Hello, I am Saito. Thank you very much for joining us today.

At the outset, let me summarize what we want to communicate today. For the fiscal year March 2026, we achieved increased sales and profit, breaking past records.

Free cash flow exceeded our assumptions, and we revised shareholder returns upward from the initial plan and raised dividends. For the fiscal year March 2027, although there are headwinds such as tensions in the Middle East and lower ICT device production, such as smartphones due to soaring memory prices, we will continue to reinforce the management conscious of control the controllable, that is, improving our capabilities.

While the mid-term plan targets are generally expected to be achieved, we will further enhance business portfolio management. Today, I will elaborate on the investment in the AI ecosystem, a major potential for us in the mid to long term, highlighting progress on our growth strategy on AI data center-related products.

In addition, we are intensifying our engagement with investors and analysts. At the Investor Day scheduled for September 1st, we plan to talk about our software technology as a newly added core and human capital.

These are the key points for today. Now, let me pass the floor to Mr.

Yamanishi.

I am Yamanishi. I will present the highlights of the consolidated results.

First, the highlights of the full year results for the fiscal March 2026. In the electronics market, which affects our performance, ICT-related production remained solid year-on-year, and demand for nearline HDDs for data centers also stayed strong.

In the industrial equipment market, demand for renewable energy remained firm. On the other hand, in the automotive market, battery EV demand continued to be weak, resulting in component demand below initial expectations.

Under this environment, component demand in the ICT and industrial equipment market remained solid, posting year-on-year revenue growth in all segments. In total, sales were up 13.6% and profit increased 21.5%, breaking past records for both net sales and operating profit.

Next, I will provide the full year P&L overview. Including the FX impact headwind to net sales of about ¥2.5 billion and operating profit of about ¥10.5 billion, net sales were ¥2,504.8 billion, up ¥300 billion or 13.6% year-on-year.

Operating profit was ¥272.4 billion, up ¥48.2 billion or 21.5%. Profit before tax was ¥276.8 billion, up ¥39 billion or 16.4%, and net profit was ¥195.7 billion, up ¥28.5 billion or 17.1%, marking record highs in net sales and all profit items.

EPS was ¥103.09. The FX sensitivity for operating profit is estimated to be about ¥2 billion for a ¥1 move to a dollar for a year, same as before, and about ¥300 million to euro.

Next, the performance by segment for the full year. First, Passive Components.

Sales for the industrial equipment and automotive markets increased, posting net sales of ¥593.2 billion, up 6% year-on-year, and operating profit ¥41.8 billion, up 22.8% year-on-year. For ceramic capacitors, sales for the automotive market and industrial equipment increased, leading to higher sales, but lower profit due to lower average selling prices.

Aluminum electrolytic and film capacitors sales for the industrial equipment market such as renewable energy and AI servers increased and net sales increased. While structural reform expenses of ¥2.8 billion were recorded mainly in the first half for portfolio management, profit increased.

For inductive devices, sales for the automotive and industrial equipment markets increased and posted higher sales, but profit slightly decreased due to mix deterioration. High-frequency components, sales for the ICT and industrial equipment markets decreased, but profitability improved.

Piezoelectric electric material products and circuit protection component sales increased for the industrial equipment, and net sales and profit increased. Next, the Sensor Application Products segment.

Net sales were ¥224.6 billion, up 18.6% year-on-year, and operating profit ¥20.7 billion, a fourfold growth. Temperature and pressure sensors sales increased for the automotive market and net sales increased, but profit decreased due to weaker mix and other factors.

Magnetic sensors, sales of TMR sensors for smartphones increased, and the sales for automotive also increased, posting higher sales and profit for magnetic sensors as a whole. MEMS sensors, on top of microphone sales growth for the ICT, sales of motion sensors for industrial equipment increased, and MEMS sensors sales increased as a whole, turning from the previous year's loss to profit, contributing meaningfully to overall sensor earnings.

Next, the Magnetic Application Products. Net sales were ¥262.9 billion, up 17.6% year-on-year, and operating profit ¥27 billion, a significant increase of about eight times.

HDD heads and suspension assemblies, sales volume for nearline HDDs increased about 14% for heads and about 35% for suspensions, recording a significant increase in sales and profit. Magnet sales increased for the automotive market, resulting in net sales growth, and the loss is shrinking due to cost improvement effects including quality enhancement.

Energy Application Products, net sales were ¥1,370.3 billion, up 16.5%, operating profit ¥246.7 billion, up 5.2%. Rechargeable batteries, small capacity batteries sales for smartphones increased with new models, and medium batteries sales also grew for the industrial equipment.

