products that we ship to the U.S.

and ship to China from the U.S. So for individual products, we are responding to what's happening with urgency.

But we do have advantageous businesses as well, where we locally produce and consume. But basically, we will handle the situation with agility.

We often talk with people from the market, and we do understand that policies tend to change from time to time. So we don't want to be too reactive.

That's the consensus we have reached at this point in time. Masai-san, do you have anything to add?

This is Masai speaking. Regarding your second question, I would like to add some comments.

As Mr. Nakamura said, it's exactly as he said.

And just to add a few more commentary, mainly in the ASEAN region, for fiscal 2024, the performance was great. However, in fiscal '24, there were some negative things that happened as well.

They were such as in the Vietnamese market, competitors advanced into the market. So it was a harsh environment.

And for fiscal '25 solutions have started to work. So good things -- good parts of the business should grow even more and the negative trends that we saw and addressed should improve.

So that should be an add-on to what we did in fiscal '24. For example -- so the Vietnamese market is symbolic in explaining the situation we were in fiscal '24.

Just one thing about tariffs. I would like to ask a follow-up question.

So for direct impact, you were talking about positives and negatives. So should we think that it's a net positive or -- and indirectly, currently, for the CDMO business, if customers are not investing as much into the pipeline?

Or are you seeing any stagnant trends in orders for the ABF business? Have you not felt that happening yet?

This is Maeda speaking. Thank you for your question, Ihara-san.

As you said, for whether it be CDMO or ABF businesses in the following month or in three months' time, we're not going -- expecting that something is going to happen immediately. If we see an economic slowdown or stagflation, in two or three years' time, there is a risk that we might see a deceleration, but we don't think that we're going to see a sudden change in two or three months or in six months.

So far, we haven't been seeing any signs of that happening. Thank you very much.

Thank you very much, Ihara-san, for your questions. Moving on to the next question, Goldman Sachs Securities, Mr.

Miyazaki-san, please.

From Goldman Sachs, Miyazaki speaking. I have two questions.

Firstly, it's about the actual results compared to the modified forecast, there's a downside. What was the factor behind this?

Can you share that with us? And more specifically, glass, Frozen Foods and Bio-Pharma Services & Ingredients stand out.

But is it derived from structural reform? So is it the onetime downside figures or to look at this from the opposite side, is it going to be an improvement factor or you just simply have not been able to achieved this target?

So can you explain more about the background for this underachievement compared to the target in your results? That's my first question.

And second question. Seasonings and foods was mentioned earlier.

And as you showed on the screen, the appendix Page 3 by country, the local currency sales are shown. And from January to March 3% for Indonesia and 1% for Vietnam and 24% Thailand, 3% Vietnam, 2% for this 12 months.

In the new fiscal year, how much recovery can you expect in each of the countries? And what are other reasons behind that?

Those are two questions.

Thank you for your questions. For your first question about actual results.

For Frozen Foods, the raw materials cost increase and ForEx impact had the effect in a decreased profit and revenue. So there was an under shipment.

But in 2025, we are already increasing the prices. So we're aiming for a recovery.

[indiscernible] will add more. And as for Bio-Pharma Services, the planned CDMO shipment has been delayed to the following fiscal year, so there was some downside.

And as for the major countries, what will be the current status in the fiscal year well, we are planning to grow more than the current fiscal year. So Masai will add more, [indiscernible]?

As for Frozen Food, what is the background behind this under achievement, as Nakamura said earlier, in Japan, the raw materials cost increase and ForEx were the major reasons to this by increasing volume and the reducing cost, that was the measure to respond to this, but we were a bit late coming in, but we expect this to recover. But in the U.S.

the structural reform expenses were posted. So this can be seen as a onetime factor.

That's all. I'm sorry for the second question, Masai will answer the question.

I'm sorry.

So as posted here, major countries, what we call five stars, the growth rate remains strong. So one of the major factors is that in terms of sales, we're expecting the same pace as the previous years.

But good news, one good news is the raw materials and's side ingredients. The prices are becoming stabilized.

So that's how we have come up with this through this calculation, and this is what we have come up with this estimate.

As for the second question, 3% for Thailand and the 2% for Vietnam. If that remains the same, then it seems a bit weaker.

Maybe you can have a upper single-digit or lower double-digit percentage? Is that what you're expecting to see?

