We would now like to start the announcement on the consolidated financial results for the third quarter ended December 31, 2016, for Hitachi, Ltd.

Mitsuaki Nishiyama, Senior Vice President and Executive Officer, CFO; Mitsuyoshi Toyoshima, General Manager, Financial Strategy division; Ken Mizoguchi, Executive General Manager of Corporate Brand and Communication division.

Now I'd like to ask Mr. Nishiyama to start with the explanation.

Hitachi report as well as the releases have been distributed to you. I shall refer to the PowerPoint presentation for my explanation.

Please refer to 1-3. This is the consolidated statement of profit or loss.

Right-hand side, for the performance of the 3 quarters from April to December. At the very top, revenues was JPY 6,519.3 billion, and that is a 10% decline from the previous year.

This is mainly the impact of foreign exchange. The strong yen has had an impact.

And furthermore, portfolio reorganization impact is included in the slide. Adjusted operating income was JPY 373.1 billion, which is a decline of JPY 35.2 billion year-over-year.

And 5.7% is the operating profit. And for the third quarter, this is the highest level.

And EBIT was JPY 362 billion. At the very bottom, the net income attributable to Hitachi stockholders was JPY 191.2 billion, which is a 11% increase over the previous year, up JPY 18.2 billion.

Income tax burden, although it's not written here, was 29.1% last year; this year, has reduced to 24.3%. Income tax burden has declined.

Although revenue has declined, the net income increased by JPY 18.2 billion.

I will skip over 1.4 and go to 1.5. This is the adjusted operating income year-over-year for the 3 quarters.

Left-hand side is the waterfall chart for revenues. The exchange impact was JPY 460 billion negative.

And there was impact of reorganization of Hitachi Transport System, impact of reorganization of Hitachi Capital and also of the air conditioning business, which were negative. However, there was organic growth impact of positive JPY 282.1 billion.

The organic growth was driven by the railway business as well as the automotive parts business. And the Hitachi high technology and SPE business were the drivers for the organic growth.

Right-hand side is the adjusted operating income. Similar to revenues, there was a significant negative impact of the exchange of JPY 61 billion (sic) [ JPY 65 billion ], impact of reorganization of Hitachi Transport System and then Hitachi Capital as well as carveout of the air-conditioning business.

These were negative impacts. However, beyond that, there was organic profitability improvement of JPY 65.8 billion.

Although it is not written here, if I may give you a further breakdown, business development as well as HR, as well as depreciation, have increased. And there have been investment increase for growth, which were negative impacts.

That's about JPY 31.5 billion negative impact. A price decline of about JPY 80 billion.

Against that, the business scale has increased, impact of JPY 36 billion. And cost reduction -- as well as the impact of cost reduction to the tune of JPY 140 billion impact are included.

By so doing, if we exclude the reorganizations with foreign exchange, we have been able to achieve organic operating income improvement.

1-6, Revenues by Market. For Japan, it accounted for 51% (sic) [ 49% ], which is 91% year-over-year.

Outside Japan, accounting for 49% (sic) [ 51% ], 89% year-over-year, were the results. Altogether, 90% is the year-over-year growth.

Although not written here, if we exclude the foreign exchanges with this [ph] portfolio reorganization impact, for Japan will be 99%; outside Japan, 105%. Overall is 102%, which is the growth Japan -- outside Japan organic growth.

You can see that outside Japan growth was the driver. We have seen growth in Europe, 104% year-over-year.

If we exclude the foreign exchange impact, the growth was at a level of 116%.

Now moving on to 1-8, cash flow, toward the bottom of this page. The numbers are presented.

Left-hand side is for the Manufacturing, Services and Others. Cash flows from operating activities, JPY 388.3 billion, cash flows.

That's 6.1% cash flow margin. And cash flow from investing activities, minus JPY 15.9 billion.

Last year, the whole Ansaldo investment expenditures have fallen off. Furthermore, there had been business transfer proceeds.

That is the reason why it is limited to JPY 15.9 billion. As a result, the free cash flow was JPY 372.4 billion, which is an increase of JPY 326.5 billion year-over-year.

