Bridgestone Corporation (5108) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you very much indeed for listening to the presentation to be made for Bridgestone Cooperation on mid-long-term business strategy update. First, I would like to present to you our Global CEO and Representative Executive Officer, Shu Ishibashi, to give you the mid-long-term business strategy update.

Hello, everyone. I am Shu Ishibashi, Global CEO of Bridgestone Corporation. Thank you very much indeed for your precious time today, I appreciate. And also, thank you very much for coming over to Kodaira. As we announced, today, we are webcasting from Bridgestone Innovation Gallery n Kodaira, Tokyo. As was explained to you, for the purpose of COVID-19 infection control, we are inviting only a limited number of media and analysts here with us. Now we introduced our mid-long-term business strategy in July and have communicated its update in August. We will explain a part of the concrete measures of rebuilding earning power on the occasion of the third quarter financial results announcement. By the way, that same occasion, we plan to share with you a 4-year forecast as well. Today, as this is the occasion of the opening of Bridgestone Innovation Gallery, we would like to deliver the update from innovation perspective. So I will first explain about technology innovation, supporting our business evolution and about the first phase of our new innovation center, Bridgestone Innovation Park. Then Global CTO, Banno, will explain the details of the technology innovation. This page, we showed it to you last time. Serving society with superior quality has been and is our mission ever since the foundation of Bridgestone. This year, as we mark the start of our Bridgestone 3.0, Third Foundation, we also established a new vision towards 2050, a vision where we continue to provide social value and customer value as a sustainable solutions company. Just as our high technological capabilities have been supporting the development of Dan-Totsu products in the tire and rubber business, our technology innovation will support our further evolution towards the achievement of our vision with continuous innovation through the combination of real and digital. We will be able to provide social value and customer value sustainably in 2050 and beyond. This is our approach to the business evolution explained in August. Technology innovation will support our core business and growth business as a trigger for our next phase of growth. Also, in August, I explained our medium-term business scenarios, our plans to implement a growth strategy and emerge as the new Bridgestone in 2023 as we overcome the current severe situation. With careful considerations, net to the impact of COVID-19, including the possibility of the second wave and the signs of global economic recovery, we have been effectively managing through this crisis and practicing cash-oriented management. Through this crisis, we are rebuilding our earning power by executing on two pillars, while implementing robust expense and cost structure reforms and operational excellence activities. We are also making strategic investments by strictly focusing on businesses which will generate solid profitability. One of the major strategic investment is, Bridgestone Innovation Park where we have invested approximately JPY 30 billion for the first phase as a trigger for our next phase of growth. We have been enhancing our high technical capabilities by accumulating data through on-site and customer-oriented field engineering services and by repeating testing and validating activities based on our engineers' empirical know-how. The ability to gather enormous amounts of data and the crafts person skills utilized during Genbutsu-Genba activities, which are on location observation of physical actual products and sites, are the source of our strength in the real environment. Going forward, we will accelerate technology innovation by combining digital strengths with this strong and high-quality real base. This enables us to operate faster, easier and more accurately with greater amounts of data. With this unique combination of real and digital, the evolution of Dan-Totsu product development and Dan-Totsu solutions can emerge at an accelerated pace. Let us look back on the history and evolution of mobility, wheels and tires. It is said that wheels first appeared in an ancient Mesopotamia. Over the course of history, wooden wheels were used on horse-drawn wagons. And with the transition from horse-drawn carriages to automobiles, pneumatic tires were invented to provide better comfort and to accommodate faster speeds. Ever since the invention of rubber pneumatic tires nearly 140 years ago, tires have become ubiquitous and have supported every imaginable form of mobility. As tires have continued to evolve, so too has Bridgestone. The company founded in 1931 established its first technology center in Kodaira, Tokyo in 1962 and has made contributions with our unique technology. As a pioneer premium products, in 1979, we introduced the high-performance POTENZA brand tires. And in 1981, introduced Regno brand products, which offered a balance of comfort and drivability. Subsequently, we introduced several brands that enjoy strong global reputations, such as RFT technology that allows vehicles to move safely and securely, even with a flat tire and the BLIZZAK series, a superior winter tire brand that enables safe stopping and turns on icy and snowy roads. We have also developed various Dan-Totsu products, such as ECOPIA with ologic and ENLITEN technology that achieve lightweight and support low-fuel