I'm Morita, Global CEO. Thank you very much for taking the time to join us today despite your busy schedules.

First, I will provide an overview of our full-year results for fiscal 2025 and our business plan for fiscal 2026. Amidst a rapidly changing business environment, including the impact of U.S.

tariffs, we positioned fiscal '25 as the year of emergency and crisis management. Following the '24 MBP roadmap, we focused upon defensive activities such as business rebuilding and business cost reductions, concentrating our efforts on strengthening our fundamentals.

We positioned fiscal 2026 as a crucial year for transitioning to growth with quality, building upon the foundations established thus far and intensifying our offensive activities. We will steadily advance our progress, ensuring the reliable execution of key planned initiatives to evolve the entire group into a group-oriented organization.

Our aim is to reclaim the position of world's number one by our 100th anniversary in 2031. I will now explain the full-year results for fiscal year 2025.

By swiftly responding to changes in the business environment, such as the impact of U.S. tariffs, and focusing upon global optimization and reinforcing our business quality, consolidated global revenue reached ¥4,429.5 billion, with adjusted operating profit at ¥493.7 billion.

This represents a year-on-year increase of 2% or ¥10.4 billion. Profit attributable to owners of parent reached ¥327.3 billion, an increase of 15% or approximately ¥42 billion year-on-year.

This growth was driven by the increasing adjusted operating profit combined with reversal effect of uncertain tax positions. Dividend is projected to be ¥230 per share, representing an increase of ¥20 compared to the previous year.

The impact of U.S. tariffs reduced profit by approximately ¥25 billion.

However, through a combination of measures, including optimizing supply chain management, we were largely able to minimize this effect. Business rebuilding was largely completed as planned.

Business cost reduction activities also generated effects of approximately ¥72 billion in fiscal '25, contributing to improved profitability. Next, a summary by major region.

First, North America: Due to sluggish demand, sales declined by 3%, but the adjusted operating profit margin improved by 1.5 percentage points year-on-year to 11%, resulting in increased profits. This was driven by rebuilding and reorganizing effects, including optimizing truck and bus tire production bases and fixed costs, alongside steady progress in the PS multi-brand strategy and the TB tire solutions business.

Next, South America: Profit declined year-on-year, barely achieving breakeven. This was due to the expansion of low-end imports and adverse impact of lower conversion cost efficiency caused by decreased exports to North America.

We will continue our efforts to improve profitability. In Europe, the adjusted operating profit margin reached 5.5%, an improvement of over 2 percentage points from the previous year.

We achieved profit growth alongside strengthening our business foundations. This was driven by cost optimization through business rebuilding, primarily in the truck and bus tire segment, improved profitability in the retail business, and enhanced product competitiveness in passenger tires.

In Asia, Oceania, India, and China, revenue decreased by 2% due to regional currency effects and the impact of sales strategies prioritizing profitability for TB tires. However, adjusted operating profit reached 11.5%, maintaining a robust business structure through a rebuilding of the Thai operations and steady growth of the Indian business.

Regarding business rebuilding, we have tackled challenges head-on and made steady progress throughout the 21st and 24th MBPs. During stage two, implemented in 2024 through 2025, we advanced the rebuilding of our tire operations in the U.S.

and Europe, diversified product business, and in-house manufacturing businesses, alongside streamlining our operational structure in Japan and Asia. This phase was largely completed as planned.

We will now transition into a growth phase while maintaining the robust business structure strengthened through these initiatives. Next, I will explain fiscal 2026 business plan.

First, regarding our management policy: As I mentioned at the outset, this year marks a crucial transition from business rebuilding to a stage of growth with quality. If we rush, act hastily, or pursue unrealistic growth, we will risk undermining the robust business foundation we have built.

Therefore, the entire group will carefully align the pace of this transition. We will establish a solid growth foundation within this year, and united as one company, striving towards regaining the position of world's number one by our 100th anniversary in 2031.

Our key growth priorities will center on three pillars: delivering attractive and competitive products and manufacturing excellence; the strengthening our global portfolio, our core competitive advantage; and enhancing our brand power. Through this, we will achieve growth with quality.

I will now outline our approach to each key challenge. First, attractive and competitive products and manufacturing: As a rubber and tire manufacturer, this is naturally our most vital element and occupies a central position in our growth strategy.