Next page is the consolidated balance sheet. At the right-hand top, the total assets was JPY 9,640.1 billion.

That is a decline of JPY 2.9 trillion. This is because of reorganization of Hitachi Capital.

Balance sheet has been reduced. Now in terms of Manufacturing, Services and Others, total assets was JPY 9,640.1 billion, a reduction of JPY 277.7 billion.

As a result -- the cash conversion cycle was 70.8 days. Last time -- or compared to March end, improvement has been made by 0.8 days from 73.6 (sic) [ 71.6 ] to 70.8 days.

And 2015, at the end of December, when compared to the end of last year, was 73.6 days, so 2.8 days improvement has been made.

Now Hitachi's stockholders' equity ratio was 29.9%. We have been aiming for 30% from the past.

We are coming very closer to this number. The ratio was 0.31x and so an improvement.

Next page, please, 1-10 and 1-11. Let me explain the revenues and operating income by segment.

So by segment, the increase in operating income was -- Information & Telecommunication Systems, JPY 14.2 billion; and Electronic Systems & Equipment, plus JPY 8.6 billion. So these were the increase in operating income.

Other segments, because of the portfolio reorganization and foreign exchange, suffered from decline in operating income, but excluding the portfolio reorganization and foreign exchange factor, all 9 segments enjoyed the increase in operating income.

Information & Telecommunication Systems operating income increased by JPY 14.2 billion. The business restructuring effect, project management improvement and establishment were effective.

EBIT went down by JPY 19 billion year-over-year. This is because of the business restructuring that is continuing into this year.

Information, telecommunication IT hardware restructuring is continuing, and that is why we're seeing a decline in EBIT. In the electronic systems and equipments, Hitachi High-Technologies SPE, improvement was seen, so that helped push up the operating income.

Hitachi Construction Machinery. Because of the foreign exchange factor, Hitachi Construction Machinery, 92%; and operating income, down by 4.2% -- JPY 4.2 billion.

And High Functional Materials & Components, because of foreign exchange factor, this was down by JPY 5.2 billion in operating income. Automotive Systems is growing by organic basis, but due to foreign exchange factors, the operating income went down.

Smart life and ecofriendly system, reorganization of the air-conditioning system. In Others segments, the reorganization of the logistics system.

Financial systems, because of the reorganization of Hitachi Capital.

Next, please move to Page 16, Slide 2-1. Let me explain the outlook for fiscal year 2016.

JPY 110 to the U.S. dollar and JPY 115 to the euro.

Last time, it was JPY 100 to the U.S. dollar and JPY 110 to the euro.

This time, we changed to JPY 110 and JPY 115, respectively. Based on this assumption, forecast is revenue of JPY 9 trillion, adjusted operating income JPY 560 billion.

The previous forecast was JPY 540 billion, so it's up by JPY 20 billion. EBIT, JPY 450 billion, no change; and the net income attributable to Hitachi, Ltd.

stockholders, JPY 200 billion, unchanged. So operating income is up by JPY 20 billion, but in nonoperating loss in other is an increase in the impairment loss.

So including this impairment loss risk, we increased the nonoperating loss and we have kept the EBIT unchanged.

Now by segment. Please move to Slide 2-2 and 2-3.

First, Information & Telecommunication Systems. Operating income -- on the far right, you can see previous forecast comparison.

Operating income is the same as last time, but EBIT, because of the additional structural reform, IT product -- IT product structural reform is taking place throughout the world, so we added the additional restructuring reform. We've included that in corporate items and eliminations last time, but this time, with better plan, we are now including this in Information & Telecommunication Systems, so changed by JPY 9 billion.

Social Infrastructure & Industrial Systems operating income is now JPY 85 billion, down by JPY 15 billion from JPY 100 billion. Overseas project, especially Middle East projects, is now coming to a end, completion, but we are reviewing the costs, and cost up is factored in.

In social infrastructure industrial system, EBIT is down by JPY 80 billion, a big downward revision; operating income and EBIT downward revision. In October, this was included in our corporate items and eliminations as risk, but this time, in EBIT, in nonoperating loss, we have GE-Hitachi joint venture, GE-Hitachi nuclear energy business.

