Marui Group Co., Ltd. (8252) Earnings Call Transcript & Summary

It's time so I would like to start the Marui Group 2024, March 2024 Financial Results Presentation. Thank you very much for your participation out of your busy schedule. The document is at the corporate site, you can download the information. March 2024, the financial results and the medium-term management plan progress can be downloaded. We are going to have 20 minutes of presentation, and then we would like to accept and entertain questions from the participants. Now it will be downloadable from -- you can view this at our site later on. CFO, Kato, is going to make a presentation. And then for the question and answers, Epos Card, President and Marui President, Aono; IR Head, Kutsukake are going to participate and 4 of us will be participating in the question and answer sections. This is agenda items for today. So March 2024 financial results and the status of the business will be covered first.

I'm Kato. Nice to see you all. First of all, I would like to give you the financial results of March '24 and the business results of each division. There are 3 points in the financial results that I would like to highlight. For the major 3 KPI: EPS improved by 20% to JPY 131; ROE 9.9%; ROIC was 3.6%, and we have exceeded all the plan -- revised plan in the first half. Now operating income went up by 6% at JPY 41 billion, and it was less than the plan by JPY 1 billion. However, real operating income was improved, an increase of JPY 3.8 billion in the second half from the decrease in the profit and the income of JPY 1.2 billion in the first half. In the segment, retailing was up JPY 0.8 billion and second half was JPY 2.6 billion according to the plan. FinTech was down by JPY 1.3 billion. But in the second half, it improved by JPY 1.5 billion. Lastly for the net income, because of the control and the reduction of extraordinary losses, it went up by 15% at JPY 24.7 billion, which is JPY 700 million better than the plan. This is the changes of the major 3 KPI. EPS was a record high at JPY 131. ROE was better than the equity capital cost. And ROIC was better than WACC. This is the differences of operating income. As I explained in the digest, excluding the liquidated accounts receivable, in the first half, in the consolidated operating income was down because of the onetime factors. But in the second half, it went up by JPY 3.8 billion to JPY 23.4 billion. For the different segments, because the tenant revenue improvement in retailing, it improved by JPY 2.6 billion in the second half, which is a better improvement. FinTech was down in the first half. However, because of various actions, it improved in the second half. Now these are the changes of the financial indicators. For the transactions as a whole, it was going very favorably, a record high. Operating income was JPY 41 billion, up by JPY 2.3 billion. It has not reached the pre-COVID level, but it's improving. The net income was JPY 24.7 billion, which is an improvement of JPY 3.2 billion. In operating income, the breakdown will be explained. Excluding the liquidated accounts receivable , it was JPY 2.6 billion, Retailing JPY 3.3 billion, FinTech improved by JPY 200 million. The corporate eliminations by giving the equities and other human resources capital investment, it was down by JPY 1 billion. This is the changes of operating income separated for the first half and second half. In the first half, liquidating -- liquidation of receivables, the Retailing went up, but the FinTech had a onetime cost, and therefore, it went down by JPY 1.2 billion. Second half, because of improvement in the retailing and also FinTech improved, and therefore, it went up and improved by JPY 3.8 billion. This is a segment by segment revenue and operating income. Retail, because of the tenant revenue improvement, it improved and operating income was JPY 7 billion according to the plan. FinTech, the revenue went up by JPY 16.5 billion at JPY 167.1 billion. However, real operating income stayed only by improvement of JPY 200 million, which is less JPY 600 million less than the plan. Now for the retailing, this is that factor analysis. The fixed-term rental revenue as well as event revenue went up, and therefore, the operating income improved by JPY 3.3 billion at JPY 7 billion. In a breakdown of the first half and the second half. In the first half, it improved by JPY 800 million. But in the second half, tenant and event revenue improved and also sales promotion expenses was postponed or utility cost went down and also cost reduction went up and therefore, improved at JPY 2.6 billion improvement. This is tenant revenue. Unoccupied area has gone down and the monthly tsubo rent went up and therefore, tenant revenue improved by JPY 1.3 billion. This is the unoccupied, unoperational area. Tenant leasing was very favorable at 8,400 tsubo at the end of March '24, which was a big reduction from 10,200 tsubo at the end of the previous term. This is the sales that does not sell, nonperforming tsubos, and it is up by 5% at 61% for the nonretail business and also the unit price also went up because of the category conversions. This is the number of customers coming to the stores. It went up by 7% at 107%, and therefore, compared to '19, before the COVID, it was 180 million or 93%. This is the status of the e-commerce transactions. Transaction volume increased for the ninth consecutive quarters. Temporary speaking, the underlying tone in the third quarter declined due