KDDI Corporation (9433) Earnings Call Transcript & Summary

We would like to start a meeting on KDDI financial results of the fiscal year end March 2025, followed by the questions-and-answer session. Thank you for joining us out of your busy schedules. I'm your emcee today, Miyakawa from IR department. This meeting is broadcast live on the Internet with Japanese and English simultaneous translation. Please be advised that the meeting will be later made available on our IR website for on-demand distribution. Let me introduce today's attendees Matsuda, President and CEO, Representative Director. Kuwahara, Executive Vice President, Executive Director, Business Solutions Sector. Saishoji, Managing Executive Officer, CFO, Executive Director, Corporate Sector. Takezawa, Managing Executive Officer, Executive Director, Personal Business Sector. Katsuki, Managing Executive Officer, CSO and CDO, General Manager, Corporate Strategy Division. Aketa, Executive Officer, Executive Director, Corporate Management. Seven items uploaded on our IR website, 3 related business results, 4 related to the TSE disclosure. Please read the disclaimer in each document about what's listed in the material performance, including what will be shared during the Q&A and subscription targets. First, President Matsuda will present a summary of the business results followed by the Q&A session. Mr. Matsuda, please.

Thank you for joining our business results meeting out of your very busy schedules. We appreciate your attention. Before Q&A session, let me share with you main points for the fiscal results. Since Mr. Takashi, former President has given me the baton, this is the first time that I present the full year results. First, allow me to communicate KDDI's aspiration and our commitment to growth. I'd like to be brief. Under the current midterm management strategy and also the connection to KDDI Vision 2030, we would like to evolve the current strategy, and we want to realize KDDI Vision 2030. The key here is 5G, data-driven AI integration with this accelerate transformation. And towards this next growth, we would like to make the following 2 commitments. First, enhancing the power to connect shown on the bottom. We will establish underlying communication network as KDDI has strong competitive foundation. And on top of that, on communication, the digital data and AI, we would like to create new values. Regarding new values, we will enhance the portfolio by applying them to each business domain. We want to strengthen portfolio, applying these to each orbit. And we would like to upgrade the power to connect to a new stage. First, enhancing the power to connect. I'm pretty sure you're familiar with this. We have been really particular about the quality of communications. We were ranked the world's #1 connected experience by Opensignal. The 5G, the base stations of over 100,000 and 55,000 (sic) [ 50,000 ] substations -- sub6 millimeter-wave base stations, and we have the highest number here. And 5G plus, we already start visualizing this 5G. When the sub6 milli wave is used in a very easy to see manner, the customers can see where they are connected. Regarding the au 5G fast lane, which we announced as a new value in communication, even during congestion with this technology, we provide more comfortable connection. So relatively to more resources are allocated to these customers, the quality of communication. We maintain KDDI's superiority in the communication quality. Here, in addition, the KDDI will accelerate communication capabilities with Starlink Direct. This is connecting the unconnected wherever you see the sky not only to au, but to customers of all carriers. We have dedicated SIM offering this service. And this is the value we can deliver immediately. We would like to make this as one of the differentiating factor. UQ mobile and users from other carriers are applying for this service. More than 8 million units are compatible with this. We can see this coming in June. And from customers, they have expectations. They have trust because we have communication quality. We want to be particular about this quality of communication. This is something we want to do, and we want to refine. This is the pledge we make. And on top of that, multi-brand strategy, we would like to enhance them further. Connecting more and always with au is the foundation common to multi-brands. But these are brands with au, au offers services that are reliable and stress-free, and we would like to pursue them. Communication values are giving here. UQ mobile, we deliver simple and affordable values to everyone. To broaden the entrance with this UQ, we would like customers to acknowledge these values. Povo is dedicated for online. So there will be different kinds of customers with toppings as you like, you can enjoy them. And we would like to build these brands. We redesigning such brands. Then AI comes on top of this. We have data. How best we can integrate AI with data, that's the key. On the bottom, you can see that KDDI, we are seeing the generation of various kinds of data, both online and offline, digital and the physical area. We have touch points. By connecting them with AI, we call this hyper-personalization. So by combining them to C on left-hand side to right-hand side to B customers. With this common platform, we would like to deliver these to life support for each and every customer on the left-hand side, right-hand side, for corporate customers, transformation of the operating model for each company, for each industry. Those are solutions we would like to offer. For individuals, we are envisioning AI market. We launched au Smart Pass in the early phase of smartphones, allowing users to check applications without any cap from select apps. With AI -- touch points for customers with AI, we wanted to deliver such places. So providers will come up with those AI services and our customers, we want to connect them and build. We would like to create win-win relations. And to make AI something familiar, the RCS, messaging service has been already introduced concerning this AI chatbots. In the near future, we would like to release them. You can see that to make AI something familiar, easier to use, we believe that's part of our mission. For corporate customers, KDDI has contacts with about 400,000 corporate customers, and we have accumulated a wealth of knowledge about them. Utilizing this knowledge, we will contribute to transforming our customers' operating models by each client, each customer. Retail, logistics, BPO, you can see those. But in addition to them, WAKONX, under this brand, we would like to launch them. To support them, AI infrastructure. In Osaka Sakai AI Data Center from Sharp, now we signed an acquisition contract for the Sharp Sakai plant land and buildings. The construction started already. We are making preparation for full-fledged operation. On top of our GPU, our model, including ELYZA were built and then offering them to