Apart from our nuclear power generation business, there is the laser uranium enrichment business which we are trying to commercialize, but now we are studying with a possible withdrawal or a disposal, a sell-off of a business. And we are having a better prospect for this.

We will make a decision by March. So the impairment risk of this business, JPY 70 billion, is included here.

Last time, it was JPY 50 billion, in September, in corporate items and eliminations, but this time, we have a better prospect, so now we are including it in Social Infrastructure & Industrial Systems Segment.

Electronic Systems & Equipment. Hitachi High-Technologies is strong, so up by JPY 6 billion in operating income.

High Functional Materials & Components, Hitachi chemical revenues and operating income. So operating income up by JPY 3 billion.

Automotive Systems EBIT, up by JPY 5 billion. And smart life, ecofriendly system EBIT, improvement by JPY 8 billion.

This is because of the gain on sales of real estate. So those are the main factors.

Lastly, let me give you some topics.

The number of use cases is reported every time. In October, it was 170, but in -- as of December 31, the number is up to 190.

And we are targeting 200 cases by the end of fiscal year 2016.

As you can see in the release distributed today, we are strengthening business structure to expand the Social Innovation Business using digital technologies. We are reclassifying 14 business units, smart life and ecofriendly system business and automotive system businesses, total 16 BUs, into 4 focus fields to create a synergy effect and lead the growth by executive vice president and executive officers who are responsible for each field.

And CEO of Hitachi Consulting Corporation will promote the Social Innovation Business in 3 regions: the Americas; Asia Pacific; and Europe, Russia, Middle East and other areas. And we are appointing Chief Lumada Officers.

This is equivalent to Chief Digital Officers in other companies in each BU in order to accelerate the global rollout of Lumada. So we will have someone responsible in each BU.

the investment and loan strategy division to plan investment strategy for the next-stage growth and the "investment for the future" division to establish new businesses from a mid- to long-term perspective.

That is all. Thank you.

Thank you. We would like to move on to the Q&A period.

Please state your name and affiliation before asking your question.

I have 2 questions. The first question is regarding what you have explained with respect to confirmation of what items have been factored in or not factored in.

You have mentioned that the -- what has been included, but what was not included at the interim?

So that increase of JPY 20 billion is related to this. In terms of uranium enrichment business, we have been considering the viability of this business, inclusive of a possible withdrawal.

Therefore, that was included. JPY 50 billion was included, but now we have increased that to JPY 70 billion.

Now the real estate proceed is also included. So that's an increase of JPY 20 billion.

And as a result of the JPY 20 billion EBITDA [ph]...

That has been reflected.

At the time of interim, the consolidated corporate items and eliminations buffer, the impact of JPY 10 billion. EBIT was JPY 20 billion.

Now this JPY 10 billion is related to the Social Infrastructure & Industrial Systems.

We have been looking at this on individual basis, which is then realized at the upper level. So for the current forecast, a comprehensive buffer is being considered.

There have been inflow and outflow, but the -- on operating profit level, around JPY 10 billion has been considered, EBIT; nonoperating, JPY 20 billion, so altogether JPY 30 billion are included. So the risk buffer is at a similar level to the last time we spoke.

Second question is regarding the new forecast. Increase and decreases is what I would like to ask about.

You -- at the press conference, you said that the half is foreign exchange impact. What about other items?

Can you further elaborate? Furthermore, at the interim results, foreign exchange JPY 40 billion reduction was made, and now it has recovered at the level JPY 10 billion.

But the rate has not recovered completely, so I think the foreign exchange impact could have been larger. It could be a matter of timing, but please elaborate further.

Overall, a JPY 10 billion -- a JPY 20 billion improvement has been made, and out of which JPY 10 billion is a result of foreign exchange. So I am not satisfied with this level yet.

There is the fourth quarter to follow. Therefore, we -- the difference with JPY 100 -- at JPY 110 then compared to JPY 100 at the interim should be subject to further harvest [ph] so that the further incremental numbers can be achieved.