Building upon our robust technological capabilities, we will achieve growth by focusing on strengthening product appeal and manufacturing prowess through continuous new product launches, while also enhancing our distribution channels. In fiscal year 2026, we plan to launch over 25 new passenger tire products globally, approximately double the average of recent years, to expand sales.

For truck and bus tires, we will also plan to launch over 10 new products. Alongside the continuous development of an attractive product portfolio, strengthening our manufacturing capabilities through productivity enhancement measures, such as BCMA, will be key to future growth and competitiveness.

Achieving these goals necessitates further strengthening our global technological foundation. We are preparing to introduce a new executive structure effective 24th of March, whereby four of the seven executive officers will be technical specialists: Chief Innovation Officer, responsible for materials and advanced technology development; Chief Product Officer, responsible for product development; and Chief Manufacturing Officer, responsible for manufacturing.

These three executive officers will report directly to the Global CEO. Together with the West CTO, who oversees the technology centers in Akron, USA, and Rome for Europe, these four executive officers will solidify our global technological foundation.

Business responsibility will remain under the dual executive structure of the East CEO and West CEO. Together with myself, all seven executives will unite to lead the Bridgestone Group.

Regarding resources, we plan to increase resource allocation in a disciplined manner, with both R&D expenditure and capex exceeding the levels of the past 2 years. Next, portfolio management: In line with the direction set out in the '24 MBP, we are advancing improvements to our earnings base through portfolio strengthening.

For each business, product, and segment, we will maintain this direction in the 2026 business plan as well. This chart shows the profit growth rate for the 2026 business plan with fiscal '23 set as 100.

By business, we are transforming from single-product sales to solution-based business. By product portfolio, we are further strengthening our traditionally robust TB business foundation.

By segment, we are making steady progress in significantly improving the profitability of our European operations and achieving solid profit growth in Asia and India, which are driving group growth. This year, we will continue to advance the strengthening of our business portfolio in line with the '24 MBP, steadily executing our plans to establish a growth structure underpinned by quality.

The third pillar, reinforcement of brand power, will be promoted globally with a focus on motorsports activities. In the United States, an important market for our business, we are continuing to strengthen our activities as the exclusive tire supplier for the Firestone brand in the traditional INDYCAR series, which boasts an average audience of over 1 million viewers per race.

In Japan, we will continue to actively promote activities such as Super GT. Furthermore, from the latter half of this year, we will be returning to the FIA World Championship for the first time in 15 years since F1 and to participate in Formula E as a sole power tire supplier.

Based on the premise of supplying safe and reliable racing tires even under extreme conditions, we will work together with our employees, customers, and partners to develop tires with a low environmental impact and optimize our supply chain, thereby promoting sustainable racing activities and enhancing our brand power. Based upon the above, guidance for the fiscal year 2026 projects increased revenue and profit, with sales revenue of ¥4.5 trillion, adjusted operating profit of ¥515 billion, and net profit of ¥340 billion.

We will focus upon growth, particularly in the replacement tire segment, while steadily realizing the effects of ongoing business cost reductions, enhanced productivity improvement activities, and business rebuilding. The impact of U.S.

tariffs is projected to reduce profits by approximately ¥55 billion for the full year. While some effects cannot be directly offset, we will strive to achieve the planned increase in revenue and profit through global supply chain optimization and group-wide cost reduction activities.

Regarding dividends, as planned in the '24 MBP, we will increase the amount by ¥10 per share compared to fiscal '25, amounting to ¥125 per share after the stock split. In fiscal 2026, we will continue to place great importance on maintaining harmony with all of our stakeholders.

Guided by our mission of serving society with superior quality, we will continue to contribute to all stakeholders—employees, shareholders, customers, partners, and suppliers, and local communities and the society—through sustainable growth. I sincerely ask for your continued support throughout this year.

This concludes my presentation. Thank you very much for your kind attention.

I am Hishinuma, in charge of finance. I will mainly explain the financial figures.

FY '25 full-year consolidated results: revenue, ¥4,429.5 billion; adjusted OP, ¥493.7 billion; and profit attributable to owners of the parent, ¥327.3 billion. Excluding FX impact, revenue and profit increased year-on-year, and adjusted OPM improved by 0.4 points to 11.1%.

