Before beginning today's presentation, I would like to express my heartfelt sympathy to all those affected by the recent earthquake in the Kumamoto region. We sincerely pray for the earliest possible recovery and reconstruction of the affected areas.

As of now, no significant damage has been confirmed to our group's employees or business locations. We will take into account the circumstances of everyone in the affected areas, as well as our customers and other stakeholders, and provide the necessary support.

Now, I'd like to present our financial results for the first quarter of fiscal 2026, and our earnings outlook for fiscal 2026. First, here are today's key points.

For the first quarter of fiscal 2026, adjusted operating income was 12.3 billion yen, which is a 4.5 billion yen increase compared to year on year, representing significant progress and strong results. However, this is driven by inventory buildup among customers due to the impact of the Middle East, that is, bringing forward shipments to replenish their inventory, as well as the effects of sales price increases, primarily in the electronics and energy, to pass on the cost inflation of raw materials and fuel.

Consequently, the early realization of the price revision effects combined with the delayed increase in raw materials and fuel prices contributed to earnings growth in the first quarter, along with the effect of accelerated shipments. This is because inventories affected by the cost increase still remain unshipped.

Profit attributable to owners of parent was 45.1 billion yen, a significant increase of 45.8 billion yen compared to year on year. This is due to the completion of the transfer of the aramid paper business in April 2026.

Moving on to the outlook for fiscal 2026, we plan to revise the revenue outlook based on the top-line growth due to the aforementioned factors, such as the pass-through of raw materials and fuel prices increase, as well as the impact of a weak yen on foreign exchange. Meanwhile, we will leave the profit forecast unchanged.

This is due to the unrealized impact of the raw materials and fuel prices increase that I mentioned in the section on first quarter results, which is expected to materialize in the second quarter or later. In addition to the effect of accelerated shipments, we have also taken into account increased uncertainty over the situation in the Middle East.

As a result, the dividend forecast remains unchanged at 50 yen per share. Moving on to the topics.

As part of our structural reform in the pharmaceutical business, we are proceeding with the transfer of manufacturing and marketing approvals to LTL Pharma. We have also signed an agreement to transfer the sales rights at the end of July.

This means that the profits from the seven long-listed drugs will drop from August onwards. I will walk you through the contents shown here.

Now, I'd like to review our fiscal 2026 first quarter results, starting with highlights. First quarter revenue was 221.9 billion yen, representing a year-on-year decrease of 21.2 billion yen.

Meanwhile, adjusted operating income was 12.3 billion yen, representing a year-on-year increase of 4.5 billion yen, due to factors such as the accelerated shipments and the delayed impact of raw materials and fuel prices increase. In addition, the gain on the sale of the aramid paper business has been recorded under non-recurring items.

Non-recurring items totaled 47.8 billion yen, compared to a loss of 4.2 billion yen during the same period last fiscal year, representing a significant increase of 52 billion yen. As a result, first quarter profit increased by 45.8 billion yen compared to year on year, reaching 45.1 billion yen.

The negative value of 14.6 billion yen shown in the others column reflects the recognition of taxes due to profits being generated. Next, I will explain revenue and adjusted operating income by segment.

Revenue decreased significantly in the specialty materials, primarily due to the transfer of the composites business in North America last fiscal year. In the apparel and industries, as well as electronics and energy, revenue increased due to factors such as foreign exchange effects and the pass-through of raw materials and fuel prices.

These resulted in total revenue of 221.9 billion yen, which is a decrease of 21.2 billion yen compared to year on year. Moving on to adjusted operating income, AOI, electronics and energy posted an AOI of 8.5 billion yen, a significant increase of 3.4 billion yen compared to year on year, due to the factors I mentioned, such as accelerated shipments and the time lag of the cost inflation impact with the early realization of the price hike effect.

Meanwhile, the others posted a 1.8 billion yen loss compared to a 0.3 billion yen loss in year on year, representing a year-on-year decrease of 1.5 billion yen. This is largely due to the exclusion of the aramid paper business following its transfer.

Next, I'd like to explain the status by segment. First, apparel and industries.

Revenue increased partly due to the pass-through of rising raw materials and fuel prices. Adjusted operating income was 4.8 billion yen compared to 4.1 billion yen in the first quarter last year, representing a year-on-year increase of 0.7 billion yen.

As noted in the breakdown of positive factors below, industrial materials performed steadily in areas such as artificial leather and RO membranes for filtration. In fiber materials and apparel, sales have been favorable, mainly due to strong demand for outdoor apparel for North America.