And thus for Frozen Food, there is a sale of Hayward plant business. And in terms of business profit, are you posting this as a loss?

And as for Bio-Pharma, Althea sale, has it had a negative impact in the business profit level? Or is this because -- only because of the shift in the shipping timing?

Well, let me answer about the Thailand question. As for Thailand, in ASEAN countries, Thailand is the largest one.

The product mix is quite complicated. And therefore, honestly speaking, Thailand has a very positive factors.

For example, instant noodles, raw materials. As raw materials are going down in prices, but palm oil is a bit higher.

So it's a bit complicated. But for other countries, the cost structure is more simple.

So that's why you're seeing what you're seeing. So as for Hayward plant business or the profit decrease, I think half and half is what you should look at.

So the compensation for restructuring expenses. So those expenses really incurred.

And also, there's an asset impairment in the sale of the business. So those two factors are on evenly divided basis.

Thank you.

As for the health care and others, I think you're asking about Page 7. The difference between 111 and 74.

We are not disclosing the breakdown. But what is more impactful is, as Nakamura said, it's the timing of shipment.

It's not just a midsized molecule, but small molecule in Europe was a bit more than expected and also structural reform is the second one, including Althea in quarter four, the structural reform-related business profit level expenses were incurred. And this was at the peak of the deals.

So there was a burden imposed on the business side and there was some underachievement there. And in March, foreign exchange rate has fluctuated and changed.

If the yen depreciates, then in functional materials, we see the loss side, but for us, CD in North America, it's more upside. But in 2025, there will be a slight increase -- impact, but it's going to be minor.

Thank you.

Miyazaki-san, thank you for your question. We'll move on to the next question.

Igarashi-san from Daiwa Securities, please.

I'm Igarashi from Daiwa Securities. I have just one question.

For the CEO message in the end, as you show in the middle, Bio & Fine Chemicals is going to drive your performance this fiscal year. I think this is a key part of this fiscal year.

Apart from this business, will there be other areas that we can look forward to? You talked about around JPY100 billion of share buybacks.

You talked about Althea as well as the sales of the headquarter property, which are things you have been considering from the past, but we've been seeing a series of positive news. So for this fiscal year, with agility, can we expect more progress in your restructuring efforts?

Thank you for your question. For Bio & Fine Chemicals and growth prospects, for Functional Materials, this fiscal year, we're expecting a substantial improvement, and we're expecting that next fiscal year will be favorable.

And for Bio-Pharma Services, finally, the structural reform efforts are over. So we do believe that we can grow it substantially apart from that.

Regarding contributions from this as a business, we're not sure yet, but there's going to be COP30 in Brazil this year. And towards this event, amino acid or feed that reduces greenhouse gases that come from the burping and from cows has already been certified in Japan.

So we believe that we have heard about an announcement that has been made regarding an agreement and partnership between Brazil and Japan. And in order to recover deteriorated farmland, we have decided to join a project regarding fertilizers.

So in this way, we are going to be engaged in these businesses or projects. So we hope that we'll be able to make substantial progress this year in generating economic value and environmental value.

Let us move on to the next question from JPMorgan Securities, Fujiwara-san, please.

Fujiwara from JPMorgan Securities. There are two questions.

First question. Earlier, cash generating power was mentioned.

Capital -- working capital, it seems to be improving. In terms of CCC, there has been improvement.

So as raw materials costs remain high, there is improvement that's impressive. But most specifically, what other actions you have taken?

And going forward, is there going to be a further improvement in CCC? Is there any target that you have?

And second question is a quick question. So earlier, you talked about Bio-Pharma shipment timing, shift delay, and this is going to be the next quarter.

But in the last fiscal year, in the Bio-Pharma Services, profit was about six -- was down by JPY6 billion and part of the factors were onetime factors. But in the first quarter, of the JPY6 billion, majority would be recorded in the first quarter, that's what I'm guessing.

But that could be too large. So is that correct understanding?

It's just a short term question.

As for the cash generation and working capital, I talked about inventory reduction that we have taken and accounts payable and accounts receivable. In terms of those in finance, there were some strategic movements and Mizutani will give you more details later.

And for second question, as for Bio-Pharma, first quarter effect, how much positive effect can you expect? Maeda will take that up.

Thank you very much. As for JPY6 billion, if JPY6 billion comes in, then that will be quite helpful.