Against November plan, we achieved the increase in both revenue and profit and met our target. ROIC improved by 0.2 points year-on-year to 8.3%.

In addition to the increase in adjusted OP, improvement in the cash conversion cycle through leaner product inventory also contributed to ROIC improvement. I will explain the breakdown of adjustment items later.

Analysis of adjusted OP versus previous year: We offset profit declines from higher raw material costs and unrealized inventory through price and mix improvements, and largely offset U.S. tariff impacts through various measures.

Through business rebuilding and global business cost reduction, we strengthened our business quality and delivered year-on-year profit growth despite yen appreciation headwinds. Results by segment: All segments achieved a higher profit and profitability.

In Japan, revenue increased due to expanded replacement tire sales domestically and steady performance of ultra-large OR. With higher sales volume and improvements in price and mix, the profit increases and the profitability improved by 0.4 points.

Americas: In North America, through expanded replacement TB tire sales and improvement in business quality through business rebuilding, profit increased year-on-year with better margin. In Latin America, the segment finished in the black overall.

In Brazil, although performance improved year-on-year in the second half through rebuilding and operational improvements, the business environment remains tough. In EMEA, performance continued to improve, driven by expanded sales of premium tires, mainly HRD, in the replacement PS market in Europe, along with steady progress in business rebuilding.

Results by product: For PS and LT tires, although expansion of premium tires such as HRD and product mix improvement continued throughout year, profit declined year-on-year due to the cyber incident in North America and struggles in Latin America. For TB tires, replacement tire sales in North America remained steady.

The effects of production base reorganization mainly in North America and Europe materialized, resulting in year-on-year profit and big margin improvements. In Specialties, while sales of ultra-large OR remained steady and B2B solutions expanded, profit declined due to lower AG sales and timing impacts from raw material index price adjustments for OR.

We continued to secure high profitability exceeding 20%, supporting overall consolidated performance. In the diversified products business, we continued steady improvements.

Although this year included a one-time gain from asset sales, the profit increased year-on-year even excluding this effect. Next, results by business portfolio: Given a tough situation, the tire business secured an adjusted OPM of slightly less than 13%.

The solution business, which is a growth business, achieved increase in revenue, profit, and profitability. In particular, commercial B2B solutions achieved a profit margin exceeding 11%.

Adjustment items: For the full year, adjustment items resulted in a loss of ¥112.5 billion. Key breakdown is as shown.

We recorded business rebuilding-related expenses mainly in Europe, North America, and Latin America, and have largely completed business rebuilding as planned. BS and cash flow status: Total assets increased slightly from the end of the previous year to ¥5,747.7 billion, partly due to FX impact.

Inventories of goods and finished products decreased from the previous year year-end through continued and thorough lean inventory management. Free cash flow was an inflow of ¥435.5 billion.

While executing growth investments, we improved operating cash flow through tighter working capital management, delivering ¥141.7 billion year-on-year increase in cash inflow. Regarding the capital policy announced in February, we completed the planned share buyback and debt financing as scheduled.

All of acquired shares have been fully canceled. Next, FY '26 guidance.

For FY '26 guidance, revenue: ¥4.5 trillion, up 2% year-on-year; and adjusted OP: ¥515 billion, up 4% year-on-year. We expect adjusted OPM to improve by 0.3 points year-on-year to 11.4%.

While continuing to strengthen our business quality, we will shift toward growth with quality. Next, I will explain the analysis of adjusted OP for FY '26 versus previous year.

We expect year-on-year profit growth by offsetting inflation and U.S. tariff cost increases through improved raw material, price, and mix spreads, business rebuilding returns, business cost reduction, and growth with quality.

Regarding operating expenses, beyond inflation-driven cost increases, we will strategically allocate resources including for brand enhancement to accelerate growth from FY '27 onward. Next, guidance by segment: We aim for higher revenue, profit, and profitability across all segments.

In our second home market, APIC, we plan higher revenue and profit through expanded replacement tire sales in Thailand, Indonesia, and India. In the Americas segment, we will accelerate replacement tire growth, deliver year-on-year revenue and profit growth, and lift the margin by 0.6 points to the 10% range.

In the EMEA segment, we plan continued profit and margin improvement following last year. By steadily capturing business rebuilding effects in Europe, continuing to strengthen business quality, and expanding replacement PS tire sales and mix, we plan 2-point margin improvement.

