Hitachi, Ltd. ($6501)

[Foreign Language] The scheduled time has come. We will now begin the briefing session on the progress of Inspire 2027 management plan and consolidated financial results for the year ended March 31, 2026. First, President and CEO, Tokunaga, will say a few words. Mr. Tokunaga, please.

This is Tokunaga speaking. Thank you very much for joining us in such a busy schedule today. At this moment, Mr. Kato, the CFO, will talk about the earnings for FY 2025 and the 3-year management plan from 2026 to 2028. Inspire 2027, I will explain. Although we operated our business in a highly uncertain environment in fiscal year 2025, we think we were able to get off to a good start toward sustainable growth that Inspire 2027 aims for. Now, let me turn it over to Mr. Kato for a presentation. First, Kato will now explain the consolidated financial results for fiscal year 2025 and the outlook for fiscal year 2026.

First, I will outline the key performance highlights of this earnings announcement. Regarding the results for fiscal year 2025, in addition to continued strong performance of the Power Grid business in the Energy segment, Domestic IT business in DSS and Railway business in Mobility served as key drivers, resulting in year-on-year increases in both revenue and profit for Hitachi's consolidated results. Adjusted EBITDA, net income and free cash flow all reached new record highs. In addition to improved earnings in Energy and DSS, the expansion of the Lumada business led to a 1.3 improvement in the adjusted EBITDA margin. Furthermore, on top of the increase in profit, core free cash flow also rose due to advances received. We were able to achieve results that exceeded our initial plans for the fiscal year, moving us closer to achieving the goals of Inspire 2027. Key financial KPIs to note include 8% year-on-year increase in revenue and a 21% rise in adjusted EBITDA. Furthermore, net income attributable to owners of the parent exceeded JPY 800 billion for the first time. All 6 KPIs have improved compared to the outlook announced at the end of January. Next, the outlook for FY 2026. With the energy sector performing well in the Power Grid business and the DSS also showing a solid growth outlook, all 4 sectors are projected to see increased revenue and profit. Even after factoring in increased strategic investments and the risks associated with the Middle East in quarter 1, we expect profits to grow further from the significant increase in the consolidated results for FY '25. Meanwhile, risks related to the situation in the Middle East could significantly impact our earnings outlook for the current year. So we will continue to monitor the situation closely. In terms of the financial KPIs to note, revenue is projected to grow by 5% year-on-year, while core FCF is expected to decline. Excluding the impact of large advance payments, it's projected to exceed the previous year's level. Additionally, regarding ROIC, the forecast incorporates the impact of growth in investments as an assumption and is expected to largely be in line with the previous fiscal year. Next, highlights by segment for FY '25. In the DSS segment, domestic sales for Front and IT services grew by 7% due to the expansion of domestic DX and modernization businesses centered on Lumada business. In the storage business, although annual sales decreased due to restrained customer investment in overseas markets and the focus on block storage, profitability improved thanks to a focus on core products and cost-cutting measures. In the Energy segment, the Power Grid business saw increased revenue and profit. Due to continued strong demand for power grid equipment and favorable foreign exchange fluctuations by region, sales expanded across all regions, particularly in Europe, North America and the Middle East. In the Mobility segment, the Lumada business, including Railway Signaling Systems performed steadily and combined with favorable ForEx fluctuations, revenue and profit both increased. In the CI segment, while overall revenue declined due to reduced demand for new elevators and escalators business in China's building systems market, revenue in the Measurement and Analysis Systems business grew by 9% year-on-year. Additionally, profitability for the CI segment as a whole improved due to increased sales of semiconductor manufacturing equipment and expansion of the Building Systems' digital services business. Finally, regarding the Corporate Items and Elimination, these results were achieved through the strengthening of corporate strategic investments. Next, here are the highlights by segment for fiscal year 2026. In the DSS segment, domestic operations are expected to expand led by the Lumada business. Additionally, in the Storage business, we will continue to expand sales of our core block storage products and prioritize project governance focused on profitability to further improve earnings. For the DSS segment as a whole, we expect both revenue and profit to increase further from the growth seen in fiscal year '25. In the Energy segment, the Power Grid business is expected to see increased revenue and profit as demand for power transmission equipment remains strong. In Mobility, Lumada businesses, such as railway signaling systems, are performing well and revenue and profits are expected to increase. The order backlog increased in FY '25, and we anticipate long-term growth. In the CI segment, while revenue is expected to decline due to the capital restructuring of Hitachi's GLS home appliance business, revenue and profit are projected to increase, driven by expansion of Lumada businesses across various sectors, including measurement and analysis systems and building systems. Finally, regarding Corporate Item and Elimination, this outlook incorporates an increase of JPY 30 billion in corporate strategic investment and a JPY 20 billion risk impact related to the situation in the Middle East in the first quarter. Next, I will explain the impact of the situation in the Middle East. In the Middle East, delays in some production processes have occurred since March. But as of today, the impact remains limited. In this FY 2026 forecast, we have estimated the direct impact on our company for the first quarter based on current assumptions and incorporated this as a Middle East risk. The situation in the Middle East is highly fluid, and we have not been able to incorporate the direct impact on earnings from the second quarter onward nor the indirect impact on our company resulting from effects on our customers. We have incorporated a risk of a JPY 40 billion decline in revenue and a JPY 20 billion decline in adjusted EBITDA into the Corporate Item and Elimination as direct impacts on the first quarter. This primarily reflects potential delays in major projects in the Middle East as well as shortages and cost increases for certain raw materials. We expect this to potentially affect sectors such as energy, CI and mobility. The risk factored in here reflect our outlook as of today, but we believe the impact of the situation in the Middle East could fluctuate significantly in the future. So we will continue to closely monitor the situation. Here, I will explain the progress of DSS's growth strategy. Looking back at the major achievements of FY 2025, we further improved profitability across the entire DSS, achieving an adjusted EBITDA margin in the 15% range for the first time. Regarding our Domestic Front and IT Services businesses, DX and Modernization businesses grew steadily, and we promoted the application of AI and system development for domestic SI projects, achieving an average 10% improvement in production efficiency. In the Services and Platforms segment, we strengthened our high-value-added service business, leveraging AI. GlobalLogic is expanding synergies through initiatives such as HMAX solution development for other internal sectors. And in quarter 4, revenue, including synergies, grew 44% year-on-year. Furthermore, AI and IT services in North America are performing well. In Q4, Hitachi Digital Services revenue grew by 10%. Meanwhile, in the Storage business, as a result of cost optimization and business restructuring, the U.S. dollar-based profit margin improved by 2.6 percentage points year-on-year in Q4. Additionally, driven by launch of new