Now against plan, JPY 20 billion, by segment, let me give you further information. It's mixed with foreign exchange, but let me give you a breakdown, JPY 20 billion: the information, telecommunication system is JPY 10 billion; the electronic system and equipment, JPY 5 billion; High Functional Materials & Components, inclusive of Hitachi chemicals, JPY 3 billion; Automotive Systems, JPY 2 billion.

All together for segments, that's JPY 20 billion. And I have given you the breakdown by segments.

Any other questions?

I have one question. But before that: This foreign exchange impact in third quarter alone is JPY 5 billion and on full year basis JPY 10 billion.

So this is the gap with your internal plan. Am I correct?

So the third quarter result.

So against -- this JPY 110, JPY 100 -- against JPY 100, so is this upside of JPY 10 billion against your internal plan?

About JPY 10 billion impact in third quarter -- no, third quarter alone, from October to December.

What about second half, about JPY 10 billion?

Second quarter cumulative, on October 28, against our assumption of JPY 100 to $1.00, third quarter weaker yen impact was JPY 10 billion. Now fourth quarter is revised to JPY 110 to $1.00, so this impact is JPY 10 billion.

So on the operating income basis, JPY 20 billion comes from foreign exchange impact.

So nuclear-related JPY 20 billion reduction. So the cause was, your assumption was JPY 50 billion, which increased to JPY 70 billion.

What is the factor behind it?

JPY 10 billion is foreign exchange. In September, we -- based on JPY 110, but now it is JPY 115 on the impairment risk calculation.

And we are reevaluating the impairment risk evaluation from more stringent eyes. So total JPY 50 billion is up to JPY 70 billion.

So foreign exchange worked negatively here.

Yes.

GE-Hitachi nuclear business itself, cost factors or from business fundamentals point of view, are -- is there anything you should review or revise?

GE-Hitachi. Hitachi has 40% in this company.

It is a joint venture with GE. The main business is the nuclear.

There are no newly established plants, so they're mostly maintenance and the associated parts business, service business, but the subsidiary -- so we are indirectly holding 25%. So this laser uranium enrichment, development and commercialization, this is the -- what the company is working on, but this value is larger.

The value of this company is JPY 70 billion. And if we decide to withdraw, this will be 0.

Then the remainder will be about $100 million, so the remaining portion will be small. However, this nuclear business itself; and the fuel; the uranium laser enrichment, this research and development, we may withdraw from that business, but the remaining business format or our policy remains unchanged, so there should be no impact.

I have 2 questions. First question is related to the Middle East case.

During the last meeting, you said that 2 out of 3 will be subject to transfer within this fiscal year. Please confirm the schedule of the transfer.

What about the transfer of the remaining one? And the residual risk should be explained.

Regarding the Middle East, in terms of its plant for Social Infrastructure & Industrial Systems, there was 1 in Southeast Asia that will run its course this year. And Middle East, there are 3.

Out of the 3 plants, 2 will be running its course during this fiscal year. There are some legal and administrative negotiations that will remain, but most of the construction work will be behind us.

The other one will take the -- up to the end of 2017, 1 of the Middle East plants, and the construction will -- work will remain. And we have set aside provision for the following.

The engineering has been completed, and volume is being provided. And the project has been completed in terms of construction to 50%, but there has been some additional designing that was required.

So out of -- so E of -- out of EPC, 100% has been completed. And P, C are subject to visibility now.

So we have reviewed the costs and we have identified increase in cost. For the remaining construction work, we will do this in a steadfast manner and make sure that there will be no further cost overruns.

And we will continue to work on this project in a steadfast manner.

Regarding Horizon in the U.K. Recently, on the part of Toshiba, new EPC projects from the nuclear area could be subject to withdrawal for them.

When you have acquired the Horizon business, in doing existing maintenance, you said that you must continue to maintain the technological level with -- through new projects, new plants. In the case of Toshiba, in the absence of new projects, it seems that maintenance and operations can continue, but why is it not the case for Hitachi?

Why do you need new projects in order to pursue maintenance and operations?

I cannot refer to other companies' situation, so I shall refrain from discussing other companies or making comparisons, but I would like to say that in terms of overseas plants, nuclear power plants we have the GE-Hitachi business in the United States. How -- we are not engaging overseas plants through the U.S.