While we plan increases in revenue and profit for FY '26, I will also explain the comparison with FY '26 targets in the '24 MBP. Revenue fell short due to environmental changes such as reduced demand and increased low-end imports.

13% adjusted OPM and 10% ROIC targets were not met due to internal and external factors, including U.S. tariffs, inflation, Latin America, and deterioration in the diversified products business.

Even under such circumstances, we continue to thoroughly implement business cost reduction and business rebuilding to strengthen our business quality. Regarding shareholder returns, we expect to implement dividends as planned in line with the target level of ¥250 per share.

In response to changes in the business environment and revision to our initial capex plan to achieve our desired mid-term BS, we will execute share buyback flexibly: ¥150 billion in FY '26 and ¥450 billion in total over the 3-year period from FY '24. Finally, the financial strategy and shareholder returns.

Capital allocation overview: As sources of capital allocation, in addition to cash inflows from strengthened earning power, we will utilize cash reserves and borrowings, planning approximately ¥2.4 trillion over the 3-year period from '24 to '26 under the '24 MBP. Regarding allocation, while prioritizing sustainable growth and corporate value enhancement through growth investments, there is no change to our capital allocation policy of maintaining an appropriate financial strength and enhancing the shareholder returns.

Although the '24 MBP initially assumed ¥1.4 trillion in growth investments, we have disciplined our investment selection in response to changes in the business environment. As a result, surplus cash has been allocated to shareholder returns and capital policy in accordance with our capital allocation policy.

There is no change to our target cash reserves of approximately 1.5 months of monthly sales. This is a capital policy supporting sustainable corporate value enhancement.

We believe expanding the ROIC-WACC spread and the equity spread through balance sheet management enhances corporate value, and we will therefore improve our capital structure to achieve both soundness and efficiency centered on what is Bridgestone-like. There is no change to our policy of setting our desired mid-term equity ratio at around 55% and steadily and gradually moving toward it.

While maintaining steady capital efficiency improvement and considering further growth investment opportunities, we have decided on a ¥150 billion share buyback and disciplined debt financing. We will steadily and gradually move toward our desired BS.

Finally, regarding dividends: There is no change to our policy of targeting a consolidated dividend payout ratio of around 50% and pursuing stable and continuous dividend increases to enhance shareholder returns and maintain appropriate capital levels. The annual dividend for FY '25 is ¥230 per share as announced last November, an increase of ¥20 year-on-year.

For FY '26, ¥125 per share, an increase of ¥10 year-on-year on a post-stock split basis. On a pre-split basis, ¥250 per share, an increase of ¥20 year-on-year in line with the FY '26 plan in the '24 MBP.

We will continue striving for stable and continuous dividend increase and further enhance shareholder returns. That concludes my explanation.

Thank you very much for your kind attention.

Thank you very much. This is Yoshida from Citigroup Securities.

One question is related to your growth strategy. To regain the position of world's number one, what would you like to do?

In 2026, you mentioned that you're going to increase the number of new products, I understood that. Firestone revitalization, India—what is your idea for these fronts?

The share buyback amount has been reduced, meaning that you are going to allocate more to the growth strategy. Towards the growth, you're going to so seize more for the growth expansion.

What would you like to do for the future going forward? This is my question.

Thank you very much for your question. As for our growth strategy, at the core, we are manufacturer, product and manufacturing are our focus.

When it comes to manufacturing excellence, it has many different assets, but to produce a good products at a lower cost, that is the gist of what we do. As for products, we have the Dan-Totsu technology, and we would like to deliver the higher and quality products to the consumers, and we have a technological capability to enable that, and we are going to enhance our technologies going forward.

When it comes to manufacturing capabilities, recently, including Firestone, multi-brand is our approach, from a premium to the lower end of the product lineup. We are encompassing all these layers, and without these approaches, we are not able to achieve our growth.

Cost competitiveness is the key and our focus in augmenting our product lineup. When it comes to cost competitiveness, earlier, our technological response and the renewed management structure focusing upon technology, materials, and development, and production, manufacturing, these are our three focus points.

We need to work on them all; otherwise, we are not able to achieve growth. Covering all these three areas as one—all the materials, development, and the production—of course, even today we are working across all these areas, but we need to enhance this collaboration.