products in our high-end block storage segment, revenue also increased compared to the same period last year. Regarding our future growth strategy, we will drive the digital transformation of the OT and product domains within the Hitachi Group through initiatives such as the development of HMAX solutions. We will support this effort through an integrated delivery effort led by GlobalLogic and Hitachi Digital Services. Furthermore, we will thoroughly implement AI to further improve productivity in system integration, development and operations and continue to expand sales and profits in the DSS segment. Next, I will explain the progress of Hitachi Energy's growth strategy. Sales revenue have grown steadily, thanks to measures to expand production capacity and improve productivity in response to long-term upward trend in order backlog. We will continue to aim for long-term sales growth. We will also actively expand our service business. Last year, we acquired a minority stake in Shermco, an electricity services company in North America and are working to strengthen our service delivery capabilities. Regarding HMAX, the core of Lumada Digital Services business, we are expanding sales of HMAX Energy, a next-generation AI service solution for energy infrastructure that we began offering in March. Furthermore, through collaboration with Microsoft, we have enhanced our AI-powered Lumada facility management solutions. In FY '25, we accelerated measures aimed at improving corporate value. Let me explain the situation. First, we continued the restructuring of our business portfolio following on from Q3. As announced last week, we reached an agreement with Nojima to establish a new company based on strategic partnership for our Home Appliance business. Furthermore, as announced in March, we reached an agreement with Oki to integrate our ATM business. Going forward, the ATM business will be subject to equity method accounting. Meanwhile, to expand HMAX Mobility, we announced the acquisition of Clever Devices, a U.S. company specializing in intelligent transportation systems for public transport. Regarding capital allocation, we plan to increase the total amount of shareholder returns for FY '26 to approximately JPY 800 billion on cash basis. In line with our previous policy, aiming for stable growth, we will increase the year-end dividend for FY '25 to JPY 27 per share, a JPY 4 increase from FY '25 interim dividend. Furthermore, including the projected interim dividend for FY '26, total expenditures for this fiscal year will be approximately JPY 250 billion, an increase of JPY 50 billion year-on-year. Regarding share buybacks, in line with our previous policy and taking into account cash flow forecast, asset sales trends, growth investment prospects and financial condition, we have decided to buy back approximately JPY 550 billion on a cash basis. This includes a portion of the amount resolved in FY '25. So on FY '26 resolution basis, the total will be JPY 500 billion, an increase of JPY 100 billion year-on-year. Now, let me explain the results for FY '25. The actual figures are as explained in the points at the beginning. I will now explain the breakdown of year-on-year changes in FY '25. Revenue increased by 7%, even excluding the impact of foreign exchange due to increases in energy, DSS front-end business services and mobility. Adjusted EBITDA followed a similar trend to revenue with increased profits in energy, DSS, front-end services and IT services, resulting in 1.3 percentage point improvement in the adjusted EBITDA ratio, even including the impact of U.S. tariffs and increased strategic investments. Net income improved by over JPY 200 billion in operating profit. While there were impacts from the sale of the air conditioning joint venture, increased costs related to structural reforms and increased income taxes related with share transfer, we were generally able to translate this improvement in operating profit into an increase in net income. Core free cash flow, excluding the impact of advances received effect from large projects, increased by approximately JPY 300 billion year-on-year, mainly due to an increase in adjusted EBITDA. Next, I will explain our financial position. Total assets at the end of FY '25 is approximately JPY 15 trillion, an increase of approximately JPY 1.7 trillion from the end of FY '24 due to increased sales in energy and other sectors as well as FX fluctuations. Cash conversion cycle decreased compared to the end of FY '24, mainly due to an increase in advanced payments. Next is regional revenues. Overseas regions expanded primarily in Europe. Energy expanded across all regions, mainly in other regions, including Europe, North America and the Middle East, resulting in a 24% growth overseas. Mobility expanded in Europe, North America and other regions, including the Middle East and Africa, driven by rail control systems, resulting in a 15% growth overseas. Next, I will explain the order results by segment. In DSS, Front business increased by 7% annually, driving the overall increase in DSS for FY '25. In Energy, although there was a decrease in nuclear energy due to high base effect from previous year's large-scale projects, power grid's business increased by 17% year-on-year due to strong demand for transmission equipment and data center-related demand. And the order backlog also increased compared to the end of last fiscal year. In Mobility, there was a decrease in year-on-year due to high base effect from large-scale projects in the previous fiscal year. But in Q4, orders for rail vehicles and rail control systems increased. The order backlog, including the impact of foreign exchange, increased compared to the end of FY '24. CI as a whole grew 10% annually. In particular, the Measurement and Analysis Systems business, which saw an increase in Healthcare and the Industrial Digital business, which saw growth in Robotics SI, both increased. Next is highlights for FY '26 forecast. The main points are as explained in topics section at the beginning. Regarding exchange rate assumptions, we've used JPY 150 to U.S. dollar and JPY 175 to the euro this time. I will now explain the breakdown of year-on-year changes. Excluding the FX impact, business restructuring and Middle East risk, revenue is projected to grow by 7% year-on-year, driven by increases in energy, DSS, CI and others. Adjusted EBITDA shows a similar trend, excluding increases in corporate strategic investments and the Middle East risk, EBITDA margin is projected to be 13.1%. Net income for the current period will be affected by fluctuations in nonoperating income and expenses and business structural reform expenses resulting from business reorganization, reflecting the business portfolio reforms implemented in FY '25, but operating profit is expected to increase, resulting in an expected year-on-year increase. Core free cash flow, excluding the impact of large advanced payments, is expected to increase year-on-year despite increased CapEx such as capital investments for production increase due to increased adjusted EBITDA and improved net working capital. Next, regarding the performance by segment, the overview is as explained on the segment highlights page at the beginning. Here, I will explain the changes to the reporting segments. This mainly reflects changes to subsegments within DSS and CI and the transfer of a portion of Industrial Digital business from CI to DSS. Finally, I will explain the Lumada business, which is a pillar of our growth business on Page [ 30 ]. I will now explain the performance of the Lumada business and the HMAX solutions within the Lumada Digital Service business. In FY '25, Lumada accounted for 40% of Hitachi's consolidated revenue and 16% of adjusted EBITDA. For FY '26, we plan for revenue to reach approximately JPY 4.8 trillion, a 16% increase year-on-year with revenue ratio of 44% and adjusted EBITDA of 17%. Regarding HMAX business, revenues in FY '25 were approximately JPY 300 billion with an adjusted EBITDA of 22%. We aim for JPY 480 billion in FY '26. Regarding HMAX Solution, which is the core of Lumada's Digital Services business, the various OT sectors in DSS collaborated to develop new solutions as described here from Q3 onwards. This concludes my explanation of the FY '25 results and FY '26 outlook.