customers. We thought that was one of the pillars. But this time, as we already made announcement, customers who are familiar with Google Gemini or Google Cloud, on top of our GPU, Google Cloud Gemini can be used. That environment will be prepared. So data remains -- data is retained in Japan, so-called sovereign AI provision is now enabled. The satellite growth strategy X-axis shows time line. We will advance the satellite growth strategy this year and also next year -- starting next year for the next midterm management strategy, we would like to create new values that's shown in the schematic view to realize the business growth of each orbit. In particular, the cutting-edge technology and the new business creation, they will be directly supervised by the President, me. I will be extensively involved in advancing them towards the next midterm period. To succeed in these challenges, we aspire to be a company that inspires passionate challenges to encourage each employee to have a sense of challenge from within. So it has to be passionate -- inspire passionate challenges. Next, I will explain the financial results for FY March '25. Consolidated results for FY March '25 showed increased sales and profits. On the left, operating revenue was JPY 5,918 billion, up 2.8% year-on-year. In the middle, operating income was JPY 1,118.7 billion, up 16.3% year-on-year. And on the right, profit for the year was JPY 685.7 billion, up 7.5% year-on-year. The final year of the midterm plan, we are making progress steadily. Next are the factors for change in consolidated operating income. From the left, group MVNO and Rakuten roaming revenue were down by JPY 13.2 billion year-on-year. Multi-brand communications ARPU revenues up by JPY 6 billion. Financial Business and Energy business combined, up by JPY 17.7 billion. Equity method investment income of Lawson, up by JPY 19.4 billion and DX and Business Services segment, up by JPY 15.4 billion. And with others, such as increase in technology costs, on the far left, you see the temporary impact. This is the temporary impact of the provision for Myanmar telecommunication. But even excluding that impact, it was up by JPY 38.1 billion. Next, review of FY March '25. We balanced growth of major businesses and shareholder returns. We also conducted flexible share buybacks of JPY 400 billion. Next, in FY March '26, the forecast for this year, we will continue promoting satellite growth strategy and aim for revenue and profit increase. On the left, operating revenue forecast is JPY 6,330 billion, up by 7% year-on-year. In the center, operating income, JPY 1,178 billion, up JPY 5.3 billion -- 5.3% year-on-year. And on the right, profit for the year, JPY 748 billion, up 9.1% year-on-year. Next is operating income key points in FY March '26. We will aim for income growth in Personal and Business Services segment. The major factors of increase were -- are listed on the right side, increase in mobile revenues through value-added enhancement, including communications, growth of finance, energy and Lawson and DX growth centered on growth areas as well as the result of technological restructuring. The main factors of decrease were decrease in Rakuten roaming revenue and return to partners in order to create a virtuous economic cycle. Now starting FY March '26, we have a new definition of mobile revenues in Personal Services segment. With the recent service revision, various values, including Ponta Pass have been incorporated into the plans. Accordingly, we have changed to mobile revenues, which includes added value that has become inseparable from communications revenue. Mobile revenues increased to JPY 1,850.1 billion in FY March '25 and is expected to grow further in FY March '26. On the right side, we will redesign our multi-brand strategy in accordance with values provided and develop attractive plans for each brand that meet customers' needs. In addition to improving churn rates of au, we aim for the balance transition between au and UQ mobile. Ponta Pass is one of the values. Net increase in Ponta Pass since the release in October has been strong at 210,000 members and collaboration with Lawson has been a success. Number of users redeeming benefits reaching a total of 25 million. This year marks the 50th anniversary of Lawson's founding. So with a firm focus on Lawson, we promised to support its next stage of growth through further collaboration with telecommunications and the use of technology. In Financial business, we aim to expand our customer base. Operating income for FY March '25 was JPY 40.6 billion, an increase of over 20%. We grew mainly through Jibun Bank and credit card business using the Money Active Plan on the right as a lever where the number of subscribers exceeded 1.5 million. Next is Business Services segment. We aim to achieve double-digit sales growth in FY March '26 led by the growth area. High profit margin IoT services and data centers will realize a combined revenue increase of approximately JPY 50 billion and new revenue base such as securities, facilities, Starlink, drones are receiving strong inquiries, thanks to robust digital demand with total increase in revenue of JPY 90 billion. Revenue in the base area will also increase through mobile value enhancement. By capturing these demand steadily, we aim to achieve our target of higher profits for FY March '26. Next is shareholder returns. In addition to EPS growth, KDDI is also committed to dividend payout ratio and continued dividend increase. In line with sustained profit growth, DPS has steadily increased. We aim for DPS of FY March '26 to be JPY 80, up 10.3% and 24 consecutive DPS growth. In addition, we resolved to cancel treasury shares over 5% of total number of issued shares. The company also resolved to acquire treasury stock totaling JPY 400 billion as the upper limit and to make a tender offer for its own shares up to a total amount of JPY 350 billion. Based on what I have explained so far, let me talk about the EPS, which is an important target in our current midterm management strategy. FY March '26 is the final year of the current midterm plan, and we have an unwavering determination to continue our target of achieving 50% EPS growth vis-a-vis FY March '19 under a new management structure. By achieving both business growth and shareholder returns, we aim for EPS of JPY 194.38 through 50% growth. These efforts will also result in improved capital efficiency, and we aim for ROE to be in the 14% range for FY March '26, excluding the financial business. Finally, today's summary. We will create value by focusing once again on the power of communications and further evolving and enhancing the power to connect. On top of this, we will focus on value creation through digital data and AI as the next growth driver. We will also promote efforts to achieve the EPS target, the key goal of the current midterm management strategy. Thank you very much for your attention. We will now take your questions.