consumption. With these and other Dan-Totsu products, we have been showcasing the attributes of our products and technologies by participating in Formula One from 1997 and MotoGP from 2002. To further support the new mobility as represented by MaaS and CASE requires new innovation or new innovative ideas and evolution. We will promote and accelerate innovation at Bridgestone Innovation Park, the first phase of which is scheduled to be completed by the end of 2021. As mentioned earlier, in the 1960s, we established a plant and technical center in Kodaira, Tokyo, with the aspiration to contribute to motorization in Japan, creating a community in partnership with the local society and Bridgestone and contributing to the regional environment and our teammates' health. We built the Tokyo plant and technical center close to and facing each other to enable collaboration and product development. We also built health and wellness facilities in this area surrounded by green space, such as company apartments, a hospital and a supermarket and donated an elementary school. These contributions continue to thrive today while evolving to keep up with changing times. And to realize the vision towards 2050, we've been working on renovating the Kodaira area with a view to creating future value from Kodaira, the birthplace of Bridgestone's technology. Based on the 3 pillars of contributing to safe and comfortable mobility for society, contributing to active and fulfilling life for all and contributing to sustainable global environment. And now this Bridgestone Innovation Park is reality. Bridgestone Innovation Park Phase 1 is a multifaceted facility, intended to accelerate innovation in the areas of technology, business models and design, all in support of the creation of new social value and customer value. To do so, we begin with interaction with empathy for co-ideation, co-R&D and co-creation with society, customers and partners. In the first phase, we will open 3 facilities, including this Bridgestone Innovation Gallery. The Bridgestone Innovation Gallery introduces our history, DNA and current and future activities. We've positioned it as a new place where we can connect and interact with our customers, stakeholders and society in general. We also plan to open it to the public in November this year. Let me briefly introduce the components of the Bridgestone Innovation Gallery. The first area is titled, Who We Are. Here, we communicate our history of challenges and accomplishments through the display of our history and DNA. In What We Offer, we highlight and introduce a new value that we create and provide to society and our customers as we support the mobility. In How We Create area, visitors can experience our co-creation and innovation activities. The last area is Where We Go. Here, we intend to communicate with our visitors to learn more about the initiatives that will lead us towards Bridgestone's new and next chapter by experiencing them both in real and digital form. This Bridgestone Innovation Gallery also has a role as an entrance to the Bridgestone Innovation Park. By having all our customers enter through the Bridgestone Innovation Gallery, we hope that they will get to know us and better feel and experience and understand our vision. B-Innovation is scheduled to open by the end of 2021 as a new facility that enhances and facilitates our innovation. With those who feel connected to us through the Innovation Gallery and our various innovation activities, we will actively enhance co-ideation by utilizing cutting-edge technologies such as VR and develop and test through co-R&D. And then we will take advantage of the results to promote co-creation to generate new values with collaborative partners. B-Mobility is demonstration and testing facility with thorough test courses and data analysis capabilities where we can quickly and in agile manner, validate the ideas generated in B-Innovation using real vehicles, which is scheduled to open by the end of 2021. By combining real and digital, it enhances agile development that promotes an iterative test and learn approach that repeats develop and test immediately. With these 3 facilities opening in the first phase, the Bridgestone Innovation Park will contribute significantly to our mid-long-term business strategy as a new base for co-creation of new values. In addition to Bridgestone Innovation Park in Kodaira, Tokyo, we have 2 other innovation sites, the Digital Garage in Rome and the Mobility Lab in Akron, Ohio in the United States. Each site works a center of excellence in the area where it has its unique strengths to lead innovation and solution activities and collaborate with all other Bridgestone SBUs on a global basis. The approach of commonality and modularity that I explained in August and the development simulation technology to be introduced later today have been developed in collaboration with these sites. These sites are also important contributors as we analyze market and customer data using a unique algorithm to improve the accuracy of wear prediction and other tire performance predictors, leading to the evolution and growth of the Solutions Business. These activities combine the strength of a strong real and digital approach on a global basis. In order to further accelerate our initiatives and vision forward, we share market data, R&D data and other intelligence collected at each site and incorporate them into various analysis and studies. The Bridgestone Innovation Park serving as a hub enables us to produce agile and solid outputs. Next, Global CTO, Banno, will explain the details of technology innovation. Thank you very much.