Kato-san, thank you very much. Our next step from my side, I would like to explain about our progress in our management plan, Inspire 2027. First, if you could please turn to Page 2. Here is an executive summary. Fiscal year 2025, the first year of Inspire 2027 saw an increasingly uncertain business environment due to factors such as the imposition of U.S. tariffs and the outbreak of conflicts around the world. Amid these challenges, we believe Hitachi was able to achieve both revenue and profitability growth through the expansion of our Lumada business. In particular, the rapidly expanding AI market, including the full-scale launch of HMAX accelerated Hitachi's growth. At the same time, even amid strong business performance, we continue to prioritize enhancing corporate value through disciplined management in accordance with our capital allocation policy. Furthermore, we are further deepening our sustainable management practices and continuing to build the foundation for sustainable growth. As a result, our performance for fiscal year 2025 is as shown below, making a solid start toward achieving the sustainable growth envisioned in Inspire 2027. I will now explain the details of our progress. If you could please turn to Page 4. As explained last April, under Inspire 2027, we aim to achieve sustainable growth by leveraging a True One Hitachi approach to deliver value unique to Hitachi, thereby contributing to the realization of a harmonized society where the environment well-being and economic growth are in harmony or in balance. Accordingly, in addition to the Inspire 2027 financial KPIs shown at the bottom of the slide, as indicated in the upper right corner, we have set Lumada 80/20. That is an 80% Lumada revenue ratio and a 20% adjusted EBITDA margin as our target levels for long-term management goals. Please turn to the next page. Lumada is the engine driving Hitachi's sustainable growth. Today, I would like to provide a detailed explanation of Lumada and HMAX in the next few minutes. Launched in 2016, Lumada has evolved into Lumada 3.0 through the utilization of AI and domain knowledge. So what exactly is Lumada 3.0? Lumada 3.0 illustrates the business areas where Hitachi is focusing its efforts on and the fundamental business models for those areas. Hitachi is focusing on 4 business areas: energy, mobility, industry and digital. The installed base of products and IT systems that we deploy globally within these businesses constitutes our digitalized assets. We collect operational data in real time from these digitalized assets, analyze it using AI enhanced by domain knowledge to provide our unique digital services that solve business and societal challenges. Furthermore, these valuable digital services lead to expanded sales of our products and data collection and analysis that even includes products from other companies, accelerating further expansion of digitalized assets. This is the fundamental business model that Lumada 3.0 aims to achieve. A prime example of Lumada 3.0's digital service is HMAX. HMAX is a suite of next-generation solutions that uses AI to revolutionize social infrastructure, and it's characterized as a recurring service. Through Lumada 3.0, we aim to become a global leader that continues to digitally transform social infrastructure. Based on our results for fiscal year 2025, I will now explain Hitachi Group's progress towards sustainable growth, if you could turn to Page 7. Fiscal year 2025 was the first year of Inspire 2027, and the entire company worked together to demonstrate Hitachi's strong growth momentum. As a result, as shown on the left-hand side of the slide, we achieved a significant growth across all financial KPIs compared to fiscal year 2024. In particular, the adjusted EBITDA margin increased by 1.3 percentage points to reach 12.4%, demonstrating our enhanced earning power, while ROIC rose by 1.5 percentage points, giving us a tangible sense of progress in improving capital efficiency. Furthermore, Lumada business continues to show strong growth with revenue up 11 percentage points year-on-year and adjusted EBITDA margin up 1 point year-on-year. Meanwhile, to embody disciplined management, we implemented our largest ever shareholder return of JPY 600 billion by combining stable dividend growth with flexible share buybacks in accordance with our capital allocation policy. Furthermore, we put continuous business portfolio reforms into action, proceeding with the sale of minority interest shares and the restructuring of our home appliance and ATM businesses. Furthermore, as measures to drive sustainable growth, we made growth investments after carefully assessing the strategic fit and returns to expand the Energy Service business and strengthen DSS' AI development capabilities. Although not shown here, in terms of organic growth investment, for HMAX investment and energy business, we have made an investment of roughly JPY 500 billion. Please turn to the next page. Here is the current status of Lumada business. As shown in the graph on the left, Lumada's revenue ratio reached 40%, and its adjusted EBITDA margin ratio reached 16% in fiscal year 2025. We are making steady progress toward achieving the Inspire 2027 targets of a 50% revenue ratio for Lumada and 18% adjusted EBITDA margin ratio. Driving this growth is HMAX, the recurring digital service at the core of Lumada 3.0. By the end of fiscal year 2025, HMAX will have reached JPY 300 billion in revenue with an adjusted EBITDA margin exceeding 20%. As shown in the slides, we are steadily building a track record of successful implementation across all sectors, and we aim for further growth in the future. Next, I would like to talk about initiatives and our expected growth going forward. First, energy grid aging response and investment in new equipment from that, the demand continues to be very strong, backlog reaching JPY 10 trillion. And as a result, a notable highlight for fiscal year 2025 is that thanks to initiatives to improve productivity, profit margin rose by 3.3 percentage points year-on-year, reaching 12.9%. Additionally, we executed inorganic investments in North America to further expand our Service business. Based on strong performance in FY '25, we have revised upward both the revenue growth rate and adjusted EBITDA margin for the energy sector's Inspire 2027 targets. Next, the mobility sector. Demand remains robust in mobility sector as well, in particular, Rail Signaling business, which was strengthened through the acquisition of Thales saw growth. As a result, the backlog increased by more than 15% year-on-year, exceeding JPY 7 trillion. We also continued growth investments to strengthen and expand HMAX, proceeding with the acquisitions of Omnicom and Clever Devices. Going forward, we will continue to work steadily towards achieving Inspire 2027 by responding to robust demand and expanding HMAX. Please turn to Page 10. This is about Connective Industries sector. In fiscal year 2025, driven by growing demand for AI, our Semiconductor Measurement and Inspection Equipment business, a key strength, performed well. Furthermore, Lumada business grew following the launch of HMAX industry. As a result, despite a slowdown in elevator and escalator business in the Chinese market, the backlog increased by more than 13% year-on-year, reaching JPY 2.5 trillion. Furthermore, under the new leadership of Executive Officer, Mr. Amiya, we are accelerating the reform of our business portfolio, including the execution of a new growth strategy for the Home Appliance business through our strategic partnership with Nojima. Going forward, we will further accelerate efforts to solidify the foundation for sustainable growth and move toward achieving Inspire 2027. Next is the Digital Systems and Services sector. In fiscal year 2025, in addition to growth in mission-critical large-scale system development, including modernization and migration, we proceeded with a review of pricing for IT services and operations. We also actively worked to streamline system development by leveraging AI. As a result, the DSS sector profit margin reached a record high of 15.5%. As a result, the DSS sector's profit margin reached -- furthermore, through our strategic partnership with Oki Electric, we restructured our ATM business and established a foundation for providing stable services to our domestic financial