LIXIL Corporation (5938) Earnings Call Transcript & Summary

[Interpreted] It's 3:30 now. We would like to begin LIXIL Group financial results presentation meeting for fiscal year ended March 2020. Because of COVID-19, we are holding this meeting through a live streaming and call conferencing system. I would like to ask for your understanding. If you have any problems connecting to live streaming, may I ask you to use call conferencing system instead. If you do that, you will not have video, but you can still hear the audio. Allow me to introduce to you the speakers for today's meeting. From your left-hand side, Director, Representative Executive Officer, President and CEO, Kinya Seto.

[Interpreted] Good afternoon. Thank you very much.

[Interpreted] Representative Executive Officer, Executive Vice President and CFO, Sachio Matsumoto.

[Interpreted] Thank you very much.

[Interpreted] Head of IR, Kayo Hirano.

[Interpreted] Thank you.

[Interpreted] I will have the privilege of moderating this meeting. My name is Uto from IR department. With regards to the presentation materials, if you are attending this meeting through live streaming, please look at the web screen. And if you're attending through conference call system, please refer to the documents titled Information for Shareholders and Investors. Next, I would like to explain to you how we plan to proceed today. First, Seto will give you an overview of financial results for March 2020. And then we will have Q&A. Let me explain to you how you can ask questions. If you are connected to Internet live stream, you can use chat function. In top right section, there is a button. If you click that, you can ask a question. If you are unable to use chat function or if you are attending the meeting through our conference call system, please send an e-mail to the address stated in the invitation. You can ask questions any time during the meeting. And we plan to finish this meeting at 4:30. Next, Seto will explain about the financial results for the fiscal year ended March 31, 2020. Mr. Seto, the floor is yours.