Rechargeable batteries in total grew both in sales and profit. Power supplies for industrial equipment showed a gradual recovery in demand, and both sales and profit increased.

The factors for changes in net sales and operating profit by segment from the third quarter to fourth quarter. First, in Passive Components, sales were up ¥2.5 billion, 1.6%, and operating profit was down ¥4.2 billion, partly due to the fixed asset taxes.

Ceramic capacitors sales for the automotive market decreased, but sales for industrial equipment for AI data centers and others increased, resulting in higher sales, and profit remained virtually flat. Aluminum and film capacitors saw increased sales for renewable energy and AI data centers; net sales and profit increased.

Inductors, while sales were flat, profit decreased due to mix deterioration and utilization losses from the Chinese New Year holidays in facilities in China. High-frequency components saw a decrease in sales for the ICT market due to seasonality, and sales and profit decreased.

Piezoelectric products and circuit protection component sales and profit increased. Next, Sensor Application Products.

Sales decreased by ¥2.9 billion, 4.9%, and operating profit significantly decreased by ¥5.7 billion. Temperature and pressure sensors sales were flat, but recorded losses due to structural reform expenses of ¥300 million.

Magnetic sensors, while sales of Hall sensors were flat, sales of TMR sensors for ICT decreased with seasonality, and net sales decreased for the total magnetic sensors. Profit significantly decreased due to the structural reform expenses of ¥1.2 billion in Hall sensors.

MEMS sensors, sales of MEMS microphones and motion sensors were flat, but profit decreased due to the structural reform expenses. Next, the Magnetic Application Products.

Sales increased by ¥5 billion, 7.1% from Q3, and operating profit was flat. HDD heads sales volume increased by 9%, and sales and profit increased, while sales volume of suspensions was down 5% due to the reaction to front-loaded shipments in Q3, and sales and profit decreased.

For HDD heads and suspension as a whole, sales increased, but profit decreased. In magnets, we are proceeding with price pass-through of material prices; sales increased and the loss has narrowed.

Finally, Energy Application Products sales decreased by ¥32 billion or 8.5% QoQ, and operating profit decreased by ¥25.8 billion or 38.3%. Sales volume of small capacity batteries for the ICT market decreased by about 14% due to seasonality, and sales and profit decreased.

Power supplies for industrial equipment showed a trend in recovering demand, and sales and profit increased. Next, analysis of ¥48.2 billion increase in operating profit.

Increased sales volume across all segments resulted in ¥128.6 billion increase in profit. Rationalization and cost reduction of ¥18.8 billion and restructuring effects implemented in the previous term of ¥5.9 billion contributed to the higher profit, while selling price fluctuation had a negative impact of ¥53.2 billion.

SG&A expenses increased by ¥44.6 billion due to higher R&D expenses mainly in rechargeable batteries with accelerated development of new technologies and products. Although there was a negative impact of ¥3.3 billion from the decrease in one-time income from the previous year, ¥6.6 billion decrease in restructuring expenses and negative FX impact of ¥10.6 billion, in total, the profit increased by ¥48.2 billion from the higher sales volume.

Next, cash flow situations. For the full year, operating cash flow was ¥507.7 billion, and investment cash flow saw an increase in capex mainly for rechargeable batteries in new products and technologies; in net, it was up ¥133 billion year-on-year.

Free cash flow was ¥129.9 billion, down ¥71.1 billion year-on-year, but it trended above the expected level. Next, the full year projections for the fiscal year March 2027.

First, I will talk about the production volume forecasts for major devices as the assumptions for projections. For the automotive market, we expect total production to decrease by about 1%, and xEVs to increase by about 13%.

For smartphone production volume in ICT market, we forecast 1.112 billion units, 10% decrease impacted by memory shortages. The total HDD market will decrease by about 2%, but demand for AI data centers will remain strong, and we expect production of nearline HDDs for data centers to increase by 7%.

For laptops and tablets, we expect decreases by 12% and 8%, respectively, due to memory shortages similar to smartphones. With growth in demand for AI servers, we have included the outlook for AI server boards, which will increase by 21%.

Next, the consolidated earnings projections for the fiscal year March 2027. Based on the device market forecasts and recent demand trends, our full year projections are ¥2.58 trillion in net sales, operating profit ¥295 billion, and net profit ¥225 billion.

For exchange rates, we assume ¥150 to the dollar and ¥175 to the euro, roughly the same level as the average for the fiscal March 2026. We forecast free cash flow of ¥60 billion as we plan a significant increase in capex for mid-term growth.