The materials, the product development, and the manufacturing, we assigned the executive officers, or the officers in charge of these three, and placed them directly under me so that they will be able to produce something good at a lower cost, at a speedy fashion. That is the intention of our review of the executive structure.

Good products have to be produced at the number one cost competitiveness. We still have room for further improvement, and when it comes to investment, R&D, capex, how to produce good products at a lower cost, we would like to focus upon that point more so that we can enhance our competitiveness.

As a result, thanks to that, all the markets that we have not been able to enter into will be opened up for us, and we hope to enter into those markets as well. As for regions, the North America will be the core and the center of our growth going forward.

From the mid-term perspective, India and Global South region, gradually we would like to enter into these markets. A roadmap through 2031, we are working on creating such roadmap, and in that exercise, market and segments are to be identified for us to compete in a competitive fashion and execute our plans.

That is the idea behind our efforts to create the plan. For the follow-up question: revitalization of Firestone, from the middle of last year you started working on that, and what is the achievement so far?

Yes, particularly since the second half of last year, revitalization of Firestone in North America has been our focus, and we have been able to grow the business. I refrain from giving you the specific numbers, but the growth over last year, particularly it has been visible since the latter half of last year, and the next year, well, we'd like to keep this going, and the premium growth for Firestone is our focus, and likewise for Firestone, we hope to grow the business.

What we did last year has actually generated results in the second half, which will be continuing in this fiscal year as well.

Thank you very much.

Mr. Yoshida, thank you very much.

Morgan Stanley, I'm Kakiuchi. Thank you.

This year's guidance difference, referring to the slide number 26, this year's plan, operating expense -¥71 [billion?] .

In your explanation, inflation and resource allocation towards FY '27, having an intention to achieve the growth, and I can understand that, but at the same time, rebuilding and cost reductions, despite those efforts, but you will have the operating expenses increase. Could you give me the breakdown of the ¥71 billion?

Thank you.

This year's plan, I will explain more in details, and Mr. Hishinuma will explain about an operational expenses.

¥497 to ¥515 billion is the targeted profit increase. As a single item, the biggest one is volume, ¥35 billion.

Volume growth, production volume to be increased, that's the center of our growth, so that's incorporated in our plan. Price and mix combined, ¥36 billion.

While the price is increased and the volume to be increased as well, growth with quality. Given the situation of having shifting toward a favorable situation, we try to increase both the price and the volume, we have the strong will to attain this given target.

Necessarily, the sales expenses are incorporated as well. Of course, we have to factor in inflation, but with a strong will, we came up with the plan.

That's a grand policy. Mr.

Hishinuma, could you explain about the details of operating expenses?

As pointed out, operating expense toward next year, 71 negative. As Morita said, for growth, strategic expenses are largely included.

I hope you can understand this. As for the substance, brand enhancement, IT for productivity improvement, it's a necessary investment to be made, that's included as well.

In addition to that, the volume is expected to increase, the variables to be increased as well. In addition, in FY '25, we disposed asset partially, and we've got a reversal to some extent that causes the operating expense increase.

The biggest factor is in inflation. The rebuilding that will be the major contributor for offsetting the increase.

The volume increase lead the variable cost increase, and we allocate in a higher resource for the future growth. I hope this answers to your question.

Understood. Your guidance, Mr.

Hishinuma has been in a position consistently, but Mr. Morita, as a CEO, you are on the full year and it's the first time for you to come up with the plan, is there any difference in the structuring the guidance?

Thank you.

As for the guidance, I discussed with my predecessor, Mr. Ishibashi, and by the summer last year we formulated the basic plan.

Due to the change of the leadership, that does not cause a change of the plan. In MBP, we will shift towards the phase of the growth with quality, we will make sure to achieve the growth in volume as well as the price and mix.

Having said that, the operating expenses, we've got the rebuilding activities, we intended to squeeze a bit, but in order for us to attain volume growth and brand enhancement, there are necessary resource to be allocated. An additional follow-up: As for the processing and fees, as works negatively for even though we see some positive effect out of the correction, this is a plan, then the conventional, the material and the product in the development, the simple volume growth will not be helpful for the processing and fee decrease because we are under inflationary environment.

Unless we increase the investment, we can't produce a high-quality product. Under the new organizational structure—material, development, manufacturing—each technology level to be increased, and those three are combined to make an overall design.