institution clients. Through the expansion of our backlog and increase in the proportion of Lumada revenue and margin improvements, driven by pricing revisions and the use of AI, we're steadily building the foundation for sustainable growth and vision by Inspire 2027. We plan to provide further details regarding the business overview of these 4 sectors and our future growth strategies at the Investor Day scheduled for June. Next, please turn to Page 11 on global business status. Inspire 2027, we are further promoting global autonomous decentralized management. Our 6 regions are autonomously exploring business opportunities and achieving growth. Overseas revenue exceeded the growth rate of company-wide revenue, increasing by more than 11% year-on-year. As shown on the right side of the slide, we are making progress in securing large-scale projects in each region that serve as examples of Hitachi's innovation of social infrastructure. The HVDC project in the U.K. is expected to have a total customer investment of over JPY 600 billion, and the railway project in Germany is expected to be a project with total order value of approximately JPY 300 billion. We are also exploring new business opportunities and are making proposals to secure projects such as the introduction of power transmission and distribution equipment for AI data centers in North America and EV battery life cycle solutions in Europe. Please turn to Page 12. Core free cash flow grew significantly by 50% year-on-year due to robust business performance and a firmly established cash flow focused management approach. We are also proceeding with the sale of minority stakes. Meanwhile, we steadily advanced disciplined management based on our capital allocation policy. In FY '25, while cash flow expanded, there were few growth investment opportunities commensurate with strategic suitability and return. And, therefore, from January to April 2026, we flexibly implemented an additional JPY 100 billion in share buybacks midyear. Please turn to Page 13. This shows the EPS performance for FY '25. As shown on the left side of the graph, supported by steady profit growth and the creation of stable bottom line, EPS also grew by 32% year-on-year, as shown on the right side. We aim for continued sustainable growth in EPS in the future. Next is on enhancing sustainable management that supports sustainable growth. Please turn to Page 15. Amidst rapidly changing business environment, we are working to enhance risk management through the deepening of global autonomous decentralized management. Regarding the U.S. reciprocal tariff that began at the start of FY '25, we strengthened enterprise risk management to quickly assess the impact on our business and minimize the impact by taking measures such as price pass-through measures. In addition, we are continuing to expand the local procurement rate by continuously reviewing our supply chain. Furthermore, regarding the Middle East crisis, we are currently working to visualize and minimize the impact on our business. And at this point, we have incorporated an impact of JPY 20 billion on profits into this year's forecast. And as shown on the right side, in order to minimize geopolitical risks through local production for local consumption, we have made large investments in both the energy and mobility sectors in North America, which is a growth market. Please turn to Slide 16. We believe that strengthening human capital is the foundation for sustainable growth, and we are continuously working on talent development and engagement improvement. We are steadily expanding our talent pool of next-generation leaders and AI professionals to achieve the numerical targets of Inspire 2027. Furthermore, in order to create value as True One Hitachi, we are focusing on the continuous improvement of employee engagement scores. In FY '25, we reached 73.3 points, bringing us within reach of the Inspire 2027 target. As shown on the right, these initiatives have received a certain level of recognition from outside the company. On Slide 17, you can see in FY '25, we continued to implement management reforms to enhance corporate value. We are continuing to strengthen the independence and diversity of the Board of Directors, which is the core of our governance. We nominated Ms. Ilham Kadri, who has a proven track record as CEO of a global chemical manufacturer as new Director from June. We also nominated Mr. Masahiko Chino, who has been active as Co-Chairman of a global accounting firm. Hitachi will continue to improve the independence and diversity of its Board of Directors and strengthen governance, taking into account the changes in the business operations. Meanwhile, we are also advancing reforms to our compensation system from the perspective of further strengthening our commitment to the capital markets. For executive officers, we adopted a compensation system linked to the enhancement of corporate value and the achievement of management plans. Furthermore, from FY '26, we will also introduce equity compensation for 1,800 global top managers aiming to improve compensation levels in addition to promoting a more capital market conscious approach to work performance. Now, let us look at new growth opportunities for Hitachi's sustainable growth. Please turn to Slide 19. Needless to say, AI is currently creating a new massive growth market. Both Agentic AI, which makes autonomous decisions and executes actions and physical AI, which interacts with the physical world are continuing to evolve. And the market size is expected to exceed JPY 100 trillion by 2030. We believe this market presents an unprecedented opportunity for Hitachi. This is because Hitachi is a company with highly reliable products cultivated over 110 years of building social infrastructure, control and operation technologies based on field expertise spread across 190 countries and cutting-edge AI technology backed by 80 years of IT business and partnerships. With these 3 elements, Hitachi is a rare player that can continue to innovate social infrastructure that supports human society with AI. And we are confident that we can achieve sustainable growth through social infrastructure and AI, backed by the enormous market size. Please turn to Slide 20. The rapid expansion of HMAX demonstrates Hitachi's ability to grow through social infrastructure and AI. HMAX Energy provides value in the form of power grid stabilization to multiple utility customers. HMAX Mobility continues to evolve, utilizing data from other manufacturers' vehicles to bring value to railway company customers in the form of improved operational efficiency. HMAX Industry has demonstrated that productivity can be continuously improved, not only by replicating skilled techniques, but also by autonomous evolution. Hitachi will further accelerate its growth in social infrastructure and AI with HMAX at its core. Next slide, please. We are also developing new businesses and technologies that will drive our next growth, and working with NVIDIA to develop technologies for establishing a DC power supply architecture to realize efficient power utilization in data centers. We are also developing the world's first technology to collect data on social infrastructure in real time from space and transform operation and maintenance. Furthermore, quantum computing is a key technology for accelerating innovation in social infrastructure. Hitachi is working on the development of silicon quantum computing technology with the aim of scaling up qubits. We are beginning to see results that will lead to scaling up such as the world's first demonstration of 2-qubit operation in 2 dimensions. Please turn to Page 22. This is a summary. As I explained today, we believe that in FY 2025, we were able to demonstrate that Hitachi can grow strongly even in an uncertain business environment. We will continue to pursue disciplined management and work towards achieving Inspire 2027 as a True One Hitachi. Let me introduce Hitachi Investor Day 2026. Please turn to Page 24. Hitachi Investor Day 2026 will be held on June 10 at 3:00 p.m. Four sector CEOs will explain the growth strategies of their respective businesses, and CFO will explain Hitachi's financial strategy. We also hope to have a frank exchange of views with everyone in the capital markets. I ask you for your participation. That concludes my explanation.