For business portfolio management, we plan about ¥6 billion in one-time expenses, such as restructuring costs. For the dividend per share, considering the profit increase, we plan ¥20 each for mid-year and year-end, ¥40 for the full year.

Next, the image of net sales changes by segment for the full year. Since the currency impact is minor, we will compare based on disclosed figures.

For Passive Components, sales of inductive devices for automotive and products for AI servers, including aluminum electrolytic capacitors, will grow, thus 5% to 8% increase overall. Sensor Application Products, while magnetic sensors sales volume will decrease, we expect an overall range of flat to +3% with sales growth of new microphone products in MEMS sensors.

Magnetic Application Products, with nearline HDD heads sales volume increase about 50% with orders from captive manufacturers and suspension sales volume up about 22%, leading to a significant increase by 21% to 24% overall. Lastly, Energy Application Products, while smartphone production decreases about 10%, we expect small capacity batteries sales volume to be down about 7% due to improved mix and share gain, resulting in a range of -3% to flat overall.

Next, I will explain the changes in operating profit for the fiscal year ending March 27. We project ¥20 billion increase due to higher sales volumes primarily in passive components.

We anticipate ¥28 billion increase from profitability improvements in business currently classified as undergoing improvement, such as HDD heads and aluminum electrolytic capacitors. We expect ¥4 billion increase from loss reduction resulting from exiting businesses, such as EV power supply and camera module actuator businesses.

Furthermore, we plan to absorb ¥45 billion impact of selling price fluctuations by enhancing cost competitiveness through rationalization and cost-down effect ¥30 billion, effects of structural reforms from previous years ¥3 billion, reduction in one-time expense ¥9 billion. Regarding expenses for future growth, we plan an increase of ¥19.4 billion in SG&A expenses primarily for R&D to strengthen new product and technologies in secondary batteries and HDD heads, and an investment of ¥5 billion mainly in R&D for new business expansions, such as edge AI-related businesses.

Finally, including a minor impact of ¥2 billion from yen appreciation, we project an overall increase in operating profit of ¥22.6 billion. Next, I will explain the projection for various expenses.

For the capex, we plan a total of ¥370 billion, actively investing in new technology and product launches for small batteries, as well as facilities for HAMR compatible HDD heads and further capacity expansion for suspensions. Depreciation, we project ¥240 billion, reflecting the increase from capital investments made in previous fiscal year.

R&D expenses, we plan for ¥310 billion, focusing on developing new technology for secondary batteries, HAMR-related development for HDD heads, and accelerating development to expand new businesses, such as edge AI. Lastly, I will explain about dividends.

Our policy for the current mid-term management plan is to provide shareholder returns based on 35% payout ratio. For FY '26 March, we initially planned an interim dividend of 16 yen and a year-end dividend of 18 yen.

However, based on increased profits, we have raised the year-end dividend to 20 yen, totaling an annual dividend of 36 yen. For FY '27 March, we plan to increase the dividend to 40 yen annually, with both interim and year-end dividends at 20 yen each.

We will continue to consider appropriate shareholder returns based on future profit performance and our cash-on-hand situation. This concludes my explanation.

Thank you very much.

Now, I will explain the progress of our mid-term management plan. I will explain the actual results and projections for financial KPIs of this mid-term management plan.

In FY '26 March, we achieved record high sales and profits at every level, meeting all of our KPIs. For FY '27 March, the final year of the plan, we will strengthen both financial and non-financial initiatives to achieve our targets and focus on capital profitability by further enhancing our strength.

Regarding the progress of our capital allocation policy, we initially expected roughly ¥1 trillion in operating cash flow over the three-year period. However, since the FCF exceeded our initial expectations in the first two years, we now forecast a three-year surplus of ¥300 billion.

Of this, approximately ¥130 billion will be used flexibly for strategic investments. For the capex, we are going to add ¥200 billion primarily for the Energy and Magnetic Application segments.

For Energy, we are increasing investment in related equipment to meet the strong demand for innovative battery technologies. For Magnetic Applications, we are expanding the capacity to meet strong demand for both heads and suspensions.

The investment for head is specifically for HAMR production launch. Regarding strategic investment, as we did with acquisition of Soft-I last year, we will continue to invest actively in the AI ecosystem.

Next, I will explain the progress of three key points of our new mid-term management plan. Regarding the first point, strengthening cash flow management, as I have explained, we have exceeded our initial projections.

Regarding the third point, the evolution of ferrite tree, strengthening non-financial capital, we have made various advances. We will continue to enhance these alongside our sustainability and DX initiatives to evolve the ferrite tree significantly.