But as we answered to Miyazaki-san question. JPY3.7 billion was underachievement in Q4.

And part of that was because of timing of the shipments. So we're not expecting JPY6 billion recorded.

Is it going to be in Q4 exactly or is there something that will take more time? We have yet to see.

But for the timing delay, we can recover that in Q1, but that will be only part of JPY3.7 billion. Now as for the cash generation.

First of all, what is most important is that in ASV indicators, EBITDA margin is the most important. And as you can see on Page 23, so every year, there has been improvement.

And in ASV indicators, EBITDA margin is the most important indicators in all subsidiaries and all business units, they are working on this. And twice a year, we get together to have discussion and we just learn from each other's best practice.

That's how we have been making improvements, firstly. And secondly, that's not just that, but SCM head and finance head talk to each other.

And then in supply chain, how you can improve CCC is what they discuss. And then we see some results coming out of that.

So that's how it was reflected in fiscal 2024 and also incorporated in fiscal 2025 plan. And also, as CCC improves if the sales increases, then there will be always benefit that you can enjoy.

So in all subsidiaries and business units, we would like to continue to work on this.

So in this fiscal year, the working capital improvement of JPY20 billion could be expected or cash generated of JPY20 billion as was in the last fiscal year?

Well, we expect more, actually.

So you are expecting more than you have achieved in last fiscal year?

Yes.

Fujiwara-san, thank you for the question. Let's move on to the next question.

Miyake-san from Morgan Stanley MUFG Securities.

This is Miyake from Morgan Stanley. I have a question about the Functional Materials business.

First, our Q4 sales compared to Q2 and Q3, sales was slightly lower and margin was slightly lower. Although you were able to show year-over-year improvements, but compared to the good Q2 and Q3, it looks like there was a dip.

And also for the new fiscal year, you're expecting 11% growth, but with lower margins. That's your assumption.

So can you talk about what's going on? If you can add more flavor, that would be great.

So by improving product mix, is unit prices improving or margins improving, which -- what was -- you were explaining before. So I was thinking that over the medium to long term, these things should continue to be the same.

But because of recent events that have been occurring, have you been feeling any changes? Please provide us with some commentary.

Thank you for your question. Regarding electronic materials or Functional Materials and its Q4 business you've pointed out that it was lower than other quarters.

But actually, in April, performance has improved again. And I think it's because of the order timing of clients.

And compared to 11% sales growth, you were saying margins were lower, but we have explained that operations at a new factory is going to start. So D&A has -- is expected to kick in, leading to lower margins.

But overall, we do expect double-digit growth to take place. But for margins, it will be impacted by depreciation.

Maeda-san, do you have anything to add?

Ms. Miyake, thank you for your question.

Well, after it's hard to follow what Mr. Nakamura said, especially because of functional materials.

Well, April is doing well. And because of calendar timing, the final shipment in December was quite big.

When you look at volume momentum by customer, we haven't been seeing a deceleration and unit prices are steadily increasing. So, I don't think you need to be concerned at this point in time.

And for margins, like Mr. Nakamura just said, depreciation is going to kick in because of capital investments.

And also in this industry, it's hard to acquire personnel. So we need to spend more in intangible assets so that we could raise our competitiveness.

So, we are planning to spend more SG&A so that we can be well prepared.

Well, I understood your comments very well. One more thing I would like to ask about is in your plan, are you assuming that the current environment is going to persist, have you accounted for a more conservative environment?

Not in particular, we haven't accounted for any conservative environment. And WSTS, the latest data came out in December, but for Logic IC growth, they are -- they have announced 16% growth.

So although tariff developments are uncertain, because of these latest trends as well as because of our customer plans, we have put together our plan in this way.

Thank you very much for your question, Miyake-san. Let us move on to the next question.

Nomura Securities, Morita-san, please.

Morita from Nomura Securities. I have two questions.

First question is about Trump administration's policy, how you approach that? In terms of short-term impact, there's not much.

That's what you said. But in terms of CDMO you have to increase the local production ratio, that is what they are asking you to do?

And also, semiconductor tariff is quite uncertain. So given these changes in environment, in terms of mid- to long-term strategy, is there any plan to change that?

In terms of CDMO, the competitors are making drastic capital investments in production, so with this foreseeable changes in the environment is there any long-term initiatives that you have in mind currently, especially for nonfood businesses? That's my first question.