President, Matsuda, thank you. Now we would like to entertain questions from you. [Operator Instructions]. SMBC Nikko Securities, Satoru Kikuchi-san.

SMBC Nikko Securities, Satoru Kikuchi. Thank you. Your presentation I think it was pretty impressive. In EPS, the income, the growth and also the return to shareholders with share buyback and payout ratio dividend, but everything has already been known actually. Something new. It's rather difficult for us to seek something new from this presentation. What are your goals? What are your targets, specifically? Perhaps you must -- we might have covered everything, but something symbolic. For instance, if you look at NTT Global, SoftBank Miyakawa-san on AI, it's easy to see. We don't really know whether they can actually pull it off, but that's what they say. Mr. Takahashi, former President, now Chairman, do something symbolic Lawson in few years' time? Whether Mr. Takahashi was right or not, I think it will be evaluated as a result. Matsuda-san, something symbolic in a good way, something that you leave as legacy. What are you going to build? Probably main brand, au -- strengthen au or maybe not au, but something called KDDIX that could happen and communication to differentiate from the UQ. That's about the fast lane, and I think that's great. So DX, EX, you have been talking about this for a while, but it looks like there are some lack of resources, revenues, JPY 3 trillion. Operating income, JPY 500 billion is the target. It can be numbers, something symbolic. You can talk about something symbolic. It can be something about the structure. Please share those with us today because I would like to just take that as a souvenir.

Thank you for your question. You are right. If you look at the business results, today, former President, Mr. Takahashi, he built the foundation. And that has led to what I shared with you in my presentation. On several occasions, they had a chance to speak. But this foundation, which has already been established, how we can grow them further, that's my responsibility, my role, as I understand. So when I shared with you my role -- as I understand, so when I shared with you, I talked about I want to commit to 2 things. From customers, they would probably acknowledge that we -- they want the good communication quality and then to C to B business, what kind of business do we want to grow in what manner. We have data and AI. So integration of data and AI, I think that's what people generally say, but you mentioned Lawson already. So far, on top of communication, something that is just an ordinary thing, but data, AI layer -- additional layer perhaps can be inserted. Can we grow further with that? In various kinds of domains, I think it corresponds to each domain under the satellite growth with generic or general foundation strengthening it further. As a platform, that's something that needs to be done. For each and every orbit, how much growth can we envisage? I don't have the exact numbers to share with you at the moment. But towards the next midterm strategy, we have to formulate them, of course. Conceptually, we have objective strength, how to capitalize on that communication and on top of that, using data and work with AI. So AI foundation, we have been preemptive and we have been well prepared. That's the structure. I hope you will understand.