That's the finding on our side. With that based on the finding, we launch a new organizational structure effective from March this year.

Thank you very much.

Thank you. This is Sakaguchi from Mizuho Securities.

Thank you very much. I'd like to ask you one question.

Capital policy in your explanation: You strike a balance with the growth strategy, and I'd like to make one confirmation. Dividend will be ¥250 before stock split, meaning that you are going to achieve the MBP target, but when it comes to payout ratio, 46%, which is lower than 50% target, and the ¥150 billion of share buyback.

Mid-term, the equity ratio of 55%, I know that this has a longer time horizon, but to look at the landing and thinking about the profitability, and you could do more. Until the 31st of August, that is the time you set for share buyback.

The additional activities is also the possibilities. I mainly talking about the growth strategy and the investment, but are they going to make some difference when it comes to capital allocation?

Could you please explain more on this point?

Yes, Hishinuma will respond.

So ¥150 billion of a share buyback program that will be conducted by striking balance with the growth strategy. And 55% equity ratio for mid-term perspective, that is the target we have not changed.

By maintaining this trend, we are going to keep the balance with the growth investment. With that in mind, we set these numbers.

As I explained last year, when it comes to the liquidity, we are going to manage and keep it for the 1.5 monthly equivalent, so that is the way we are going to manage the cash and liquidity. By allocating the resources to the growth investment, if we have the excess cash and liquidity, then additionally, we may consider increasing the return to the shareholders, or we use it for the share buyback.

The 31st of August due date, the buyback will be completed and we are going to cancel that shares. We do not have any particular specific plan by then, but as I mentioned earlier, we are going to make investment for the growth and the growth investment, and still that gives us the remainder of the cash and liquidity, then we are going to return it to the shareholders.

That is our basic stance.

Thank you very much. When it comes to dividend, 50% is just the indicator, and so until then, you are going to continuously increase the dividend payout amount, am I correct?

Yes. As you mentioned, this time this is 46%, lower than our target, but last year and fiscal '25, '26, the ¥450 billion total has been used for share buyback programs.

Basically, we regard it as investment, not just the return to the shareholders, but investment to enhance corporate value by enhancing EPS, which is beneficial for the shareholders as well. That's our thinking.

Looking at the total last year, well, the total shareholder return is not something that we focus upon, but it was 138, and for this year it's going to be 90 for the total shareholder return. We need to look at that as compared to the growth investment, and we try to maintain a good balance.

This is the idea for the capital policy and dividend payout. No major change to your policy, I understood.

Thank you very much.

I'm Takahashi from Nikkei Shimbun.

Yes, we can hear you.

Thank you. Slide 14, 2026, U.S.

tariff impact, ¥55 billion. Previous year, it's been significantly increased.

Based on the assumption of having a full impact on a full-year basis, is that how I should read it? Business cost reduction, you try to mitigate the impact.

Now to what extent is it not possible? Could you give me a sense of the magnitude?

U.S. tariff: As you correctly understand, next year there will be a period doubled.

Rather than having a higher or lower tariff level, but the duration will be longer. Business cost reduction, there are the various initiatives included, I would like to refrain from talking about the impact by each item, but key is a productivity improvement, cost reduction, and digital IT utilized, productivity improvement, as well as an improvement in efficiency.

Through that, we aim at achieving cost reduction. As for business rebuilding,

there will be additional benefit generated. One benchmark is ¥25 billion, this year and next year, additional effect is estimated at ¥25 billion.

Through our corporate effort, we are trying to offset as much as we can.

Thank you very much.

Thank you very much. This is Hata from Toyo Keizai.

Can you hear me?

Yes.

Thank you very much. On page 11, about the capex, I'd like to ask you: So ¥410 billion for this year, you are going to spend more for capex.

Specifically, where would you like to spend this money and where would you like to invest in? Going forward, do you intend to keep this a high level of capex, considering the cost competitiveness enhancement?

Are you going to invest more?

Yes, I'd like to give you the big-picture direction, and Hishinuma will give you details. As for this amount, production capacity increase is not our intention, but rather than that, we would like to increase the type of products that will give us more premium and higher performance, or something that's going to be difficult to produce.