And there is nothing that is new construction in the United States. And regarding the laser enrichment, value was the significant portion of business, but that will be subject to possible impairment risks, so nothing significant will remain in the U.S.

Otherwise, we have Horizon overseas. In the U.K., this is the first time we're engaged in a new plant, a new nuclear project in the United States -- in the U.K.

We were cognizant of the inherent risks from the beginning. Therefore, we work with vector (sic) [ Bechtel ] that has experience in the U.K.

and also worked with JGC that has global experience in terms of the local construction. For E and P, will be designed in Japan for a rollout overseas, so this is limited, but in terms of construction, the C area is a first experience for us.

And that is the reason why we have established a consortium. In terms of the operation of a nuclear power plant, we are going to be receiving support from Japan Nuclear Fuel Limited as well.

Therefore, the knowhow of each of our partners will be brought to bear in pursuing this project. With the U.K.

government, we are negotiating a risk which is uncontrollable for us. We are negotiating this risk, we are also trying to factor in into the contractual terms as much as possible so that risk allocation can be made appropriate.

We are trying to mitigate risk as much as possible in this business. We are making preparations to achieve this goal.

Thank you.

Three questions. First question is your prospect for fiscal year 2016.

Hitachi Koki and Hitachi Capital will go out, so without Hitachi Koki, this will be about JPY 5 billion to JPY 7 billion, JPY 8 billion; and capital JPY 20 billion. So it seems that it will be difficult to increase operating income, but at this point in time, for fiscal year 2017, what are some of the factors that may push up or down the operating income, in uranium-related impairment, in operating or nonoperating level?

If you could elaborate this point, please.

Fiscal year '17, there are various carveouts in the reorganization of business portfolio, so business transfers. If we transfer a business, then the revenue and operating income will go down accordingly, but on the other hand, we will grow organically.

And also, M&A, we will acquire companies and plan for some M&As, so we will work on our budget for fiscal year 2017, up to March, and we will study carefully. As you just correctly mentioned, there are some factors that will reduce the revenue.

In 2018 medium-term plan, we will review our business portfolio. And we are -- this work is currently underway, and we are also considering measures to make up for it for our growth strategy.

Now regarding the uranium enrichment business withdrawal and the impairment risk for that, GE-Hitachi is the joint venture where Hitachi has 40%. And it is a subsidiary of this company, so with the impairment, our -- the equity-method affiliate investment, this will be the impairment risk and this will be posted as nonoperating loss.

We will make a decision of this possible selloff of this company and go to GE-Hitachi board and post this in the fourth quarter.

So 40% of the JPY 70 billion, 40% of JPY 70 billion.

Yes, the loss that we will post is JPY 70 billion.

Second question is about the nuclear power. At the end of last year, JBIC or the government-affiliated fund was to support you.

And so what is the scheduling of this U.K. project, when you start, when you end?

And how much, and how many?

This nuclear Horizon project. So the overall schedule is as follows.

The reactor certification is underway, and this will complete by the end of fiscal year 2017. So this reactor certification process is coming to an end and this will end at the end of 2017.

And next, site license needs to be acquired. Site license will be acquired in 2018.

And EPC, the FID, the final investment decision, will be made in 2019, and we'll start the construction on a full scale in 2019. And the first operation will start in the early part of 2020.

My third question is not just nuclear but in EPC, in your overseas projects. It seems that you are having difficulty in your overseas projects.

So in your medium-term plan, I hear that you are trying to reduce EPC, and this is seen in other companies as well. So changing the framework or integrating with other companies or risk hedging, there are many ways of thinking, so I would like to hear what your board, what your executive is thinking.

As you just correctly mentioned, the EPC that involves overseas constructions has been a headache. And we have been suffering from losses in the past.

So in this current medium-term management plan, the industrial plants, we are still struggling, but medium -- Middle East large-scale construction, large-scale EPCs, we've stopped taking orders. We will install equipments.

That, we continue, but the deals that are mainly constructions will not be accepted or taken as order. Now Southeast Asian plants, chemical plants, this is where we also struggled.

There is a big price competition, so we will not take any large-scale orders on this point too. So industrial, medical, where we have strong points, we will focus in our strong suits.