Thank you. You just listened to the presentation by Mr. Ishibashi, our Global CEO. To follow, here I am to introduce to you Senior Vice President and Executive Officer, Global CTO, Masato Banno, on the strict subject of technology innovation.

Hello, everyone. I am Masato Banno, Global CTO at Bridgestone Corporation. Following on from our CEO's presentation and about Bridgestone Innovation Park, I would like to explain about technology innovation. First, let me explain our approach to our technology innovation. The foundation of our technology innovation is our vision towards 2050 that we continue to provide social value and customer value as a sustainable solutions company. In other words our technology innovation supports the sustainability business model, which creates social value and customer value and is the source of competitive advantage. Rubber, the backbone material of tires has a unique material characteristic called viscoelasticity. Just to give you an example, as you all know, rubber expands and contracts. With an iron spring, hotness of the spring is not affected by the speed or the magnitude of expansion. However, going to rubber, the speed of expansion affects the hardness of rubber and the magnitude of expansion does change the hardness. Furthermore, the ambient temperature would also affect rubber hardness. So such complex behavior makes it extremely difficult to handle at the development and production sites. We, at Bridgestone, have overcome these difficulties by making full use of the overwhelming experience and data accumulated by our experts in the field over many years as a leader in the industry and have created the highly acclaimed product lines as a result of that. This is what we call "strong real rubber mastery." As I will explain in further details later, we will continue to create social value and customer value by combining this strong real with the evolution of our digital transformation to create innovation and Dan-Totsu products and service -- products and solutions, which will result from this innovation. Ladies and gentlemen, this is our efforts into technological innovation. Let me explain in a little bit more detail. This slide shows Bridgestone's idea of innovation through the fusion of real and digital technologies. Through strong real and digital technologies, we will innovate product development, including materials and manufacturing, and provide products and services to our customers and markets throughout the value chain. We will also provide new value to our customers by creating solutions at touch points of society and customers through the use of and the enhancement of digital technology. In addition, further, through our solutions, we will accelerate innovation for development by feeding back and utilizing the information we gather from our customers. This slide, which is Slide #16, shows our approach with concrete images. As I explained at the beginning of my presentation, it is very difficult to understand the complex behavior of rubber and tires. And our great strength is our technology to master rubber. In other words, to see, analyze and manage, which is supported by data and experience and cultivated by our skilled records masters over many years. This is the strong real. Our simulation technology, which digitally connects these experiences and data and makes them visible, increases these strengths even further. We combine the best knowledge, expertise and database we have acquired in product development, materials manufacturing and monozukuri, which is manufacturing, with tire performance simulations, material simulations and manufacturing simulations in order to create innovations and can provide new value to markets and customers. Furthermore, by analyzing tire and mobility data with our unique algorithms, we are able to understand the condition of the tires that our customers are using. By feeding this data back into the engineering chain, we are able to realize the values by our lab and develop Dan-Totsu products and solutions for our customers. It's only because we, with our strengths, we can achieve innovation through the combination of strong real and digital. And that is what we call digital transformation at Bridgestone. Now let me explain each of these in detail. We have developed the strong real, the rubber mastery. Bridgestone has extensive real-world experience with many different tire applications to meet many different customer requirements, whether it's the maximum group of Formula One race car, the maximum load of a mining dump truck, the maximum speed of an aircraft or the longest life of a truck. We know all the road types and conditions that customers around the world are utilizing. This is how we realized the strong real. This strength allows us to achieve our measurement and analysis technologies that we have built to see, analyze and manage the strong real and the material technologies and highly acclaimed product lines that we have created utilizing these technologies, such as POTENZA, Regno, ECOPIA that may be familiar to everyone. Combining the strong real with digital technologies brings about innovation. Let me elaborate starting with the next page. The first example is the advanced design simulation that comes from combining structural CAE, computer-aided engineering, with the strong real. Bridgestone has a vast amount of high-quality market information and the tire information. Combining this information with structural CAE enables advanced design simulations. It becomes possible to simulate the deformation and contact behavior of tires, not only on snow and wet road surfaces, but also on soil and sand. Furthermore, by combining with other models, combined simulation of tires and suspensions, combined simulation of tires and vehicles also become possible. Our Dan-Totsu products such as Bridgestone MASTERCORE tire for mining vehicles and our tire technology for passenger cars such as ENLITEN resulted from such combination of the strong real and advanced design simulation. We will continue to work on strengthening these activities and accelerate the creation of social value and customer value. The second example is a material and compounding simulation that is realized by integrating molecular CAE with the strong