to the impact of the search site algorithm changes and other factors. But although the market declined, the tone recovered, that underlying tone has recovered in the fourth quarter as a result of the countermeasure taken. And also, this is the -- I'll explain about the first half and second half of the FinTech of the operating income and breakdown in the first half. Due to decline in the affiliate, commission rate has declined and so the point expense has increased, some temporary factors resulted in the income decline. But in the second half, those factors have been [indiscernible]. So therefore, increase of the revenues have been [ surplus ] the increase of the expenses, JPY 1.5 billion income increase. And also, the affiliate commission rate has declined due to the prepaid charge usage declined as well as travel, entertainment transactions have been turned over, so that therefore has been improved. Point expenses and also the transactions have been declined due to the reviews on the point program for the charges, but the credit card transactions underlying tone are 3 points lower compared to the first half. But the point expense has also declined in terms of its impact on the income, it is plus JPY 300 million. The cashing and also in the half year impact compared to the previous year and including financial charges on the installment payments and due to the balanced recovery in the second half compared to the previous year, plus JPY 2.8 billion. It is the increase of the income compared to the COVID-19 -- pre-COVID-19 days. In the second half due to the leading real asset management corporation, a new partnership has been contributed in the increase of the revenues, a 15% increase compared to the previous year to become JPY 9 billion. And for the -- this is bad debt status, and bad debt has increased and also suppression of the write-off, the bad debt 1.6% of the bad debt ratio, which is the lowest -- record low level. Leading factors of the receipt of the payment, interest rate payment has been declined and we need to monitor the trend. And for the new membership, and that is the increase on the cards tailored to each individual's interest is 810,000 new members to the level of the pre-COVID-19 level. For the number of the card members have increased 7.59 million people, which is a record high, including those cards tailored to each individual interest as Platinum and Gold members, it increased to 57% ratio. And indeed, from the March, from the 2017, the March 2024, the fund is JPY 700 million, investment on JPY 300 million start-up companies. In total, it's a JPY 1 billion investment done. And it is -- accumulated total investment became JPY 28 billion from the March 2017. And that is for the co-creative, the profit investment. The profit is the JPY 1.5 billion increase compared to previous year to reach [ JPY 2.8 billion ]. That is the -- was the IRR at 13%, and hurdle rate 10% [indiscernible]. And also, this is the budget and the total assets, it is JPY 41.6 billion, an increase to reach [ JPY 1.35 trillion ]. And this is the asset allocation for the underlying core. Operating cash flow of JPY 39.1 billion, it became JPY 36.5 billion with the gross investment and also redemption to the shareholders. And those return to shareholders and also for the gross investments of JPY 17.9 billion, buyback is JPY 3.4 billion, dividend JPY 15.2 billion, and JPY 9.3 billion for the human resource investment, and the ratio of the human is expense was 26%. And we have achieved in terms of ESG, for the ESG indicators. Carbon dioxide emission reduction is the 350,000 ton reduction compared to '17 March. And the DJSI World issues, we have been selected at the 6th year consecutively. And this is the outlook on the March 2025, and that is the ROE is -- EPS is JPY 141.4, 8% increase. ROE is 10.4%, ROIC is 3.7%, it is exceeding the previous year. That is the outlook. And group total transaction should exceed JPY 5 trillion. A 10% increase of the operating income to reach JPY 45 billion. And the current income is 7% increase to reach JPY 26.5 billion is the outlook. And for the retailing, a 22% increase to reach JPY 8.5 billion. FinTech is 5%, an increase of JPY 44.5 billion. And then in March 2025, operating income consists of the tenant revenue increase and also increase of the electricity bill is to increase of profit income of the JPY 1.5 billion. Now the unoccupied area is going to go down is by 1,900 tsubo to reach 6,500 at the end of March '25. Now this is a tenant review outlook. The decrease in the nonoperational area and the rental increase is going to push the rent revenue by JPY 1.9 billion. Now this is an easy transaction outlook. We are going to have actions for SEO. And therefore, we are going to have more visitors to the site and we are going to have a JPY 2 billion increase at JPY 25 billion at March of '25 compared to the previous year. This is operating income at the end of March '25, because the onetime factors improved, the improvement situation and trend is continuing of the second half last year. And transaction linked and the non-linked revenues went up and it exceeded the increase in expenses. And therefore, it is going to improve by JPY 2.1 billion. Now let me explain the outlook of the market, which is going to be the assumption of the plan of March '25. In the cashless market, the credit card was concerned because it might be taken the market away from the payment services. However, credit card settlement has exceeded JPY 100 trillion