Turning to the others, there was a negative impact of 0.3 billion yen due to an increase in SG&A expenses for sales expansion, as well as upfront expenses for the integration with Asahi Kasei Advance. These factors resulted in an AOI of 4.8 billion yen.

Next is healthcare and life solutions. Adjusted operating income was 4.6 billion yen compared to 4 billion yen in the first quarter last year, representing a year-on-year increase of 0.6 billion yen.

The major positive factors include the increase in the number of rented CPAP devices, and growing sales volumes of orphan drugs such as Urecepass. Most of the volume growth was driven by CPAP devices.

For the pharmaceuticals excluding rare intractable disease areas, we recorded an impairment loss on the sales rights for diabetes treatments last year. This has had a positive impact, accompanied by a decrease in depreciation, amortization.

However, the decline in sales volume of products such as Venola, drug price cuts, and other factors had a negative impact of 0.4 billion yen on the AOI, bringing it to 4.6 billion yen. Next is electronics and energy.

AOI increased significantly to 8.5 billion yen from 5.1 billion yen in year on year. The volume increase is due to accelerated shipments for inventory buildup among customers, as I mentioned at the beginning.

Spread has improved compared to the first quarter last year, as we have passed on the increase in raw materials and fuel prices to our sales prices to maintain the spread. Although these costs have already risen, their impact has yet to materialize, as some of the affected products still remain in inventory.

In terms of the profit contribution, the effect of the sales price hikes materialized before the effect of cost increases, leading to an improved spread. As a result, AOI increased significantly from 5.1 billion yen to 8.5 billion yen.

Next is specialty materials. As I mentioned at the beginning, revenue decreased due to the sale of the composites business in North America.

While adjusted operating income still remains negative, it improved from a loss of 1.8 billion yen to a loss of 1 billion yen. This is mainly due to large-scale periodic maintenance that took place at the aramid plant in the Netherlands during the first half of fiscal 2025.

The subsequent volume recovery had a significant positive impact. The positive impact of capacity utilization was 2 billion yen.

In addition, steady performance in the automotive and other applications resulted in a positive impact of 2.5 billion yen on the overall volume. The situation of spread is slightly different from that of electronics and energy.

Since many of our specialty materials contracts are long-term agreements, negotiations are taking quite some time. As a result, the increase in raw materials and fuel prices materializes before we pass them through to sales prices, which we expect to take effect from the second quarter onwards.

Turning to the decrease in depreciation, amortization due to impairment losses and cost structural reforms, etc., there is a positive impact since we recognized impairment losses on the aramid business in the second quarter last year. Meanwhile, there were some repair costs related to the aramid business, which partially offset the positive impact, resulting in a net increase of 1.2 billion yen in others.

The impact of the TAT exclusion in North America, a negative 2 billion yen, is described separately from the items on the left. These factors resulted in an adjusted operating loss of 1 billion yen in the first quarter this year.

Next, I will review the financial income and costs, as well as the non-recurring items. As for the financial income and costs, interest expenses decreased slightly due to repayment of interest-bearing debt.

In addition, in contrast to the first quarter last year, we have not incurred foreign exchange losses this fiscal year. These factors combined had a positive impact of approximately 3 billion yen on earnings growth.

Moving on to the non-recurring items on the right, one major factor is a gain on the sale of shares of an affiliated company due to the transfer of the aramid paper business. Gain on sales of non-current assets, the item above that column, had a positive impact of 5 billion yen due to the sale of idle land.

As a result, the total amount of non-recurring items increased by just over 50 billion yen year on year. Next, I will review the financial position on the balance sheet.

Total assets stood at 950.2 billion yen, an increase of almost 30 billion yen from 920.1 billion yen at the end of the previous fiscal year. This is mainly due to the significant proceeds from the sale of the aramid business.

Although some of these proceeds were used for debt repayment, this resulted in an increase in cash and cash equivalents. As a result, as of the end of June, both the D/E ratio and the net D/E ratio had improved by around 0.2.

Next, I will review the status of cash flows. Cash flow from operating activities totaled 17.3 billion yen, showing no significant change from the previous year.

Cash flow from investing activities saw an inflow from the sale of the aramid paper business, which reversed the usual negative trend. This resulted in a significant improvement in free cash flow, which stood at 53.6 billion yen.

Let me now explain our earnings outlook for fiscal 2026 starting with a summary. As I mentioned at the beginning, revenue has increased due to the impact of foreign exchange and the pass-through of higher prices for raw materials and fuel.

As a result, we have revised our revenue outlook upward by 50 billion yen to 900 billion yen from the initial forecast of 850 billion yen. The outlook for adjusted operating income, however, remains unchanged at 30 billion yen.