[Interpreted] Thank you. Next page. And next page, please. And these are the highlights of financial results. The revenue is more or less flat. For the Japanese market, we saw a decline after the last-minute buying before the consumption tax hike. Turning to overseas, Asia was not very good, and Americas was not very good in the first half, but in the second half recovered. And it's still 2.5% decline year-on-year, but that is mostly due to ForEx. And without the impact of ForEx, it's a 1.2% increase year-on-year. And the core earnings this time, Career Option, long-term beneficial Career Option Program, which is an early retirement program was implemented. Without this, it will be JPY 64.1 billion and 17.7% growth year-on-year. In Japan, in housing business, we had a price hike. And in Europe, our business was solid, and North America recovered in the second half. Those are the reasons why we had an increase in core earnings. Net profit. Thanks to the increase in core earnings as well as divestiture of Permasteelisa, the losses shrunk. And net profit stood at JPY 12.5 billion, which is an increase of JPY 64.7 billion year-on-year. As you can see here, the reference numbers one-off expenses, Career Option result at 17.7% growth year-on-year. So COVID-19, we gave a high priority to 3 things. First of all, employees, family members and partners, we must ensure the safety and health. And LIXIL business in many ways, LIXIL is contributing to the society. I'm very confident about that. And therefore, we must ensure business continuity. And at the same time, we need to secure liquidity in hand. In late January, I visited KBIS show in Las Vegas, and I immediately realized that this issue of COVID-19. And so I set up a global task force, shift towards teleworking. I can be proud about this. We had a very smooth and large and early shift towards teleworking. And that is because we have been doing a work style reform as well as digitization on April 8. 98% of employees working at the head office shifted to teleworking. And the scale of teleworking, 25,000 people worked from home. This, in my view, well, I don't have statistics, therefore, I cannot be sure. But this number, 25,000, maybe the largest in Japan. Not just working from home, in our case, every day, employees using Zoom, had conversations with customers and builders, using software to share quotation, they have the business negotiations. And the 360-degree showroom after customers viewed that our concierge consulted with them online and then quotation was given and specifications were given. And in some cases, the same screens were shared with the vendors. So very heavy and complicated softwares were used for those negotiations. And digitization, we have been working on that for a long time. And if COVID-19 started in January of last year, back then, 1,500 people would have been able to work from home, but not more than that. And EAA was introduced, despite of this, and VPN was enhanced before the spread of COVID-19. And therefore, without any stress, 25,000 people were able to work from home. And working from home, in many ways, can be stressful for employees like some of them may not have the environment or space to do so. And therefore, we paid -- the company paid JPY 50,000 to each and every employee. [ Fitch ] was -- Fitch had a very positive effect on people's motivation and the business continuity. Of course, logistics and production sites could not work from home, but everything else, we were able to shift towards teleworking. And because of coronavirus, we did this. But even after coronavirus pandemic is finished, we would ask only 40% of employees to come to the office. I myself and other people found it more efficient to work online. Like I myself have 20 or 30 meetings every day using Zoom, and those meetings can be conducted without any stress. And I can have a meeting with a huge number of people, like yesterday, Europe, America and Japan and Asia, product development people, and I had a meeting about the synergy without any stress. And salespeople, they strongly believe that they had to visit the customers' premises. But LIXIL, even at a time like this, people can have business negotiations. So they were quite impressed, and this became one differentiating factor. With regards to liquidity in hand, we were very agile in responding to that. And we had enough liquidity to begin with, but now we have even more. Next one, please. So the impact on this, for our production, in 2 of the plants in Mexico had suspended its production, but it is to resume from next week. And South Africa is now going through a lockdown. And therefore, production has stopped. And Asia, here, it says all plants. But India, production is not going on because it's locked down. But other than that, everything is smooth. And the product procurement in late March, kitchen and bathroom, some products, particularly dishwasher and bathroom dryer, all peers are buying from the same supplier. And therefore, it became problematic. But other than that, everything was okay. And for toilet, we had some delivery problem. But for other things, we had no problems. I wouldn't say no 0 problems. But Japan, Europe and Americas compared with other -- our competitors, procurement and production, we had the fewest problems, thanks to our well-developed global network. Sales side is slightly different between Japan and overseas. In Japan, the impact of coronavirus, I think May was the worst month. March and April, we simply handled the orders that we had received beforehand. And particularly in March, we had very few problems. In April, some of the orders were deferred, so it was okay. In May, the new housing construction impact was limited by renovation because people are at home. And when our people wanted to visit their homes, they were declined because people are staying at home and they didn't want others to come into their homes. And renovation is recovering in late May, but the problem is the new housing starts is dropping. Consumption tax hike and pre-Olympic, the new housing starts declined even before the coronavirus pandemic. And now, it is presenting an impact and the impact will be larger in July, August and September. In July and August, probably sales will drop 20%, which I think will be the bottom of the market. After that, the second wave of COVID-19 is possible. And due to COVID, economy has deteriorated and sale of houses may decline further. Turning to overseas market. In overseas market, April was the bottom. Of course, the situation is different country to country. But April, overall, negative by 30%. And May, after the lockdown, negative by 28%. But things are improving very quickly in June onwards, and June will be minus 17%. So China and the U.S., minus 4% or minus 3%, and the pent-up demand is coming back. Europe, locked down. The lift of the lockdown is slowing down, but things are improving in Europe. China, April, 7%; and May, minus 20%. You may become worried, but June will be minus 4%. The reason why May is low is KBIS. There is this big trade show named KBIS. And in our case, we see a huge surge in demand in May because of KBIS, but KBIS was not held this year. So that is one reason. And other Asian countries are faced with difficulty. India is still locked down. And Malaysia, Singapore and Thailand have not been released from lockdown yet. In Europe and the U.S., basically, demand for houses are basically not going down. But in Asia, out of overall demand, tourism, flights and hotels account for a big portion. And therefore, they are the first ones to be hit if things go wrong. So Asia is difficult. But overseas, April, May and June, things are improving. And regarding the first quarter, 25% reduction. And second quarter onwards, we will see an improvement if second wave of COVID-19 doesn't arrive. So what actions we have taken to support this for COVID-19. And we have been really well focusing on this efficiency improvements and this is somewhat related to what I have just said. And long before that, we have been working on this work style reform and to enable the flexible working style and also the work from home. And so this time, while we have really seen the progress all at once, because in this particular industry, there are some difficulties. And while the customers in the industry and all these people in the distribution well, they were really were expecting us to really come to visit them physically. But well, they just found out. Well, we can do all these with things on Zoom, in digital, e-connected class for a plug-in. And these are the tools available in LIXIL. And so everything can be done on the world web. And then, well, they were able to realize that. And also just one example. Well, there are so many Zoom meetings, which I have participated. All these were branch managers and all the people in the plants, and all of them have had the meeting. And they were just asking, why didn't we have really made use of it