In nuclear power, the power production, the EPC, this is a form of EPC this time, but as I said earlier, this is something we have never experienced. So including the U.K.

government, we are dividing the risks and include the risks borne by others in the contract, and the costs associated with that. So we make sure that we do good negotiations, solid negotiation; and work in consortium so that we can leverage other companies' knowledge and expertise.

Next question, please?

I have 3 questions. First question is an easy question regarding foreign exchange sensitivity on an annual basis.

For the dollar and euro, I think you mentioned JPY 1 billion, JPY 2 billion, respectively, for JPY 1 movement, but what is the impact now? What is the sensitivity now?

Please refer to Page 28. This is for the remaining period.

We have showed here the foreign exchange sensitivity. The upper top graph shows that for every JPY 1 movement of the yen-U.S.

dollar, basis [ph] impact will be JPY 5 billion for revenues. Adjusted operating income will be JPY 1 billion.

For euro, JPY 1 movement will have impact of JPY 15 billion in terms of revenues as well as JPY 300 million for the adjusted operating income.

This is only for the fourth quarter. What about the annual?

You might have hedged, but it would be 4x these numbers, I guess, for the JPY 4 billion for the U.S. dollar.

May I understand that to be the case?

Yes. The structures don't changed.

Now the question, second question. From the revisions that you've made, if we subtract the fourth quarter, it seems that there are 3 factors for information and telecommunication.

You have not changed the number, and so that's JPY 51.3 billion [ph]. That means that it is going to be a reduction in profit by JPY 12 billion.

So what is the background to this? And other -- logistics, Others, up to the third quarter, it has been prevailing around JPY 5 billion to JPY 7 billion in terms of profit increase.

If my calculation is correct, it seems that, for fourth quarter, it will be a reduction of JPY 3 billion. So already [ph] mentioned in terms of corporate items and eliminations, if we make a subtraction, that's minus JPY 8.8 billion, negative.

It could include a buffer here. Please elaborate because it does not sit well for me.

Please elaborate further regarding the buffer.

You have a good eye. You have a good interpretation.

In terms of information and telecommunications, for the fourth quarter, we have a conservative number that has been identified. On the other hand, for hardware, the overseas -- inclusive of overseas, the organization has changed.

We have implemented restructuring on a global basis. Therefore, there is concern regarding the revenues in this area.

For -- the Financial Services as well as public sector are doing well, but there are other concerns. That is the reason why we are taking a conservative view.

For Others, we have a conservative analysis of this area as well.

Furthermore, regarding corporate items and eliminations, as you have rightly mentioned, explicitly, operating income, JPY 10 billion risk buffer has been allocated.

In the absence of special events, JPY 560 billion is the plan. There is upside.

What is uncertain is the following. For high functional materials, Hitachi Metals as well as Construction Machinery are areas where there is market uncertainty.

Therefore, there is some concern. That is the reason why we are taking a conservative approach.

Last question is as follows. For fourth quarter and beyond, for the major businesses, for example information and telecommunication system, from the fourth quarter and toward the first half of next fiscal year, please elaborate further on your outlook in terms of information, telecommunication and IT business.

How does it look to you? In terms of orders for social infrastructure and industrial system, how is it prevailing?

And system investment in the industrial area for the parent company basis for the Automotive Systems, inclusive of China, as well as in Europe as well as the U.S., what is your outlook in terms of business as well as the outlook going forward? And with the administration of Mr.

Trump, what is going to be the impact? There seems to me significant activity taking place, so how will you be impacted in terms of the business environment going forward?

Regarding Information & Telecommunication Systems, first, for financial as well as public sector, solutions from business remains strong. Profitability is improving and it is continuing to improve.

Project management is being done in a steadfast manner. Therefore, as we have done so in the recent past, project management will be implemented rigorously, and I believe that this will continue to drive strong business.

For 2013, 2014, we have experienced the Financial Services integration. And the Social Security and Tax Number System was introduced, but beyond that we can expect a certain level of workload for AI, IoT.

There is prevailing needs emerging. We would like to capture business opportunities in these areas as well.