Second question, one of the basis about the connection. You have good superiority. But regarding the Opensignal, DOCOMO, SoftBank, they want to be ranked #1 next time. I don't really think this is the gap that cannot be filled. In the next year, if they win over KDDI, your foundation might be lost. And also satellite in 3 years' time, all the 3 players will be probably offering the service. So in addition to connection, what will be the next target? Today, it might be difficult, but perhaps on the next occasion, you could share that with us. The power to connect as the next step, as the next target, is there anything that you can really see please share that with us. That's my second question.

About our competitive edge. First, concerning the network part, each company has been really competing with one another, and that's how it should be. Regarding the competitive edge or superiority, one, this is about time or time to market, when can we deliver this to customers. So this is the fast mover, the superiority, 5G base stations. We have many base stations, 5G area, sub-6 area, SA stand-alone. We have been establishing them, and then we are in the midst of competition. With intense competition, we would like to do the competition and deliver to the society at large. Next concerns technology. This time, 3 communication values have been incorporated into the plant. There are lots of new technology. We just not let technology be technology. But in the case, we have plans in such strong engines, how best we can incorporate technology into those things. We believe that's another axis of competitive edge. So speed, time. Timing-wise, we don't want to be beaten. We believe that's part of the pillars in terms of competition, we want to do better.

So next question, please. Nomura Securities, Masuno-san.

Yes. Masuno from Nomura Securities. I have two questions. So first, about the midterm plan and the current position. So starting with the midterm management strategy. Looking at your company, your feature is you are rather low key, but you're always steady and you always promise -- realize your promise and have been increasing your profit and sales for 20 terms in a row. So corporate culture is reliable. You can depend on KDDI. So my image is the communications revenue Ponta Pass content, maybe JPY 10 billion plus on profit and financial JPY 10 billion plus and corporate IoT, data center, JPY 10 billion plus on profit and energy, JPY 10 billion plus. So that's one to JPY 50 billion in total and AI and the technological advancement and cost reduction, possibly JPY 10 billion. So that is JPY 60 billion a year. That's a 5% increase in profit margin a year. And if you do share buyback, 3% reduction in the number of shares. So if you do that, 8% EPS growth. And how many years you can repeat that will be the key. So it's an accumulation of the cycle. So that is the base result if you execute this. So my question is this kind of bottom-up initiative, can you realize all this? Or are there any new ideas in the next medium-term plan period? So the steady accumulation of the measures and your next move, if you could share with us anything.

Thank you very much. So our steady steps towards the next stage, we have to do that. And that is why we're seeing a virtuous economic cycle and reinvestment. Now as you rightly said, this year's blocks -- building blocks, we have to build all these measures. EPS, we need operating income. JPY 60 billion growth is needed in operating income. So we need to break this down and execute the measures. Now each and every measure will grow. There are ones that will continuously grow and other additional measures, and that's why we showed you the time line. In the past, we plowed the seeds and they are now growing and harvesting the Finance and Lawson, Energy and Business segments -- Business Services segment. These have been growing, but they all have more room for growth. So it's not just a linear growth. We hope the growth area will grow with the combination of AI and grow faster in the next medium-term plan period. Of course, we have to think this hard in the next 1 year. It's not that we have any magic wand. The operating -- AI can change all the operating components. And so we want to utilize and leverage AI to grow all these.

So towards summer to fall, I think we can exchange views on your next medium-term plan. So I look forward to the next opportunity. Next question. The price revision this time. I've been watching you for a long time, but the existing users' price has changed. And this is the first time in the existing 30 years. You are adding new services. It's not the revenue, it's the service upgrade. And there's a risk that this may cause opposition, but Ponta Pass and Starlink and these benefits are included and JPY 300, 3 coins. So I think this is convincing. Of course, we never know until we try, but the consumers, the users, I think, will understand this to a certain extent. So my question is, will change the entire user base? So this will have quite a big impact on the sales and profit, but to what extent. How much is incorporated in this year's plan? Year 1, it's not full 12 months, but what kind of sales and income impact are you anticipating? It's difficult to say this in front of customers, I know, but how much positive plus impact are you thinking of?