earlier. And were the branch manager in [indiscernible], we'll be just having 1 visit or 2 visit per day because they have to travel remotely. But with the Zoom, well, they will be able to have a larger number of meetings. And as for the digital transformation and online meetings, well, various tools have been utilized. And by using them, we're very quick and also very efficient. And overseas, well, the digital content has been developed in Japan. And then well, overseas, where people really looking at what Japan is doing. And then we try to really, well, enrich the content and also to make use of the larger number of tools on a global scale. Well, toilet, for example, we do have our production plants in different countries. And because of that, well, we didn't have much of the supply chain-related problem. And also because of this innovation, we were able to share a lot of things. And one thing to note -- and by 2030, we are going to see this sort of decline in population in Japan. Well, we were not able to really stimulate the renovation demand, but the high level of the renovation demand is really welcoming. And probably, you may have experienced. And if you work from home, and then we would like to have 1 additional toilet. And so they don't really want to touch the sort of the faucet. And so they really want to have their own working space or they want to have larger windows. And so this has triggered all these demands. And in that context, we have so many products we can offer and were not to touch anything and then touchless faucet. This is where we have a very well great strength. And so we are able to really offer this more domestically as well as globally. And so the shower sensor and also life assist and doors and shutters and windows, all of these can be remotely controlled by IoT or by smartphones. And also you can really, of course, use their remote controllers. And as so ventilation-wise, while door ventilation, while they are closed and also work from home and they want to have larger space and as an interior product, and you'll be able to have this, well, Vietas for panel to really establish the partition. And also we have seen the double or triple of a number of access from our customers on Internet for garden rooms and others and also remotely controlled for the delivery box. And these are really are going to be promoted immediately after the COVID-19 and to really see the growth in the renovation business. And we do have the strength. And of course, in difficult times, we would like to really reduce cost and improve efficiency and to really be profitable in doing these kind of new businesses. And we are really beginning to feel that kind of signs. And also the -- with the new normal and salespeople are very happy and pleased because this is something which were not done by other competitors and only LIXIL can do that. And there are so many customers who are saying that. And so we have really provided good support to the employees for their work style, they work from home. And then by so doing, we were able to see the increase in engagement among the employees, and we have seen improvement almost by 10%. And so that would -- what drive all our businesses further. And also these were highly motivated employees might be able to come up with better products. And also the digital service or online sort of services, and as you can see here, well, we can provide online services while combining commercial and proprietary technologies, and distributors and builders and owners can really were access blueprint together all at once on online. And also by having this, well, we will be able to really present the quotations, estimates online as compared to our competitors where in the U.S. or in Europe. We think we are the most advanced. And touchless faucet, and I am greatly interested in this product. And almost for the JPY 200 billion sales is being generated by the faucet business, and we are very strong in this faucet business. And also, we do have this distinct sort of strength for particularly residential touchless faucet. And not for the faucet and the public places. And we do have 2/3 of the patents related to touchless faucets is owned by LIXIL. And also we have the #1 share of kitchen business in Japan. And also 82% of share is for the touchless faucet in Japan. And so we can really reflect this strength in 150 countries or more, and to really have this e-business with the size of the JPY 200 billion sales and also by having as well very well close to the faucet, we will be able to install the filters for purifying water. And not just for touchless, for the COVID-19. And for those of the people who need to really go out of their homes to really buy water, well, they will be able to enjoy a very tasty water from their faucets. And in the previous year. Well -- and in Japan, JPY 4.4 billion in Japan and JPY 9.8 billion is the sales in global last year. And then we are expecting that this is to really go up to -- this was JPY 166.4 billion overseas and -- sorry, JPY 5.4 billion. And then so we need to reinforce for this business, and we are to quickly enhance this quality or production capacity and to grow this business and also we are strong in the touchless and were JPY 27.4 billion is the total faucet sales, and out of which JPY 4.4 billion is with the touchless faucet. But in terms of the actual sort of composition ratio, in terms of number of units, it's just around 4% of the entire faucet shipment, meaning that we will be able to reincrease while the sales by increasing the number of shipments and also to increase the profit margin. And taking advantage of the strength of the touchless faucet, we can really appeal to the consumers and that we will be able to really improve their life. And also, that can be expanded to other products as well. And touchless and -- it is expected that it will be doubled or tripled outside of Japan. And shower toilet, and the shower toilet in Japan is well. And without really touching, you can really operate this sort of the lift. But this time, because of the shortage of toilet papers in U.S. and Europe, there is a growing demand. Also, well, without going to really buy water and then while the filters. And likewise, for the touchless faucet, and we are very strong in this for the very compact size and high performance of filters can be really accommodated. And this is for the product offered by the American Standard this time. And also the growth investment for the e-commerce. In e-commerce, well, people would just associate our Amazon or Rakuten, just buying more products online. But our products will need to be installed, and also the construction work would be necessary. So we have to look into a variety of combination with different works. And so on the display, e-connect class for plug-in, well, these are the softwares available for us. And so by utilizing all these software, where everything can be done online, and this is possible in Japan. And we are to really expand this into overseas countries. And probably, we may have spent too much money to really have to be detailed and refined our products, but we are to do this more quickly outside of Japan. Now as for the guidance or the forecast. Because of this for COVID-19 pandemic, for the full year forecast for FY 2021, we were not able to really provide the guidance at this point in time. But at the next general meeting of shareholders where JPY 35 dividend is being planned and is expected to be resolved. So that's about all for me. But after this page, I just like to be very brief so that we can have as much time as possible for questions-and-answers session. The point here is that we are making a smooth progress for medium-term plan. And the review of business portfolio, Permasteelisa, Senior Life, Suzuki Shutter and Ken Depot are divested. And we are simplifying organization, not just that we are reducing the number of layers. And as I said previously, work style reform is ongoing and digitization and launch of differentiated products, we did all that. And what we are exerting efforts, SATO and CO2 reduction, that is having a positive impact on employees' engagement. Financial statements and indicators and ratio of equity attributable to owners of the parent, it looks as if it's going down, and that is because under IFRS, addition assets is classified differently. So making apple-to-apple comparison, it remains the same. By segment, it’s as stated here, but what is noteworthy here is housing improved significantly. Housing business, partly due to the price hike, interior and exterior and [ sashes ], we have been able to raise prices and investment amount is for being reduced. And also, we have seen the sort of improvement in management, and 5.6% without the impact of the Career Option Program, and we think we will be able to improve further. And I think I have covered the major highlights, and I'd like to really turn to the Q&A session to take your questions.