Regarding the second point, proactive business portfolio management, I will explain this in detail in the following slides. As I mentioned in last November, we are strengthening, accelerating, and promoting proactive business portfolio management to achieve an ROE of 15% or higher and an ROIC of 12% or higher.

Our portfolio management is primarily about promoting growth strategy. The key points are: first, organic growth and profitability improvement of growth-driving business; second, actions for business to be intensively monitored; third, inorganic growth including R&D, CVC investments, and M&A.

As we have mentioned previously, we view various AI-related applications as part of an AI ecosystem. This slide shows the sales growth performance and projections for AI ecosystem market, which I explained last April.

Last year, it accounted for slightly over 10% of total company's sales. By FY '27 March, it is expected to grow by 25%, reaching around 15% of total sales.

Today, I will focus on our blue and green existing products and a new gray-shaded business focusing on semiconductor manufacturing equipment. First, regarding our HDD head and suspension business among our existing products.

Demand for storage capacity in the HDD market is growing stronger than initially anticipated. HDD manufacturers are responding to this demand by increasing storage capacity per drive rather than unit volume.

This presents a major business opportunity for us. We have already started mass production of MAMR technology, which enables high-density magnetic recording.

In two years, we plan to launch mass production of HAMR and increase our high value-added product ratio and make our HDD head business a high-profit venture. Next, regarding passive components, we possess a wide product lineup to support AI data center infrastructure.

Data center power unit voltages will increase to 400 to 800 volts. We see this as an opportunity for our high-voltage capable products where we have a competitive edge in xEV applications, such as aluminum capacitors, MLCCs, and film capacitors.

We are also strengthening the low-voltage domain. We announced the establishment of a joint venture with Nippon Chemical Industrial on April 2nd.

This joint venture will accelerate the development of materials for low-voltage, high-capacity MLCCs used in data centers. We are also enhancing inductors.

Vertical power delivery, which addresses a low-voltage, high-current challenge, is an opportunity for us to help reduce power consumption in data centers. We hold various inductor technologies: wire wound, multilayer, and thin film, and are accelerating capacity expansion for thin-film inductors, which will contribute to earnings in this term.

Demand for thin-film inductors for optical transceivers and chipsets is also robust. Through these initiatives, we plan to increase sales of passive components for AI data centers by approximately 10-fold.

We will continue to build our competitive edge in both high-voltage and low-voltage areas, executing each strategy with timely and aggressive investments. Next, I will explain the progress of our initiatives for semiconductor manufacturing equipment as presented at the Investor Day on November 28th.

We sell equipments such as load ports and flip-chip bonders. We plan to expand this business by combining high-density, high-precision mounting technology with high reliability and high heat dissipation materials to contribute to reduced power consumption in order to expand our business.

Today, I will focus on the progress of our semiconductor bonding materials. We have acquired technology from NAPRA related to nanocomposite materials, which offer higher heat dissipation than the precious metals like silver currently used for logic and power IC bonding materials.

This material offers numerous advantages: heat resistance, reliability, and heat dissipation. We have decided to aim for the industry's first mass production of this material.

We plan to begin mass production for some customers during the next fiscal year. We have already received many inquiries and are considering expanding this to our internal product lineup.

This material holds great potential for reducing power consumption in high-density packaging and is expected to expand into many markets beyond semiconductors. Going forward, we will be collaborating with our partners and enhance this business, and therefore, please have great expectation to us.

Next, I will explain the progress of our portfolio management. Out of 29 total CBUs, two business units have reached profit base.

The number of businesses under improvement that have a clear path to profit base has increased from 9 to 13. These are primarily passive component CBUs.

We will determine the direction for the five CBUs currently under discussion by the end of this fiscal year, which is the final year of the mid-term plan. Additionally, while the effect is about ¥32 billion from FY '26 to FY '27 March, we estimate the cumulative improvement effect during this mid-term plan to be approximately ¥90 billion.

Following the progress made of our portfolio management, ROIC by segment has improved as shown here. We will continue to focus on capital profitability to raise the ROIC-WACC spread and aim for expanded cash flow.

Finally, regarding inorganic growth, which is the third pillar. In April, we reorganized the Corporate Marketing and Incubation Group, integrating the passive component and sensor sales teams to establish a Sales & Marketing Headquarters responsible for company-wide sales.

We have also made the Incubation Group independent and placed it within the R&D Center to further strengthen new business creation. Through these changes, we will transform our value creation cycle to be more agile and more efficient.

At the September Investor Day, we plan to explain our efforts regarding human capital, the root of ferrite tree, and software technologies, such as SensEI and the AR platform. Through this transformation of our value creation chain, we will continue to grow the ferrite tree sustainably.

This concludes my presentation. Thank you for your attention.