real. We have accumulated a vast amount of laboratory data through handling a wide variety of rubber materials, and this is a core part of our strong real technology. Combining this laboratory data with nano-level molecular CAE enables advanced material and compounding simulations. SUSYM, one of our innovative materials, resulted from such integration of a vast amount of laboratory data, the strong will of our company and the material and compounding simulations. SUSYM is the world's first polymer that joins rubber and resin at a molecular level and dramatically improves strength and durability over conventional rubber. We will further accelerate the development of such materials to contribute in various fields beyond the framework of tire materials for the creation of social value and customer value. The third example is a proprietary algorithm that combines the strong real and digital technologies. By applying the advanced simulation that I just described in the analysis of a large amount of real-time driving data of customers in the market, we can make an accurate determination of the current condition of the customers' tires. This is Bridgestone's proprietary algorithm made possible because of our deep and extensive knowledge of the roads around the world and our ability to access detailed customer data from around the world. We believe that by accurately understanding the condition of our customers' tires, we can offer new social value and customer value, such as customization of tire performance, optimal use of tires, efficient maintenance and optimal operation. Going forward, we will further strengthen the development of these algorithms and accelerate the development of Dan-Totsu solutions. An example of value co-creation through performance prediction using our proprietary algorithm is the Aircraft Solutions business that we recently announced our collaboration with Japan Airlines. Aircraft tires are used under extreme conditions, supporting the weight of the aircraft while repeatedly taking off and landing at high speeds, needing to be replaced after hundreds of takeoffs and landings. In addition, the rate of growth of tire wear varies depending on the environment in which the tires are used, which has led to unpredictable tire changes and intensive replacement schedules. By combining Japan Airlines and J-AIR's aircraft data and Bridgestone's proprietary wear prediction technology, we were able to predict the timing of tire replacement, making it possible to provide highly accurate and planned tire replacement. This is expected to reduce the inventory of wheels and tires and improve the efficiency of aircraft maintenance work. In addition, by reducing CO2 emissions in the production and the use processes, it will lead to symbiosis with the earth. Bridgestone has started to extend its aircraft tire technologies and services to other tire categories such as trucks, buses and passenger cars. This is a summary of what I have presented to you so far. We have built a strong real through the development of products based on the experience and abilities of our engineers and the skills of our master craftsman on the ground. By fusing the strong real gained from these artisanal skills with our own digital technology, we will provide Dan-Totsu products and create social value and customer value. This is what we call real and digital development. On the other hand, we know roads of the world. And through the use of digital technology, we'll be able to obtain a large amount of highly accurate market information in real time. By analyzing this information with our proprietary algorithms, we are able to predict the performance of the tires used in the market and provide Dan-Totsu solutions. Furthermore, by feeding back the data obtained from the algorithm to the development process, we can improve the level of development and accelerate the provision of Dan-Totsu products. By connecting the artisanal technique and the capability on site, Genba, with digital technology, we will develop faster, more accurately and more easily the Dan-Totsu products. It can be said that it is a value spiral up by digital technologies. This is what we believe to be the innovation in the engineering chain, and this is a new way of working at Bridgestone. The Bridgestone Innovation Park, the Phase 1, is a global hub for creating new social value and customer value by accelerating the new work style that we have been talking about. Here, we will create new value through B-Innovation and B-Mobility and B-Innovation and Bridgestone Innovation Gallery. B-Innovation and B-Mobility, this is where engineers can accelerate the development of products by far -- by turning small, quick-moving thinking. The strong combination of real and digital technologies allow new ideas to be quickly prototyped, informed and experimented in the B-Innovation and immediately verified and validated in the B-Mobility right next door. B-Innovation and Bridgestone Innovation Gallery, this is a place to engage in innovation activities, interaction, co-ideation, co-R&D and co-creation. We will create new innovations by increasing new touch points with various stakeholders, both internally and externally, sharing our products and technologies with them and discussing further direction collaboratively as new partners for social and customer value creation. And we are beginning with interaction with empathy at the Bridgestone Innovation Gallery. The rubber sensing technology using AI and wirelessly powered in-wheel motor that we have already announced are examples of interaction with empathy. Today, I explained the idea of technological innovation. We create innovation by combining the innovation of digital transformation with the strong real rubber mastery, this is our idea of technology innovation. Our highly acclaimed products are created from the measurement and analysis technology obtaining by mastering rubber. This is the strong real. We will accelerate the development of Dan-Totsu products and Dan-Totsu solutions through innovation in the engineering chain that combines the strong real with our unique digital technology. At Bridgestone, we will continue to create social value and customer value through continuous innovation. Thank you for your attention.