[Operator Instructions] Takizawa-san.

Takizawa from Fidelity Investment. I have 3 questions. Question number one, Inspire 2027, under that, the plan for the new fiscal year, how is that positioned? I would like to ask. Looking at the numbers, apparently, top line number and 0.4 percentage point EBITDA improvement. Looking at the numbers alone, compared to what is to be achieved, it seems rather modest. But Middle East situation as well as JPY 30 billion acceleration. So the year is going to be a year for preparation to achieve the targets under Inspire 2027, if you could please explain the position of this fiscal year?

Takizawa-san, thank you very much. I would like to answer. And if necessary, Kato-san will supplement. So Inspire 2027, this is the plan. What is the position? As Kato-san earlier said, the impact from Middle East and impact of strategic investment, if we exclude them, we are having a plan that even exceeds the record highs we saw in FY 2025. If we look at the growth rates, on surface, in terms of factoring in the impact, you may not think that the growth rates are as robust as you pointed out earlier. However, strategic investment for growth has been our focus, as Takizawa-san pointed out. In order to achieve targets for 2027, we would like to make sure that targets are definitely met. And, therefore, the numbers are planned as such. So we would like to achieve all the targets steadily in FY '26 so that we can achieve what we must achieve for '27.

My second question, IT service in North America is strong. Hitachi Digital Service on a dollar basis is growing more than 10%, you said. So it seems that your business is stronger than the average trend in the North America. What are the drivers behind this?

So Kato will answer your question.

So Hitachi Digital Services for long, in terms of the ERP, it has provided a broad range of solutions to its customers. What was particularly strong in Q4 is that the manufacturers who have global operations, including some Japanese manufacturers, they have made a lot of inquiries and have placed orders, and profitability is gradually improving as well. So Q4 momentum is expected to continue for some time to come.

If I may add to that, Kato-san just explained the background to the strong performance. I understand that there's another positive factor. Hitachi Digital Services business model is such that what DSS is doing here in Japan, mainly it does outcome-based contract. So it's not time and material. It's outcome-based contract that it has with customers. Through that, it has been able to grow its business considerably. In North America as well, with outcome-based contracts, there is still ample room for growth. So transforming the business model. I think that's one of the reasons for that. And this is something that we would like to continue to work on going forward.

My last question. This may somewhat overlap well with my earlier question, but the margin improvement in Energy, the last term, 3.3 points. This time, you're expecting 0.6 points. So improved profitability in backlog and expanded sales in Energy. Given those factors, you seem to be conservative. So, because of the timing or any other factors that are affecting this, if you could please explain?

Yes, Kato will respond.

The numbers for FY 2025, we have taken a number of initiatives. And I think those initiatives did bear out quite well. And sales revenue has grown considerably. It's not just because of capacity increase, but productivity enhancement. So resource allocation, efficiency and positive impact from introduction of systems as well as pricing efforts. Because of those factors, we were able to drive revenue. And at the same time, we enhanced the productivity and thus improvement in profitability. Going forward, we will continue to look to improve FY 2025, however, saw a very large improvement. So what's for '26 may small appear. But if you look at the absolute number, you will see that it's still a remarkable improvement. And for productivity enhancement, we will continue to invest in IP and others. And because of that, the numbers for fiscal year 2026.

[indiscernible]

I have 3 questions. First is on Energy, Power Grid. So backlog on a dollar basis is up by 33%, and it's strong. On the other hand, your competitors' GV is up by 70%. So comparing with them, it seems relatively lower. Size is different, but relatively speaking, are you growing in relative to the industry growth? That is my first question. Could I ask my second question or -- second question is GlobalLogic. Including synergy, it's 44% up, you said. So what did the organic growth look like? And if there's a big gap, where did you grow in terms of synergy? In organic area, disruption is being mentioned. So are you seeing that impact? I'm a bit concerned about that. My third question is on the financial area. You will work on ROE improvement and D/E ratio. There's still a gap from your targeted number. You are doing record high share buyback. But from your financial position, that alone will not improve the ROE. So in the remaining years of the medium-term plan, including organic investment, what's your plan on cash allocation?

Thank you for the question. First and third question will be Kato-san and GlobalLogic. Your second question will be answered by myself. So to your first question, order, varies from project-to-project, especially as we mentioned earlier, there are large projects too. So depending on the timing, this may cause a change. What I would like you to look at is FY '25 growth rate. Hitachi Energy on a dollar basis was up by 26%. In terms of the dollar value, it was $4.1 billion. The growth is comparable to our peers, but we are the top position. We have the largest scale. So the increase of $4 billion, this increment is bigger because we have larger scale than our competitors. So we are comparable, not inferior by any means to our peers. We are also doing investment, capital expenditure and other types of investments to keep this top position. So we are committed to growing continuously. Next, second question.