Thank you for the question. So the service revision this time, it's not just a revision per se, but the structure for this year is mobile revenue, JPY 30 billion. And financial and energy, Lawson, JPY 20 billion level and Business Services segment, IoT growth area, growth inclusive JPY 40 billion and the technological advancement, JPY 20 billion. So total JPY 110 billion block. This is the kind of growth we want to achieve. On the other hand, as shown on the right side earlier, Rakuten roaming revenue decreases and the return to our partners and one-off temporary headquarter relocation, these one-off events. So all inclusive, JPY 50 billion. So plus JPY 60 billion will be realized. Now this is the first round. And going forward, we will do further investment and further value creation. So mobile revenue, JPY 30 billion is our forecast. This time, with the service revision, since last year, we've been discussing heavily internally. And as you rightly said, how can this value be convincing and persuasive, safe and secure and stress-free. This out of reception range or overseas or congested area, if it's a value that can offer safe and secure sense of comfort, we think it will be accepted. So that is how we set this level.

[Operator Instructions] Okasan Securities Okumura-san, please.

Okasan Securities, Okumura is my name. About leverage, what are you thinking about leverage? Competitors are making investment -- have been made a decision with leverage. Net leverage ratio, what's the cap or what's -- how would you like to maintain them if there are no changes, please share with us the background. That's my first question.

Thank you for your question. Regarding this issue, net debt to EBITDA 1.5x, excluding financial business. As KDDI, using financial leverage, we would like to allocate more resources for growth. Towards the next midterm management strategy, we would like to do this exercise. For instance, 1.5x to 2x. That means that there will be some additional JPY 1 trillion, and we would like to use that for investment without fail. Anything else?

Well, thank you. Some supplementary information about financial business. Au Financial, loan-to-deposit ratio, LDR, that's exceeding 100%. Regarding this level for your company, is it something normal or mortgage loan growth? Is it something that needs to be curbed? Do you have to be concerned about this?

Right. Thank you for your question. Concerning the ratio, we would like to lower this. The deposit part, we must increase the deposit more. Concerning this, in the past, centering on Jibun Bank, we came up with measures concerning deposits. But in addition to those group as a whole, how best we can increase deposits. We already launched the project. Using the whole of the group, we would like to acquire more deposits.

Second question. Next term and beyond the shareholder return. If possible, could you talk about this? This time, there was a sales of shares by major shareholders, then the total return was close to 100%, limiting what you can use for investment. But next term and then beyond, what would be the balance concerning the investment to the extent possible?

Well, return investment, we need to strike a good balance between the 2. But as I shared with you, concerning the cash allocation, one is utilizing the financial leverage. That's one. But on the other hand, we would like to give returns to shareholders. And for this, including CapEx and M&A and investment for future, I think you are talking about the balance there. Here, financial leverage, we would like to put that into the scope of what we can study.

Next question, please. Daiwa Securities, Tokunaga-san.

Daiwa Securities, Tokunaga. I have 2 questions. First is competitive landscape. DOCOMO, first, the high price zone raising with DOCOMO and Softbank and Rakuten have not followed suit much. So your price revision, the current situation, is it more promising than when you developed your guidance? Or look -- you never know until you look at the competitors' plan -- the high price plan. With UQ, the competitive landscape will change completely. So what is your view on the competition?

So the competitive environment. So Personal Services segment, Takezawa-san will answer.

Yes. Thank you very much. Takezawa from Personal Business sector. So your question on the competition. We announced and before that, DOCOMO made a move. DOCOMO -- SoftBank, as Miyakawa-san said, the financial results briefing agree in the general direction, as I understand, looking at the right timing. We made the announcement the other day. The new price plan reception has not started. And before that, our current plan is still being received and accepted. So right now, we do not have any traction yet on the competitive environment. Nothing that I can share with you at this point in time. But the purpose of our service revision, as Matsuda-san said, we want to set a virtuous cycle -- positive cycle and offer value to our customers. We have 3 in communications and 2 added value. Value link was established this time. First -- we want to deliver this value to our customers, first and foremost. And that's when the competition starts. Thank you. I hope this answers your question.

So regarding UQ, I have a follow-up question. So if Y!mobile does not revise UQ and Y!mobile competition may change. What do you think about that?

UQ. This time, we simplified it into 2. One, the stepwise plan is [indiscernible] and the price we prepared this time, the gigabyte doubled this time, a big jump. And with that, we also attached other values. So quantitatively plus -- subscription plus one who want to look at just individual ones or in Netflix, I think 20% will come back and still JPY 200 economic benefit. So SoftBank, I don't know what they will do. But this time -- the plan we are proposing to our customers this time, I think, offers a certain amount of value and economic benefit. That is our current view.