So thank you. That was the presentation by our CTO, Mr. Banno. Ladies and gentlemen, this is the Q&A time. If you have a question, please raise your hand. So let us start.

Thank you very much. My name is Sakamaki, and I'm with Daiwa Securities. So my question focuses on the concept of innovation. As you talk about innovation at Bridgestone Corporation, what sorts of technologies over what time schedules within reason that you can share? Please substantiate further. Looking from outside, the concepts such as commonality, modularity should be conducive to the enhancement of productivity. And also, although you did not mention anything particularly about the half-weight tire, that should create further cost benefits. So what technologies over what the time line?

Thank you. So I will answer, this is Banno speaking. Domain of innovation at Bridgestone Corporation. First off, we would think that the society will demand coexistence, have collaboration or symbiosis. With tires and for that matter, the entire automobile on the oriented society and the wheel go into that direction. So half-weight tire sustainability, inclusive, of course, of materials or collectively will be subject to effective utilization or the reuse. So that is going to be the point of focus. Going beyond, however, I cannot say exactly by when and exactly what technologies, but those will be the areas of focus.

If I may, this is Shuichi Ishibashi speaking, I would like to supplement a little bit further. MASTERCORE, which is the tire for the mining operators that we announced rather recently, that's a very good and interesting example. Because there we're talking about completely new and novice, the material technology and the base resistance of tires, so if I may, that's the prowess of the tires is featured. This -- so one tire, and again with that, the multiple conditions of use, which is totally different from conventional mining operator approach, where multiple tires would have to be made available to fit the exact conditions of use. So if you're able to come up with this solution, which we are doing now, then it's very beneficial for the overall resource productivity, inventory reduction, R&D productivity gains and productivity efficiency improvement. This is a win win-win situation for everyone. Now you talked about commonality and modularity. That's a concept of the customizing. Listening to customers and what they want. And that's exactly what we have been doing over time. But when we said customization conventionally, that meant that we would have customized everything for that customer for that particular tire demanded. So including the structure of the tire, everything had to be customized. That's not what we are talking about here. The bases saved, the base structure will be kept simple. And we will be open to customization and the requests coming from customers, including tread that played -- treading process and so on. So that's very beneficial for productivity efficiency at the company, Bridgestone, not to mention the satisfaction of customer requirements. So the entire perspective of value chain has to be made ready then to move into that direction. So that we are able to respond well to the customers' requirements. So that's what we are going to do for one. And then another thing, how to create the customer value? The conventional -- the product strategy or the product planning started with voices of the customers. So that approach would survive into the future. However, in addition to that -- by the way, the conventional strategy which audit BLIZZAK, Regno, POTENZA, those tires, on top of that, we would advocate solution business model, which means that in the case of truck and bus tires, it's not only the tire -- the new tires, but we tread and also maintenance services, all-inclusive and will be the value that which we can offer to customers. Again, conducive to resource productivity, CO2 emission gains, which are exactly the points that the society demands. In order for us to be able to do that, we need the fit tires with high-level tolerance, with long life, resilience, not just