GlobalLogic stand-alone growth. FY '25 Page 36 of the financial results material shows the synergy and stand-alone revenue trend. Synergy is growing largely. On the other hand, stand-alone -- GlobalLogic stand-alone is growth -- 3% growth in Q4. This -- let me also touch on the market-wide environment to answer your question. The market situation differs quite significantly between Japan and overseas. Starting with Japan, the demand is extremely strong, and we are shorthanded. And we have labor shortage. So with the AI improvement, its efficiency improvement, we realized this growth. And this strong robust environment will continue going forward. On the other hand, GlobalLogic is focusing on the overseas global market. As you see in stand-alone, the time and material pressure -- price pressure is becoming stronger. And therefore, the stand-alone is a bit weak. On the other hand, OT sector, Energy, Mobility and Industry, Digitalization and AI Transformation, GlobalLogic's capability is extremely important. This time, HMAX is launched very strongly, thanks to GlobalLogic's capability. And therefore, the synergy grew, thanks to that. So in June Investor Day, we will talk about the DSS status and the growth strategy and growth outlook in more detail. Thank you. To your third question, at the end of FY '25, as you rightly said, D/E ratio is slightly down. We did bolt-on type M&A, multiple deals, but hundreds of billions or JPY 1 trillion, those size bolt-on was not done in FY '25. One year ago, when we started Inspire 2027, we mentioned this. In this management period, we want a JPY 1 trillion-plus M&A if there was an opportunity, and that is what we are trying to do. So based on that, the capital efficiency and capital allocation measures are being taken. And of course, as I said earlier, we will be deliberate, look at risk and return cautiously and in Lumada and HMAX, the digital services, we want something that will lead to Lumada and HMAX. So we will be committed to doing that in a disciplined manner. Based on this growth investment, in the medium to long term, we want the ratio to be 0.5, around 0.5. And that is the basis of our policy that we are conducting right now.

Energy margin, a follow-up question. Adjusted EBITDA margin target is over 14%. You changed your target. It was originally 13% to 15%. So you are aiming for higher than midpoint. What kind of message is this? If you could give us a color?

In Power Grid, there is order backlog. So in the medium term, the margin can be expected to a certain extent. But as I mentioned earlier, FY '25, we worked on the productivity improvement. And productivity improved more than we anticipated. So compared to 1 year ago, we were raising one notch. And so we can now aim for higher profit margin now.

Fukuhara-san, please unmute.

Jefferies Securities, Sho Fukuhara speaking. I would like to ask 2 questions at this moment. Question number one, DSS storage business, I have a question. Specifically, it's about Hitachi Vantara. Up until Q3, I think sales went down, but profitability up until Q3. But did Q4 continue to see improved profitability? Page 24, project discipline management and cost reduction, you're talking about that. But more specifically, what is it that you're going to do? And in line with that, the update for the competitive landscape, if you could also provide that as well, that is appreciated. That's my first question.

Fukuhara-san, thank you very much for your question. So regarding the storage business, as Kato-san explained earlier, Hitachi has strength in market for block storage. That is what Hitachi is focusing on. For the first time in a while, we launched a new product. There were customers who were waiting for the new product, and they are making very robust inquiries. And as a result, we have been able to improve profitability. So going forward, we will continue to focus on block storage products and the actual operation of the business. We will continue with the cost reduction in our business operation at the same time. So we would like to improve profitability over the short term. On the other hand, over the medium to long term, as we have been saying since before, through strategic partnerships, we would like to provide a growth narrative and implement that. So first and foremost, we're making haste in transforming this business into one that is profitable.

My second question about the progress of the medium-term management plan. Page 9 of Tokunaga-san's presentation in the Energy sector, FY '27 target was revised upward. However, company-wide targets remain the same. That means that outside of Energy, you are expecting some downside risks. Do you think that we should be aware of that?

Thank you for your question. Inspire 2027 targets overall, whether to revise them overall upward or not, we had internal discussions on that. But at this moment, we are not able to predict how the Middle East risks will unravel. Given such uncertainties, it's very difficult to make upward revisions to the overall targets. If the business continues to perform strongly, at the timing of earnings announcement, we will make an update or revision as we have been. At this moment, it's not that we're seeing major downside risks. I hope that is understood.

I see. That is understood. Just to clarify, so Middle East risk up until Q1, JPY 20 billion, you have said, it's uncertain. But on an annual basis, JPY 20 billion times 4, is there a rough number that you can give on an annual basis?

To answer your question about the Middle East risks, what we factored in, in Q1 is what is directly impacting our business. We call it direct impact, and that's JPY 20 billion. However, this is based on a very rough estimation. So this could fluctuate going forward. And Q2 and onward, we have not factored in risks and indirect impact, especially on our customers. The timing of order placement may be delayed and there could be indirect impact from customers on our business. It's not possible to predict. So we would like to refrain from giving you an annualized number at this moment.

Next, Yasui-san.

Yasui from UBS. I have 3 questions. First is on the domestic IT service. SaaS -- Death of SaaS is a big theme and is being a hot topic in the stock market. There are positives and negatives. Various factors come into play here. It was strong until now. So the in-sourcing, the in-house, shift to in-housing on the customer side or the shift-to-cloud, I'm sure there are various changes taking place. At this point in time, Tokunaga-san and Kato-san, in this domestic IT service under the theme of Death of SaaS, the concerns on the negative side, what are the negative elements that you're concerned about?

Thank you for your question. So Death of SaaS is being discussed for a while now. The market that we are facing in Japan is still strong. It remains robust until now. And there are a few factors behind this. There is this Japan market-specific element, which is customers and SIers, roles and division of roles and Hitachi's large-scale system development capability that we have cultivated over the years. These 2 factors are playing positively, and that is realizing the strong favorable condition. Now what are the risks that we need to take into account? AI agent is evolving rapidly. So the people-based work will gradually be replaced by AI agent. It may be replaced by AI agents. We cannot rule out that possibility. That said, the replacement by AI, the scope will be coding and testing where it is labor intensive, but entry and mid-level engineers are engaged in. In addition, people can work with AI agents, which means the additional work will be generated. For example, AI, when it modifies the system, it has to avoid the impact on the overall system and have AI play their role. And for example, the customers, not in the form of AI, but as a service, maybe the business model will change to the customers. So this new business, new task leads us to think that our business will not disappear, but the content may change. So DSS is now rapidly working on this transformation. So to repeat my message, in the Investor Day, we will elaborate on our thinking.

Second question is the same theme. In the U.S., there are large changes occurring. Your U.S. software person in charge is saying that the companies are now taking the business in-house. So agile development software, software that was done by people may be replaced by agents. So in the U.S. Hitachi, what do you -- what changes do you think are occurring?