For the hardware, we are struggling somewhat because of -- hardware is increasingly becoming a service. This trend is continuing.

That is the reason why we are narrowing down the models that we're developing, so that efficiency can be improved. Therefore, their profitability can be maintained.

As already mentioned, business restructuring will have to be implemented in an increasingly manner. And it will have to be accelerated further.

We will do this toward the end of this fiscal year as well as the first half of next fiscal year. If this is implemented successfully, I'm sure that profitability can be improved.

Regarding the Social Infrastructure & Industrial Systems, we believe that there is -- railways are expected to drive growth in an explicit manner going forward. With the acquisition or even before the acquisition Ansaldo, the U.K.

railway business is continuing to expand. And with the acquisition of Ansaldo, from various countries in the world, we are receiving orders.

We believe that this business will drive the Social Infrastructure & Industrial Systems business. There is a slight concern regarding real estate market in China.

There is a slowing down of this market. With that, elevator building system business is subject to a significant price decline.

Against this backdrop, we are trying to develop lower-cost models to be introduced into this market. Maintenance business will be expanded as well.

Through these measures, we hope that profitability can be maintained. Automotive Systems are -- is an area that we have been making investments all over the world.

Depending on the plants, productivity is not at the level at which we can be satisfied yet. And revenues can -- growth can be limited, but by improving the productivity, we believe that further improvement of business can be expected.

However, the demand in the United States as well as the Chinese market is subject to uncertainty. There is -- are differences.

We have been trying to promote local production for local consumption in the past. Therefore, we will monitor the business environment, as well as the activities of the automobile OEMs, to deal with this business in the appropriate manner.

Now regarding President Trump of the United States, new administration has been set up. We believe the most significant impact on our part will be volatility of foreign exchange.

This is not desirable for us, but it isn't safe or I am in a position to talk about the policies of the Japanese government or U.S. government, but we have been focused on local production as well as local procurement as well.

We have been doing this from the past, and we shall do this going forward as well so that we will be resilient to foreign exchange volatility. But the changes in foreign exchange is something that is inevitable.

It will have impact for export, import as well as local currency settlement of our local subsidiaries. And how it is going to be reflected in the consolidated statement are inevitable.

Therefore, we have to continue to improve the low-profitability business and continue to make efforts in cost reduction so that overall profitability can be enhanced. We shall continue to drive this effort going forward.

You mentioned the elevator business in China just now, about JPY 600 billion revenue. Operating profit is about JPY 60 billion.

Now for -- and half is China. Now 2 years ago, the business was very bad, but -- environment is very difficult, but it seems that it is on a road toward recovery.

Should we have any concerns about this?

In terms of volume, number of units may be achieved to a certain level, but pricewise it is going to be difficult. But the level of recovery is uncertain because it's a multiplication.

We have to multiply the price with the volume. So currently, it's very difficult to talk about a specific number, but we shall monitor the situation very carefully, at any rate: price reduction and maintenance.

And our new geographies will be covered. Not just limited to China, but also in Southeast Asia we have established a maintenance training center so that we can receive orders as well as receive maintenance work as well.

By so doing, we would like to mitigate the overall negative impact through these measures.

Any other questions? Time is running out, so we would like to take the last question.

In topics, you said Lumada progress. So the refrigerator, temperature monitoring and green [ph] monitoring.

In terms of IoT, I -- it is not -- don't have a good image of this, but in large businesses, what are the progresses? And what is the prospect you have in IoT and AI?

So temperature monitoring, analyzing refrigerator temperature. And the end users' products are like food that are stored in the warehouse.

This has to be adjusted. So this temperature has to be monitored 24/7, so quality and the temperature analysis and big data, analysis using AI, the regression analysis.

I think the application is broad based, so distribution, retail companies will be able to leverage these solutions. So this will be our focus going forward.

Now the pain [ph] for the manufacturers, the green truck [ph] for the manufacturing industry, through higher efficiency in facilities, we can reduce costs of our clients. So we are promoting PoC.

So this is where we can provide solution through Lumada. And at the same time, we will provide our systems or equipments and devices to expand this business.

With this, we would like to bring this meeting to a close. Thank you very much for your attendance today.