the surface of the tires, but also the retreading. Speaking of retreading with some of the truck and bus tires, we're talking about twice or 3x retreading the capabilities. For aircraft tires, it's 3 or 4x retreading. So those new features in our solution offering to customers. Now in the coming days of the so-called CASE, with the shared the December as, the PSR, passenger car tires, they would have longer or the higher level utilization, those tires have to last longer. At the same time, because these are passenger car tires, the right comfort is very important. But on top of that high-level endurance and the tolerability, then we would model the ideas and technologies, which have been used in aircraft tires, truck and bus radial tires and mining tires. And we see another example from Toyota Motor, for instance, e-Palette, the same -- the vehicle carrying not just cargoes but also people. Well, not just passengers but the different loads. So depending upon the needs in that particular condition, then the inner pressure of the tire can be adjusted. If, for instance, moving cargo, the [indiscernible] and the inner tire pressure level, so that heavier load can be carried. At the same time, if the people are going to ride in the same vehicle, then the inner tire pressure will be adjusted lower. So that right comfort can gain. In order for us to be able to do that, the basic structure of the tire would have to be adjusted to fit well. So we are exactly going to move in that direction. We would need the new stage to compete and operate. As we have been advocating, we will always establish the new stage we know we stand and compete. And if we don't do that and the players from South Korea, India and China will just catch up to where we are. So we are going to continuously work ahead of the competitors. That's our style of innovation. Now speaking of in 2023, the medium-term business model on the two. Once again, the -- we capture the excellent company status from where we are today, this year being very difficult for everyone, including Bridgestone. We need new products which can serve as a solid core. And we made the first announcement in that regard back in August, namely MASTERCORE. We are going to [indiscernible] more and more solutions for more and more different areas, so please wait for that.

Thank you. Let's go to the second person with question.

My name is [ Kubono ], and I'm with Nikkei xTECH. I do appreciate this opportunity today. So my question focuses on the open innovation, which I understand you start up towards the end of 2021. So the concept of the co-R&D, co-creation, you did partner -- the companies to work with, how many companies would you invite? And the companies with what sort of technologies would you interested in inviting and working together?

So 2021, yes, so what we are doing, what we need to do is to exactly increase the number of touch points so that we can increase the opportunities. You just heard those companies that we work with. Right now, if any, we are still working with the funnels and counterparts operating in the same materials domain, this or similar sets of technologies coming together to work. That's what we are doing today. However, we are starting to show to the market things new. Something like the rubber sensing technology using AI or the wireless power supply to in-wheel motor. Those are the ideas and technologies that we worked together with partners. These partners, by the way, are not at all in the same area that we operate in. So with totally different corners of the overall business community. And for that, the Bridgestone Innovation Gallery is going to be the very important starting point. And that's right. I would like to add a little bit further because back before the opening or the availability of Bridgestone Innovation Gallery, back in 2018 or '19, we had 2 occasions to invite 50 or so companies. 5-0, 50 companies in each session so that we can come together. And the co-ideation started up already. Now there are some opportunities to start co-R&D and as we finalize those arrangements, we will let you know.