And secondly, the food overseas business. Well, plus 6% growth rate is, honestly speaking, quite impressive quite high.

But in my image, maybe lower single-digit growth was what I have been expecting. So in this 6% growth rate, is there any tangible results that you have seen from your initiatives?

You talked about Vietnam earlier. So what I'm asking about is that, is it a onetime phenomenon that you saw 6% or you have raised the bar for mid- to long term.

So in next year after next, maybe mid-single digit or upper single-digit growth rate is what we can expect or is it because of just Vietnam business in the new fiscal year? Is that a onetime factor?

Thank you for your questions. As for our approach to Trump administration, as Maeda said, the policies have not been finalized.

And in terms of semiconductors, as you know, in AI and in servers, the big major companies are all in U.S. So it's different from the automotive industry.

So like in tariff on smartphones, I don't think that much tariff would be imposed in those areas. That's what we are guessing.

So just closely watching whether there will be a major impact or not. In CDMO, we produce in the U.S.

And for amino acid for pharmaceutical use, the production is made -- it's done in U.S., and it can be done in Belgium and India. So there's not much effect that we're expecting.

But in terms of mid- to long term, as we have done previously, if we can produce in the U.S., we would continue to do so using local materials, maybe that will be accelerated, but we have to closely watch whether -- to what extent the policies will be stabilized. As for Food growth in overseas, the premium new products should be launched.

And also in Vietnam, as Masai said, Ajinomoto has been pushed back by competitors, but we are taking actions against counter feed products together with authority. And with the active promotion, we can move forward.

So 6% is a very stretched target, but we would like to work hard to achieve that. Is there any additional comments?

Maeda-san or Masai-san?

Well, as for Food business, Masai will make some additional comments. As Nakamura said, well, if I can add more, there are two.

Firstly, the regional geographical strategies. Currently, as you saw -- as you see, the five-star major countries that was shown.

But there is also frontier development. So for those five stars, these are the growth rates that we're looking at.

But for frontier regions, in ASEAN, there is some political uncertainty, Myanmar, Cambodia, one of those and Laos, we are selling from Thailand and Bangladesh, there's strong growth. And in Latin America, Peru Ajinomoto is taking the central role, like Chile and Colombia, those neighboring countries are fast -- growing fast.

So those are the new frontier that is growing. And another thing is that what we call orchestration in our company.

So in each of the countries, we are doing businesses and our Ajinomoto's Food business is actually taking on challenges to the food culture in each of the countries. So the subsidiaries is doing their business for their own countries.

But we are now trying to collaborate with doing best practices and also solving problems with collaboration. One example is the instant noodle business, Ajinomoto is doing in Thailand, Peru and Poland, and they have been doing their own businesses independently.

But by having collaboration, we can solve common technological challenges and also take some common sales promotions, and they are actually producing results. In instant noodle sales are growing.

And this has not been done previously, but this will be further accelerated in this fiscal 2025. So we seem to be quite bullish, but that's what we are going to do.

So CDMO and semiconductor impact, that's what you're asking about. So we're not in a position to refer to the policies of U.S., but as we talk to the industry people, the policies are coming out quite abruptly and they keep changing, and that puts us in a very difficult situation.

But we are actually selling semiconductor substrate. So there's an international long value chain.

And in the pharmaceutical business, there's international collaboration, and this is very close to people's daily lives. So the one -- compared to the automotive business where a single major company produces one product for the first time in several years.

But I think the administration is more sensitive to our products. So I believe that their policies will be at a reasonable level probably in the end from the -- before the midterm elections.

So I don't think there are so many companies that are considering drastic changes in terms of geographic locations and others.

As for CDMO customer geographic structure, can you give us some specifics like what will be the sales to U.S. customers in CDMO?

Well, in particular, as for global major companies in Japan, Europe and India, those are the countries that we ship out from. But we are not in a position to refer to the final customers that the products are sold to, but global major companies, Japan, Europe and India are the countries that we are shipping out from.

So for mid- to long term, you're just closely watching the situation. Yes, that's what we have to do.

Morita-san, thank you very much for your question. We are available for additional questions.

You could ask your second question, if you would like. Thank you for the question.

From SMBC Nikko, Furuta-san.

This is Furuta from SMBC Nikko. Regarding your ROE target, for fiscal '25 plans, excluding Forge, your plan is 19%.