[Interpreted] This is Matsumoto speaking. Before taking your questions, I would like to add one thing about the dividend. Page 11. So the dividend payout will be resolved at the AGM, but rather, decision will be made at the Board meeting in our case. On June 5, we will hold the Board meeting to resolve a JPY 35 dividend payout. So decision will be made then, and the actual payment is scheduled to be on June 30 when AGM will be held. And this is for March 2020. And with regards to March 2021, as Seto said, consolidated corporate performance is not certain at this point. And therefore, we have not decided the dividend payout for March 2021. Now I would like to begin Q&A session.

[Interpreted] I would like to share with your questions that we received through chat and e-mail. And if you have any questions, you can still send them now. Let me share with you the first question. Fukushima-san of Nomura Securities. So sales in April and May in overseas market seem to have had a huge decline. Probably, it's due to COVID-19, what would be the goodwill impairment risk?

[Interpreted] So we conducted stress tests thinking about the even worse case than COVID-19 and the results turned out fine. So no impairment risk, goodwill impairment risk. But in March, operating profit declined a little bit. As a result of a very strict impairment test, we decided to impair some overseas assets, but we have taken a very conservative view. Therefore, no risks remain going forward.

[Interpreted] Another question from Fukushima-san of Nomura. So you implemented the Career Option Program in order to increase competitiveness in Japan. So the plant, the production line, consolidation, what the kinds of progress are you making? Could you share with us the plan for March 2020?

[Interpreted] So with regards to reorganizing plan, that is a very sensitive issue. And for the information we have not disclosed, I would like to withhold answering. And for March 2020, nothing special. And the exterior and interior platform, production lines have been organized, consolidated. And such, the premise for platform, we needed to create space. And in order to create space or free up space, unprofitable products and products that are produced in small lots, we try to raise prices, for example, and it's making good progress. And streamlining of plants, it's progressing smoothly, in line with the plan and platform and streamlining plant and streamlining production plant -- production line and the SKUs and particularly LHT. CapEx is decreasing, as planned.

[Interpreted] And from Goldman Sachs and Okada-san, housing technology business and JPY 6.3 billion, while the cost reduction effect was really achieved. And cost reduction and improvement of the product mix, is it going to be sustainable into the next fiscal year?