That's right. This is Ishibashi, I would like to supplement a little bit. We, over the years, have been working together with OE and the automobile assemblers. Not only the domains or passenger car tires and truck and bus tires, but also for construction machinery, agriculture machinery or aircraft tires and machinery operators and manufacturers. So today, what we are doing is going beyond the directing together with those parties, where we would have been shown the specifications to build our products to match the needs of those companies. And of course, those supply use status in those relationships will continue, but it isn't going to go beyond that because we will be and we are already starting to see that certain companies and parties are starting to invite us to get into their -- the process of R&D from the early phase of the R&D activities, so that they would share with us the data and information. And then we can offer proposals to them, the new wave approach, the new sort of partnership. So we are starting to see multiple arrangements and examples of that, which are very intriguing. One good example is BMW's i3 electric vehicle running on Bridgestone's ologic. This was a typical example of Bridgestone being involved in BMW's development effort from very early stage. Collaboration with Japan Airlines is another example. Various types of information provided from the mobility side are combined with the information from our tire side to create a new value, which is possible only through co-creation. We can't do it alone on the tire side. The new value is created, which is being explained one project at a time, and that is well accepted. When we announced the collaboration with Japan Airlines, others showed interest. And so we see an increase in the members of the community. And that's how this expands. And as we do the good job, trust is built and the customer will refer to us to their customers. And that is how the community expands. And so this is a typical example. And as mentioned by Mr. Banno, naturally, other than OEMs there are others that show interest other than mobility community, which was very interesting. There are some exciting projects, and I can't give you the details yet. But recently, I had a meeting with top management of such potential partners. And we will let you know as we see our progress. And we would like to see more of such projects. Invite people to this Innovation Gallery so that they will be interested and inspired so that we can work together. That is our expectation.

[ Hiraoka ] from NewsPicks. Now one of the cloud service providers said that 2 years' worth of digital transformation was completed in just 2 months. And I'm wondering what the case is for Bridgestone. I presume this has been a very difficult time with restrictions on commuting, visits and travel and most probably reduction in production volume as well. But conversely, because you can only work remotely, you might have seen much faster progress in the implementation of digital transformation. Were there such cases?

In fact, there were so many pleasant surprises. Initially, we were faced with such issues as the limit on the number of access. But we actively worked on expanding the framework to get over that and increased the instances of working remotely. Previously, we have insisted on the principle of Genbutsu-Genba, but under the restricted environment, when we started using web cameras, something interesting happened previously. Only a handful or 10 people could be at Genba. Whereas through web cams, dozens of people can view the same thing at the same time. This was an eye-opening experience for us and the same for design. We've traditionally insisted on Genbutsu-Genba. So a cross-section of a tire were examined and assessed physically and assessed and discussed what went well, what worked and what didn't work. Whereas in a remote working setting, many professionals could look at the very same cut sample at the same time and engage in a discussion. Same for drawings, where good old Japanese tradition persisted. But almost overnight, we moved into the digital electronic format, which reduced time to get things done. Those were pleasant surprises.

Let me add, last year, we completed the acquisition of Webfleet, a Dutch mobility solution provider, which is in the business of converting the digital technology to value. And Webfleet has lots of various truck information and how to link that to development efforts at Kodaira as an engineering chain so as to make a direct contribution development. That is a crucial question. And we saw a big progress there. Conventionally, people will be at the site at Genba for a face-to-face meeting. But in the current environment, engineers on both sides share data and collaborated remotely. And this is where it got really interesting. As Mr. Banno stressed, there is a beauty of sensibility or intuition of skilled craftsmen honed over years and years of handling complexity of rubber. This does not exist in Webfleet, the mobility experts. But rubber experts, when faced with the vast amount of Webfleet's data, can pick up where potentially relevant data are and can say this and this and this part look to be potentially relevant. And that is gathered at Kodaira and analyzed and create value. And we witnessed something new being created, a new engineering chain being built. And that was really interesting. So the strength of 2 entities, the best of 2 worlds in the Netherlands and Kodaira, Tokyo. It could be said that it worked because of the situation we're in because we're desperate. Previously, we might have tackled a vast amount of data by a brute force. But today, in this environment, we have to choose. And that's where the sensibility of skilled craftsman came to play. Very interesting. Perhaps that's not the kind of answer you were expecting, but we are seeing many such interesting cases now. Could you repeat the question? The microphone was not on.