Thank you for the question. As I said earlier, in the U.S., the AI introduction is causing a large change. And as a result, GlobalLogic's time and material model is not being accepted as much and is now under price pressure. This trend is becoming clearer. Now as I mentioned in Hitachi Digital Services, there is outcome-based business, not time and material, but outcome-based. We are offering value to our customers through outcome-based. So we will hone this approach going forward. On the other hand, for the time and material, it's difficult for GlobalLogic to push this forward. So in that case, we will use certain amount of resource to OT sector's AI transformation thoroughly. We're thinking of that resource allocation. And as a result, HMAX is now launching very quickly. And so this is a positive result. Regarding this North America change, we will watch carefully. And for the business transformation and GlobalLogic's change in its role, we will take appropriate steps accordingly.

My third question is about data center. The power shortage is very serious. We want the demand to become stronger. So in the past 1 year, so you formed partnership with OpenAI last October. And I think the demand is rising in the past 6 months. So in the next 3 to next 5 years, what kind of growth are you expecting?

Data center demand is extremely strong. And after we partnered with OpenAI, of course, the case and other business opportunities are also increasing. On the other hand, data center demand from Hitachi Energy as a whole is still small, accounts for a small portion of our revenue. So demand is growing, but Hitachi Energy can drive -- can serve as an engine of Hitachi Energy going forward. So we will increase our production capability, production capacity and meet the strong demand going forward.

And then next, Ryosuke-san.

Ryosuke-san from Nikkei Newspaper. I have 2 questions. The first question regards HMAX. For FY '25, you gave explanation for the earnings. So 80-20, what is the midterm, long-term outlook in terms of revenue and profitability? And secondly, about physical AI. In this area, Siemens and other existing rivals are leveraging data from the ground to offer solutions. So such existing rivals or other tech companies, compared to them, what would be your strength?

To answer first regarding HMAX. Lumada 3.0, FY '27 target is set. Lumada 50, 18. In order to achieve that, we will continue to grow HMAX. So that is the plan. We do not have a specific target for HMAX alone on a stand-alone basis. But if you look at the targets for FY 2026, the growth expected is very high. So we would like to continuously maintain this high target. And with respect to physical AI, inclusive of our peers in the industry with respect to physical AI, there's a lot of focus made in physical AI, as I understand it. But other companies' physical AI as opposed to Hitachi's physical AI, I think there are 2 major differences between us and our peers. First, difference is such that other companies' physical AI is centering around robotics. So they are built mainly on robotics. They're mainly talking about physical AI in factories and plants. On the other hand, Hitachi's physical AI is such that Hitachi's social infrastructure business overall, Energy, Mobility, Industry for all these 3 factors, we're having impact on the physical aspect of all these 3 sectors in terms of physical AI. As we build that customer zero, meaning we have a large market within Hitachi. And based on the track record that we built within our group, we are able to build and offer solutions to our customers. That is the difference, and that difference needs to be translated into strength so that we can continue to grow physical AI and HMAX.

Next, Nakane-san.

Nakane-san from Nikkei BP. I have 2 main questions. Question number one, about strategic SIB business investment, I have a question. What you announced last year on the order of JPY 500 billion investment, what is the progress? What is the current status? What is the breakdown of the investment as well as the thinking going forward? That's my first question.

Nakane-san, thank you very much for your question. First, to answer your question regarding strategic SIB, strategic investment is being made steadily at this moment. That's where we are. In terms of progress, of the 3 years, 1 year has already passed. So I think we have been able to make a progress a little under 1/3 of the target. In terms of the outcome, so new architectures for data centers or our initiative with MSK or Material as a Service with Mitsubishi, we are seeing results in those areas. So with respect to the progress for strategic SIB, early into this fiscal year, specifically, individually, we would like to have an opportunity to explain specific business to you. We're seeing that with Taniguchi-san. So once we decide on the schedule, we would like to let you know.

So details will be provided on a separate occasion. But to the extent that you can answer, I would like to ask about the overall outlook. I think you cited 4 strategic areas for investment. Is there a particular area that you would like to focus your allocation on 4 business areas.

To answer your question, the time lines for the 4 areas would be different. For example, among the 4 for data centers over the short term. So the so-called Horizon 1 commercialization is possible in that area. When it comes to batteries and health care, these are areas where midterm, 3 to 5 years commercialization is envisioned. I think we can call it Horizon 2. And Smart City, we need to take a little more time there to commercialize. So we refer to it as Horizon 3. So over the long term, we will continue to create pillars of our businesses. So that is the important position of strategic SIB. We started off with 4 areas, but market changes and strengthening of capabilities within Hitachi. With those in mind, other than these 4 areas, we would like to increase the number of candidate areas. So once we're able to provide you with an update, we would like to do so at that point in time.

There's one other main question, which is about investments into data center-related business. Globally, huge investments are being made for the data centers. And through your announcement of your energy business, I think you're being active on that front. But I suppose supply-demand tips and collapses, the market could go down. There's that risk. So how do you see such potential risks? Are you hedging against such risks? So what is the policy based on which you're making your investments and investment decisions?

Thank you for your question. To answer, at a company for business for data centers, well, one example is Hitachi Energy's Power Grid business. As our CEO, Tokunaga-san explained earlier, of late, orders are increasing, especially for FY '25. We have received quite a number of orders for that. But overall, the demand for transmission business is increasing. And given that the proportion of data center-related business is less than 10% at this moment. So although the ratio is expected to rise in the future, even if this changes, Power Grid business will not be affected too much. The impact will be limited. But with increased business, depending on the level of volatility, the amount will rise, but we would like to closely examine the trends and respond properly.

We have many hands still, but we will switch to English channel for now. [Operator Instructions] We don't see the question from the English channel, so we'll come back to Japan -- Japanese channel. Fujiwara-san, please unmute yourself and ask your question.

Fujiwara from Citigroup Securities. I have 2 questions. First, Inspire 2027, Page 10, CI and DSS. Top line growth will be a bit limited in FY '25. Now you are selective in the growth investment, and it was only JPY 0.2 trillion. It was not large. But growth investment is small. In CI and DSS, what kind of impact can this growth investment have on the top line growth? Can you achieve this target simply from the organic growth? Or are there any downside risks? So that's my first question.