That requires the renewal of the production facility or the equipment, these capex items are included. For the rebuilding direction, we spend money on retail business, and in order to grow them, we included some investment in this category: the factory productivity and the enhancement of the premiumness of the products and the retail business enhancement.

These are the ideas included in the capex items. If you have any additional comments?

Yes, as Global CEO mentioned, main items included here are, for example, highly profitable mining... we call this Master Core, but ultra-large-size tires for mining applications.

The capex for such a production is the main point of capex increase. In the U.S., mainly over the retail, the stores, and the store investment, store enhancement.

Another item is HRD, high rim diameter, and the conversion investment, to speak, to introduce more high rim diameter products, is the another focus. IT investment is also included as a big portion of this amount.

These are the breakdown of capex amount.

Thank you very much. Regionally, are there any focus region?

You mentioned about the retail stores in U.S. Is that the focus?

Yes, half of the profit is generated in the U.S., relatively, resource allocation is also spent proportionally larger in the U.S. For Master Core items, investment in Japan accounts for larger portion.

Understood clearly. Thank you very much.

Hata-san, thank you very much. Next, Diamond, Mr.

Yamamoto, please.

I'm Yamamoto from Diamond. Can you hear me?

Yes, we can hear you.

Thank you. On the 24th of March, effective new executive structure, that's my question.

The three technology—CIO, CPO, and CMO—will be assigned. I was able to understand the logic, but the vice president and the managing executive officer position will be abolished.

I think that's a reflection of the new CEO's idea. The decision-making issue so far migrating into the new organizational structures, and what is the aim and purpose?

Thank you. VP or managing executive officer positions will be abolished, but major idea is within the global companies, Chief Officer should lead the business.

G-ExCo, the Global Executive Committee, is the highest decision-making body, and key members are Chief Officers. Although there are the different responsibility assigned, the title difference does not make a difference.

That is the reason why we assigned the Chief Officers. The responsibility will not change significantly, but for the easier to understand manner, we renamed it as Chief Officers.

Business matrix, East CEO Mr. Tamura and West CEO Scott will have strong business responsibility.

Horizontally, we have more detailed breakdowns in terms of the function: CAO, CSO. Within the function, I was overseeing the business activities.

At the bottom left, CLO, CFO, and the CSO, those will be my direct report. The three pillars of technology, inclusive of a portfolio management, business management, four pillars combined, actually the seven pillars in total, we've got more the flattish organizations for prompt decision-making.

That's the intent of organizational design.

Thank you. Thank you very much.

In my understanding, the former Ishibashi's CEO's leadership, it was very strong leadership exercise by him, but with the new president or CEO, the leadership style, is there any change? What sort of leadership style would you plan to demonstrate?

If there's any clear direction in mind, please share with me.

Thank you. Due to the rebuilding activities, we passed through the painful phase, and now we are stepping into the growth phase.

From Ishibashi to Morita, rather than the change of the leadership, but due to the change of corporate phases, leadership style should be changed accordingly. Globally, for the better business, we can adapt the bottom-up approach, but at the same time, there are some struggling business.

For those areas, the strong leadership may be required. Within the company, no major change, but depending on the phase of the company, I myself will change the style of the leadership, as well as all the Chief Officers will unite together in proceeding in that direction.

Thank you very much for adding a clarity.

Thank you very much, Mr. Yamamoto.

Thank you very much. This is Sasaki from Japan Rubber Weekly.

Can you hear me?

Yes.

Thank you very much for the presentation. I'd like to ask you the adjusted operating profit ups and downs for fiscal 2025, 2026, page 26.

¥34.0 [billion?] for the material, but the 2025 looking at the ups and downs, -¥26 billion for the materials.

This is quite different from the previous year. Could you please explain about this item pushing up the adjusted operating profit?

Yes, Mr. Hishinuma will respond.

The changes of the raw materials and its impact on the operating profit: In 2025, mainly natural rubber compared to previous year, natural rubber prices were higher in the market. Natural rubber was a negative factor for the business results back then.

In fiscal 2026, the prices have stabilized, and it is turning positive to our business. That is the major difference between '25 through 2026.

Understood. Thank you.

As for EUDR, it was postponed, and are there any impact of the postponement of EUDR on your business?

In that sense, at the base of this major change is the changes of the pricing in the market. Partly it is because of EUDR, but the majority of the impact is because of the price changes in the market.

Understood. Thank you very much.