[Interpreted] As I said earlier, as far as housing is concerned, we are making steady progress. However, well, if I can start from the very beginning, the issue related to this particular business is where breakeven point is too high. And when there is a sort of demand decline, it is quite sensitive. And this time, the demand is expected to decline quite significantly for this fiscal year. And also, of course, we have to come up with some measures addressing that. But 10% decline in April. But LHT-wise, well, they were able to really well generate profitability almost in line with the plan. And so to high breakeven point and much of the volatility has been well resolved. And as we are working on this production reform and also we are really well making a lot of -- well, doing stricter control on pricing and also to reduce fixed cost. And I think we will be able to do better. And as far as this fiscal year is concerned and fixed cost ratio needs to be addressed as we are going to see a decline in demand. But when we see the recovery in demand, I think we will be doing better.

[Interpreted] Another question from Okada-san. Well, during the state of the emergency declaration, I think the showrooms are being closed. And when do you expect that they are to resume this operation?

[Interpreted] So after there was state of emergency was declared. And all these were sales activities were ongoing, though showrooms were closed, the online showrooms were open. And of course, in terms of the capacity, we were not able to really accommodate the great number of customers. Probably, we are not really sufficient enough. But as for the physical showrooms, and we are to have the full reservation and to minimize the time to really cater to the customers. And already, we have the pent-up demand, and it's almost quite full. So that would be really well covered by the online showrooms, and that's what we are now doing. And as I said at the outset of this briefing, and safety and health of the employees are our top priority. And so if we are to really have the congestion in showroom, that is something we definitely need to really avoid. And so they were the same number of the bookings in showrooms, we cannot be accommodative for some time to come. And so we have to really offset that by the online. But number-wise, we will not be able to come back to the original level.

[Interpreted] From SMBC Nikko Securities, Kawashima-san asked the following question. March 2020, overseas business, what is the reason why this variance or fluctuations in core earnings? Excluding Permasteelisa, the plan was to have a JPY 9.6 billion increase, but actually only JPY 800 million increase. If there are differences between the direction of -- or the objectives of the measures and the reality, please share with us.

[Interpreted] Regarding Americas, the home center business. Our business is deteriorating because they are coming up with the private brand, and distributors are also coming off as private brand products. And in order to respond to that in channel, we are to sell our products directly to the consumers using e-commerce channel and others. With regards to the U.S., starting in the fourth quarter, things have recovered and we were able to offset the previous decline. So regarding Americas, we are to stick to this policy. In the U.S., by changing policy, we were able to improve profit margin and we would like to keep growing profit margin. And the private brand, private branded, the products of the home center, because of the disruption in supply chain, there was difficulty but things are becoming normalized. And April and May were not very good in overseas market. But June, it seems that a huge recovery is to be realized, minus 3% is the likely figure. But of course, there are some uncertainties due to COVID-19. 2020, the biggest disappointment was in Asia. Asia, China was good. China, we were able to increase our share. But fourth quarter after the Chinese New Year, because of coronavirus, we sort of failed in fourth quarter. And the biggest problem was Asia. With respect to Asia, each region has different set of problems like South Korea is going through recession. Korea itself is having difficulty, market is shrinking. And Thailand and Indonesia, unfortunately, well, Asian market overall, Asian market was not good, but also we were defeated by our competitors. But in Vietnam, we are seeing improvement. In Asia, the situation is mixed depending on the country. But probably coronavirus hit more severely Asia, India and Philippines are locked down. So Asia, we are having difficulty. But on the other hand, Europe and Americas, we are seeing the signs of recovery.

[Interpreted] Next question we received by mail, Merrill Lynch, Omuro-san's question. In product lineup in for support in Europe. And then for the touchless faucet and also there were automatic opening and closing for the toilet lid, do you think that you can aim to see the increase in such product lineup other than these?

[Interpreted] And as touchless products, already we do have other touchless products. And I think, I talked about life assist, for example, doors. And touchless products are really going to be increased. And not just touchless. On our part, from the customers' perspective, to create an environment where they can feel comfortable in terms of hygiene. And as for the renovation, in April, May, and clearly, because people cannot visit for customers' houses and so there is really well going to be the lack of this the on-site investigation, which need to be done. And so the renovation business in terms of the long-term development, well, conversely, we are very well confident. And if we are just looking at fiscal year ending in March 2021, people might find it really difficult to accept people coming into their houses. But in a longer-term view, well, because we see a rapid increase in the number of inquiries, for example, products like the touchless faucet and also to accommodate spaces for their work from home. And so we believe that is something we can really expect higher demand.