Thank you for your question. FY '25, growth investment was JPY 0.2 trillion only. We think this is a challenge that we need to address. On the other hand, as Kato-san said earlier, in FY '26, our growth investment amount is set, and we will select the deals, be aggressive in getting deals that will contribute to ROE improvement. To execute this plan, you may think many M&As are included -- incorporated in this plan. But this number does not include large M&A prospects. But not only in the next 3 years, if we -- to continue sustainability, we need the investment and divestment. We need to rebalance and reshuffle our business portfolio. So going from FY '26 and onward, we will be selective. We will watch the return closely, but also be active and aggressive in the investment opportunities.

My second question is on the Middle East impact. In Q1, adjusted EBITDA base JPY 20 billion is factored in. So this is entirely direct impact. And you said it's hard to foresee. What about the indirect impact from March onward, are you starting to see some indirect impact? And what are some possible impacts as much as you know at this point?

So Q1, you are right. This JPY 20 billion is just direct impact. And next, the indirect impact. As far as we know, indirect impact has not occurred at this point. What we anticipate is the procurement may run short or cost impact, not those direct impact, but the impact that will be on our customers and this leads to delay in their orders to us. Those are what we think as indirect impact. We have 2 more months in Q1, and that may occur. So we have to watch closely.

One follow-up question. You procure a large amount of material and the prices are likely to rise. In the past few years, inflation has progressed. And so I think your contract includes the pricing pass-through clause. How are you managing your risks at this point?

You're right. In the past few years, we've seen inflation. So large contracts or long time frame, long-time contracts, we have contracts that include the pricing pass-through clause, but short-term contracts or smaller scale contracts do not necessarily have such clauses. And what we are concerned is the energy costs or the logistics costs or the crude oil-related raw materials. They are rising now. So we will explain, consult with our customers on pricing pass-through going forward.

We have many hands still raised. Because of the time constraint, however, we would like to limit the questions to 2 more people. Takuya Maeda-san.

Maeda-san from Nikkei BP. AI-driven development, what is the impact on human work? I would like to ask a question. With AI-driven development, you were able to drive efficiencies quite a bit, you said. They could have a direct impact on the tasks done by human. So compared -- and manpower. So compared to Lumada, what is the difference in the impact on manpower?

So development, applying AI. In domestic projects, we are incorporating it quite substantially. Kato-san earlier said in his earnings presentation for FY 2025, depending on the projects, we were able to drive development efficiency by more than 10% through use of AI. Most of the domestic projects are contracts, not necessarily based on manpower or by month. But over a certain period of time, we set outcome and deliver outcome based on that. So if efficiency can be enhanced for month, that's a positive for Hitachi's profitability. And as I said earlier, human resources are very constrained at this moment. So with utilization of AI, human resource constraint can be covered or alleviated as a result. So for the domestic market, development, leveraging AI is having a positive impact on our business. On the other hand, GlobalLogic business overseas, as we have been explaining before, time and material approach accounts for the majority of their business. So price pressure and some customers in-sourcing, such impacts are starting to be felt. Therefore, GlobalLogic's resource allocation should be changed. So AI transformation in the OT business more for that and transform business model away from time and material. That's what they're making efforts on. That would be all.

Maeda-san, did that answer your question? Okay. Let us move on to the last set of questions. Hirakawa-san.

BofA Securities, Hirakawa. I have 3 questions. First question is related to the earlier one. Overseas time and material business model is becoming difficult. But in Japan, business model is different from overseas. I know that. But because of difference in time line, in 3 to 5 years' time, maybe we will see the same in Japan. What do you think about that risk or that concern? If you could enlighten us. That's my first question.

Thank you for the question. You're right. In 3 to 5 years' time, Hitachi's SI business that we do now will remain unchanged? No, it will likely to change in its form. On the other hand, in the Japanese market, the portion Hitachi is in charge of, which is system-wide architecture design and the project management. This business will be done in collaboration with AI, we think, but it will not go away. In addition, with AI coming in, by working with AI, we will have additional work. In other words, we need to define the area where AI conduct this business and think of a process where AI need to -- will do the job. So as you rightly said, Hirakawa-san, the format form will change, but the task required of SIer will remain. It will not go away. So we are trying to transform ourselves quickly to this new format.

My second question is on your growth investment. You will be disciplined. You had some impressive ones last year. To realize Lumada 3.0, what are the missing pieces in thinking of growth investment? I think it has to do with your strategy, but as much as you can tell us, what will ensure or improve the possibility of achieving Lumada 3.0? Any areas you could share with us?

If we -- if we are too specific, it may hinder our M&A activities, but -- and more detail will be explained in the Investor Day. Our plan for now are mainly twofold. Lumada 3.0 basic model is Energy, Mobility, will function with Energy and Mobility. This is already clear from our past track record. So CI sector, we want to be global #1 or #1 in regional -- certain regions. We want to enhance the product that is #1 in particular region. And that will serve to transform CI and push the Lumada 3.0 forward. In addition, in pursuing Lumada 3.0, what Hitachi is different from our peers is that we have same business model in multiple business segments. And by doing so, we combine data and offer new value to our customers. For example, in Mobility sector, we have HMAX Mobility. We are using Energy sector data to come up with the optimal energy consumption to run the train vehicles, and we are proposing this to our customers now. So this data collaboration across sectors is a very important point we need to enhance going forward. Including such point, to repeat myself, we will talk more on the Investor Day.

And my last question is -- HMAX is my question. I want to understand this deeper. So 2 questions here. One is, so revenue will grow from JPY 300 billion to JPY 480 billion and the EBITDA margin is rising to 22%. It is rising strongly. So I'm sure there are different sizes, but in recurring business size, what is the roundabout amount per deal per project? And Tokunaga-san, you said Rail and Energy, you are starting to establish the business model, and that's our understanding, too. This JPY 480 billion, when we break this down, Energy, Mobility, Connective Industries, what does the breakdown look like? So if you could touch on that, please.

Thank you for your question. HMAX project size, -- this is -- has to do with what value we offer to our customers and what pain points customers have. Depending on that, the project size differs. So it is difficult to generalize the size of the project. So I'm sorry, I cannot be more specific. But one point is management challenges or social challenges. Our service can help resolve the societal challenges. So unless the EBITDA margin is 20%, we cannot call it HMAX. So we are aligned on that point. So this profit margin will be maintained. That is the underlying assumption. And the HMAX breakdown by sector. We would like to refrain from disclosing the numbers. But for now, it's Mobility and CI sector. Revenue is growing in Mobility and CI.

And with that we would like to conclude the earnings briefing session. Thank you very much for joining us for a number of hours. [Statements in English on this transcript were spoken by an interpreter present on the live call.]