My second question is the change in -- on your KPI. This time, mobile revenues until now mobile and added value were our viewpoint, but those are combined. So mobile revenues, this is not just communications but also the product support and content and financial is singled out. So you changed your KPI, what is your purpose? For example, repair and compensation, product support or content you can add more added value, and there's Ponta Pass. So could you elaborate on qualitative, quantitative reasons of the change, please?

Yes. So let me start. So the service provision this time, the new price plan includes communications and added value, the barrier between the two is disappearing. So how we evolve our plan is one key point, Ponta Pass and subscription plus. We want to stress the added value. On the other hand, value-linked plan will increase its momentum. And so the related added value should be shown in one bulk -- in one group. And that is the reason or the trigger for the change. And financials, because of the business nature, we think it's better shown separately. So we divided that part.

We are running out of time. So next question will be the final question. And just one question, please. [Operator Instructions], Morgan Stanley Securities, Tsusaka-san, please.

Morgan Stanley, Tsusaka. About KDDI, how to earn? I would like to get your input. From the equity market, shareholders want certain things. And what you actually implement? They are not always linked. But now if you look at consumers, if you bring in them with various services in a good way, they offer added values. In a bad way, it's just a bundle. The plans will be so limited because they will be bundled and consumers will have to buy something they don't even need. And unless you increase the prices, the population is not actually increasing. So on the part of consumers, increasing revenues and profit in consumers' business will be rather difficult. That's how I look at it. On the other hand, unique to KDDI or unique to telecom operators, know-how, technological prowess, networks, solutions or what customers want. In the enterprise, if you could sort of address those issues to solve those problems, that's one possible way. What will be the sound way to go for consumers, imposing things in a bad way of describing things and this may not really be sustainable. This is how I look at this matter. As long as you can continue, yes, of course, you can continue. But in a longer term, to transform the society with certain solutions, though if the management resources can be shifted to those areas and then try to make more money, I think somehow that would be healthier, sounder. What is -- how do you look at this? If I could just say one more thing. On the part of investors, regarding investment in your company, stability is one. Many investors want stability. For instance, Lawson's acquisition that happened, but later -- people may appreciate this, but back then, they didn't want this because for retail, if they wanted to make an investment, they could have done that. That's not particularly something they are looking for in KDDI. So that's a kind of a gap. I think we might see that kind of a gap in the future capital allocation. How to make money, how to grow your business for KDDI or for communications industry? What would be the optimal? What is your thinking? Please share that with us.

Near the outset of my presentation, I mentioned this, combining existing things and making it in a bundle, that's not what we want to do. Once again, about the communication values, we shed light on that are new. In the communication history, 3G, 4G, 5G. For customers, what are the values, they have been discussed extensively, but 5G has been launched for 4 years, and then we are looking at the possible next generation, how to enter into the mature era. As a technology, there are various kinds of technology related to 5G, but how to communicate them to or deliver them to customers, there have been some gaps. But by shedding light in communications, sort of changing the values, we are now talking about the values to the customers, but that's what the value-linked plan is all about. Rather than combining existing things, once again, we want to sort of inculcate the power of communication and also our values. We need to continue this 5G SA or beyond 5G or 6G, what will be the values? We won't be able to see them. So we were particular about them in coming up with this. So at the outset, you're talking about bundling existing things and it's trying to increase, that's not what we wanted to do. We are proud to say that we created new values. And in addition, about ICT solutions, I think it's about the 2B environment, but offering those solutions since we have many touch points -- strong touch points with corporate customers. In the ICT, there must be some expected values, not just communications but on top of that, including AI, we would like to build them and then deliver them to customers with a sense of speed. How best we can pull this off quickly, I think that's really about how we can make money. You mentioned Lawson towards the end. It's not that we wanted to do something retail. Lawson had certain things, including problems. They need to reduce labor. They have to do this, and that's an area where we can help them. Also, Lawson is deeply rooted in community in terms of how they deploy outlets, stores. There are certain things we can do there. For instance, in terms of AI processing, not centralized AI processing, but distributed processing. When that happens, it's also true for our base stations location it's important. Maybe we can find a good synergy. So inclusive of that, we have been looking at Lawson efforts. It's not just retail per se. More broader perspective is what we have in terms of our efforts.

So with that, since time has come, we would like to close financial results briefing of KDDI Corporation for the fiscal year ended March 2025. Thank you very much for your attendance. [Statements in English on this transcript were spoken by an interpreter present on the live call.]