[Interpreted] Another question from Omuro-san of Merrill Lynch. And Page 3 in the reference materials. And while the efficiency improvement of the housing technology, can you give us the elaborate for information on that? And also there was such for business development and the reduction in number of parts SKUs. Well, despite the COVID-19, do you think you'll be able to make your planned progress?

[Interpreted] LHT-wise, the most important pillar is to really make the platform production possible. In that context, everything is progressing steadily in line with the plan. And while in LHT, and aluminum industry parts for the auto is in shortage and aluminum raw material cost is increasing. But other than that, raw materials cost is coming down and SKU number is coming down. And for the very first time, the platform-based product can be well launched. And so this year and the next year, I think we will be seeing the better sort of business results.

[Interpreted] From Morgan Stanley Securities, Katsuyama-san asked the following question. In [ Tanshin Flash report ], on Page 25, regarding divestiture of Permasteelisa, a relation post divestiture relation, up to JPY 8.1 billion guarantee LIXIL will provide, until when this restructuring plan will be conducted? And in the third paragraph, before the transfer of equity, a certain amount of money is to be expensed. Can you be more specific about this? And up to JPY 12 billion, it can be returned, and what are the conditions? With regards to Permasteelisa's cash flow, for example, free cash flow turning positive, is such a condition necessary or not? And altogether, up to how much additional cost may incur? And impact on cash flow and consolidated performance, could you share with me?

[Interpreted] I, Matsumoto, would like to respond. If I may jump to your conclusion, this warranty, no signs that this will be necessary. So that is -- this is a contingency. If it becomes clear that we actually need to pay this amount, then it has to be included in the number, but it's not included. That means that it's a contingency liability. In the previous page, Page 24, the selling price and the contract, the buyer Atlas strongly hopes not to disclose the information. And therefore, the contractual provisions, we cannot share with you. But as we are a listed company, there are some items that we must disclose, and those items are stated here. If I may repeat, the litigation costs and restructuring cost and other expenses, if probability is high, we must recognize such expenses. But at this point in time, no possibilities that these cost items will incur. And therefore, they are classified as contingency. Restructuring, Atlas, it's a PE, private equity company, and has a proven track record in business turnaround. And it has acquired many companies and actualized turnaround. What we held, I mean, when we held this company, we had a restructuring plan. But Atlas, as the new owner, scrutinized the plan and Atlas may decide to keep certain functions and to generate synergy with other group companies of Atlas. So they will sophisticate the restructuring plan going forward. If that is possible, we thought it would be better if Atlas owns this company. That is the reason why we decided to divest the company to Atlas.

[Interpreted] Fukuhara-san of Jefferies Securities, and almost a similar question was raised as the previous question. So I would like to -- really won't reading it out. And the next question from Morgan Stanley and Katsuyama-san's question. And the way you want to carry on with the business reform this fiscal year. And sluggish for economic activity because of the COVID-19 and also the lowers the business sentiment. And I think while the domestic housing business is becoming more sluggish. And I would believe that business environment could be quite challenging for you. And from the perspective of carrying on with the business reform, what is the positioning of this particular fiscal year? And even though this fiscal year, as a result, it would be a little worse, but I think will you be able to take this as the opportunity to do more in terms of cost reduction than others. But will probably it'd be more preferable to really maintain and sustain the business as it is, but what is your specific strategy for this fiscal year?

[Interpreted] And whatever we need to do, we would like to really want carry it out and unprofitable businesses. So even though the market is shrinking, we are to really well as for price increase. And at the end of the day, in the final analysis, when the market recovers, I think the fruit would be bigger. And so that is the thinking we have. And on the cost side and also the structural reform, and there were some questions raised and also the plant reform or the production reform and also the various work style reform to improve efficiency and digital transformation without being lenient on that. And as has been pointed out, we think this is the opportunity for us to really accelerate all these initiatives.

[Interpreted] We still have some time left. If participants have any more questions, please ask them through chat function or e-mail. So if you have any questions, please ask them by using chat or email. So it seems that there are no more questions. We would like to finish Q&A session. And this concludes LIXIL Group financial results, our presentation meeting for fiscal year ended in March 2020. I would like to ask for your continued support. Thank you very much. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]