And you originally had a target of 18% ROE. And I think you were commenting that it was a challenging target.

But for this fiscal year, do you still feel it's a challenging plan or do you think that the probability of achieving it is higher? Can you talk about the opportunities or risks associated with achieving the ROE target?

Thank you for your question. For ROE for the numerator, we would like to ensure that we steadily grow net income.

And for the challenging 19%, excluding the Forge acquisition impact, as well as some extraordinary factors like the headquarter property sales that we have been accounted for by a certain degree. So we would like to achieve this target.

And even without the extraordinary factors, we would like to strive to grow the business and make it stronger so that we could reach our longer-term target as well. Does that answer your question?

It does.

Thank you very much for your question, Furuta-san. Let us move on to the next question, Watanabe-san from Citigroup Securities.

Watanabe from Citigroup. I'd like to ask about functional materials.

At TSMC and the U.S. hyperscalers earnings call when I'm listening to that, from 2025, there will be no dump in AI demand and server demand was very strong.

Those are the strong comments. But as for the 2026, there is not much clear stats that have been presented.

So whether there will be upside or downside, we don't know yet. But if those are the conditions then your Functional Materials business demand and sales of course, you would have some response earlier than that.

So what will be the time lag? What will be the time shift?

For example, Functional Materials ABF is really at the upper stream of the value chain. So at what timing, there will be a response?

And the second question is a follow-up on Miyake-san's question. You are making investments in intangible assets.

That's what you're trying to do. Of course, talent acquisition is quite difficult in any industry, especially in semiconductor industries, but investment in intangible assets, what are you referring to specifically?

That's my second question.

Thank you for the questions. As for the first question, functional materials.

No company -- the major customers, and we have close communication with them. And on a regular basis, the long-range plans presented from the customers, and there is always a regular update and regular revisiting.

And sometimes there is a major change, but there are some cases where there's not much change. So there's a long-range plan that has been reviewed with the customers on a regular basis.

So there could be some time lag, but we are responding quite quickly so that we make sure there is no supply shortage, so we have the inventory and enough to do that. And as for intangible assets there's talent and technologies.

As you said, of course, enhancing talent is given. But investments in R&D and technologies are done not just in Functional Materials, but in all R&D areas.

And also, we are investing in brands like corporate branding and product branding and making investments in marketing. So that -- those are the intangible asset investments that we are conducting.

Yes, so with the cross communication with customers, you have come up with this sales target. Is that what you're saying?

Yes.

Thank you for your question Watanabe-san. So we are drawing close to the end of the webinar.

Does anyone else have a question? Thank you for the question.

From Daiwa Securities, Igarashi-san.

This is Igarashi again from Daiwa Securities. Well, one thing I would like you to tell me about in detail.

You've been talking about the delay in Bio-Pharma Chemicals and I'm not aware about the basics. So please entertain me.

Do these types of delays happen frequently in this sort of business or is this simply something where you were planning those shipments to happen this month, but it was delayed to next month due to -- or is it because of changes in customer demand or problems in operations? And if everything from Q4 is not going to be recognized in Q1, is it going to take place over the longer term or have you lost an order?

That's my question.

Igarashi-san, thank you for your second question. For Bio-Pharma services, it's basically the CDMO service.

So it's outsourcing. So delays do occur due to customer reasons.

So Maeda-san will talk about the details. As you rightly said, for consumer or food business, compared to that, every month, sales from this business is not level.

We recognize a significant amount of sales once every several months, depending on the nature of the agreement we have with the customer, and that one shop sales can be a substantial amount. So there are times where we see a month or a two- or three-month delay and when it's recognized.

And to answer your question, our understanding is that we have not lost an order and we have already confirmed when this is going to be delayed until. So it's not as if we face any huge problems or we lost an order or it's not about a structural issue either or it's not about the market performing poorly.

Thank you very much, Igarashi-san. Now we would like to close Q&A session.

Thank you very much for your questions. Now last, but not least, I'd like to ask Nakamura to give us closing remarks.

Everyone, thank you very much for your attendance. Ajinomoto Group's continued corporate value enhancement, we get together and think properly and think well and do well.

That is what we're going to do. And I'd like to ask for your continued support, and thank you very much for your presence today.

That concludes our earnings call briefing. Thank you very much for your attendance.

Thank you.