This is due to the reactive decrease in early realization of benefits in the first quarter expected in the second quarter onwards. Profit attributable to owners of the parent is also expected to remain unchanged at 45 billion yen.

The resulting ROE and ROIC remain unchanged from the initial forecast, with a planned dividend of 50 yen per share. Next, a summary of outlook by segment, starting with the revenue outlook.

We expect revenue to decrease in the specialty materials on a full-year basis due to the impact of the sale of the composites business in North America, as I mentioned earlier. On the other hand, in the apparel and industries and the electronics and energy, we expect revenue growth driven by the pass-through of higher raw materials and fuel prices, as well as foreign exchange and other effects.

Overall revenue is forecast to be 900 billion yen. The outlook for adjusted operating income remains unchanged from the initial forecast of 30 billion yen on a full-year basis, given the expected decrease from the second quarter onwards following the front-loaded benefit in the first quarter.

The resulting ROIC is expected to be 8% for apparel and industries, 5% for healthcare and life solutions, 13% for electronics and energy, and 1% for specialty materials in this fiscal year. We intend to gradually move closer to our fiscal 2028 targets.

Now, I'd like to present the outlook by segment, starting with apparel and industries. No particular changes in trend are expected compared to the first quarter.

As mentioned in the bottom, we anticipate volume increase for fiber materials and apparel, as well as industrial materials for areas such as artificial leather and RO membranes, coupled with the strong performance in textile and apparel for North America. We plan to pass through the higher prices of raw materials and fuel to sales prices to maintain the spread, along with the improvement in sales mix.

Meanwhile, we expect an increase in SG&A expenses for sales expansion and integration-related expenses with Asahi Kasei Advance, which is partially offset by the integration effects. As a result, integration expenses are expected to increase only slightly.

Adding those factors, we expect a negative impact of 2.1 billion yen in others, bringing full-year AOI outlook to 19 billion yen for fiscal 2026. Next is the healthcare and life solutions, also unchanged from the trend in the first quarter.

The number of rented CPAP devices is expected to keep increasing, and we expect a 4 billion yen year-on-year increase in volume. While there are positive factors such as Urecepass, a large part of the increase is driven by CPAP devices.

Turning to the pharmaceuticals excluding rare intractable disease areas, we expect a year-on-year decrease of 6.5 billion yen. As we recorded an impairment loss on the sales rights for diabetes treatments at the end of last year.

While we expect around 6 billion yen positive impact due to a decrease in depreciation, amortization, it does not fully offset the negative impact of the Venola transfer. The volume decreases due to the absence of profits from the seven long-listed drugs that I mentioned and the reduction in drug prices.

As a result, we expect a 6.5 billion yen decrease in pharmaceuticals excluding rare intractable disease areas, bringing the overall AOI for the year to 10 billion yen, representing a year-on-year decrease of 3.4 billion yen. We transferred the manufacturing and marketing approvals for the seven pharmaceutical products to LTL Pharma.

As the sales rights were transferred to them at the end of July, profits for these products will no longer be included in our results from August onwards. Next is electronics and energy.

We expect a year-on-year decrease in AOI from 18.9 billion yen to 15 billion yen. The volume is expected to decrease due to the timing difference of shipments and a reactive decrease from the front-loaded benefit in the first quarter.

The spread is expected to decrease in the second half due to a materialization of higher raw materials and fuel prices, as well as uncertainties over these costs, which are on the rise again, affected by the situation in the Middle East and elsewhere. The 1.9 billion yen decrease in the others includes the absence of patent licensing income for separators, and increases in labor and other costs.

Overall AOI for the year is expected to be 15 billion yen. Next is the AOI outlook for specialty materials, which is expected to increase by 12 billion yen from a negative 9 billion yen to a positive 3 billion yen.

One major driver is the absence of extensive large-scale periodic maintenance of the aramid plant in the Netherlands that took place in fiscal 2025. This will increase AOI by 6 billion yen in capacity utilization, along with an expected increase in volumes.

As a result, we forecast a positive impact of 9 billion yen on overall volume. Turning to the cost structural reforms and decrease in depreciation, amortization due to impairment losses, etc., we expect a positive impact of 4 billion yen from the decrease in depreciation, amortization due to the absence of such expenses that we had incurred in the first quarter and the second quarter last year.

We also expect a positive impact from structural reforms, etc., projecting a 6.5 billion yen year-on-year increase in AOI in others. We have disclosed the negative impact of the exclusion of TAT North America in a separate category, which is expected to be 2 billion yen.

Combined, these factors are expected to bring the AOI for the year to 3 billion yen. That concludes my presentation.