in '23, and it occupies 83% of the cashless payments. After '19 -- 2019, the QR code settlement has increased. However, it has sustained at 130% of the previous year, which is the same as the growth rate of credit card. This is Epos Card, domestic credit card transactions compared to the previous year. In the March '24, we are not the only one who is suffering the decline, but all the entire market is down by 5% because of the repercussions from the recovery from the COVID. Now for us, it 4% down. Now this is the transaction, March '25 assumptions. Now last year, Travel and Entertainment transactions, because of the reversal of the revenge consumptions, it went down by 2% for the entire transactions. This has recovered in Travel and Entertainment transactions compared to the previous year and the factors is going back to the pre-COVID level. And therefore, the transaction as a whole is only down by 1% compared to the previous year. Now next, I would like to talk about the use of a prepaid charge. Last fiscal year, in the second half, there was a review of the policies and therefore it went down by 1% in the transaction. Because of the impact of the first half of the previous year, it is negative 1% of the impact compared to the previous year. Now this is a card credit transactions. Outlook for the March '25 is as follows. It is going to be 112% at JPY 4.6 trillion. Next, I will talk about the outlook on the affiliate commission rate review outlook. And prepaid charge reduction has reduction -- usage has been declined, and the rate has been -- declined has been stopped. So therefore, with plus 0.01% improvement this year this time. And point expenses outlook. In the second -- first half, prepaid charge increase, so therefore, it will increase on a temporary basis. But this second half, from the second half is the point program is in review, so therefore, the transaction should increase to the level of the same transaction level increase. And this is the dividend per share. With the introduction of DOE, since the previous term, the dividend per share, JPY 101 at March 2024. And in March 2025, it should be increased by JPY 5 to reach JPY 106. And also, if there is no further profitability or income can be expected for the future in the share price, we have to be more agile on share buyback. So therefore, to reach -- to set the limit, upper limit of the share buyback of the maximum of JPY 20 billion in the first half. And this is the 3 KPI progress. In March 2024, which is the third year of the midterm management plan, the operating income as well as the net income did not reach the original plan. Due to that, achievement ratio was between 93% to 99%. And due to COVID-19, recovery has been delayed more than what we have expected. But in April 2022, it is expected to recover to the pre-COVID-19 level. But still, there was some infection increase in sporadic basis. So therefore, until it reached -- continued until May 2023. So therefore, 1 year delay in what is the expected recovery from COVID-19. COVID-19 has impacted on the consumption expenditures. It has recovered to the level in finally in FY 2023. However, if you look at the breakdown due to the price increase, the essential expenditure has increased. However, the optional or discretionary expenditure is still below the pre-COVID-19 level and the real-term wages have not yet been back to the level of the pre-COVID-19. So therefore, it is expected to grow in the future. And when this changes, I think that phase will be shifted. Under such circumstances in -- FinTech have given some partial impact on that. Due to the decline of the optional or discretionary spending have impacted on the -- coming to the store as well as the transactions. So therefore, it has delayed in obtaining the new card members and in the midterm management plan. In the 2-year accumulation, the new card members were still negative 170,000 members. So in the credit card transactions as of March 2024 has been -- was below JPY 100 billion. From all of these things in the March 2024, major 3 KPIs became below the plan. So therefore, in the second quarter financial earnings report, as we have explained, with the new strategy to be further done in a very steady momentum for the remaining 2 years, we aim to achieve 3 KPIs. Specifically speaking, in terms of the cards tailored to each individual interest as well as the more productivity improvement of the human resource, with the card strategy enhancement and the operating income as well as the net income improvement and also co-creative investment change so that the impairment amount should be reduced. So the EXIT also interesting. And the EPS, JPY 200, ROE 13% and ROIC 4% will be the target. Thank you very much.

Now we would like to move on to the question-and-answer session. First question. Mizuho Securities Takahashi-san, please.

Mizuho Securities, Takahashi. I have 3 questions to make. Firstly, to Kato-san and to this year's plan, the assumptions and the philosophy behind this plan is something I'd like to know. I think it's an error of margin. But 3 months ago, you have explained very precisely, but you were short of the plan yet. Why it has been the case? Because 3 months ago, it's going to be very visible. What's going on? And can you look back on why it was short? And in the new year, new fiscal year, you think it's going to be -- it seems quite conservative. But what's the assumption? And today, I think you have explained that the recovery for the COVID is going to be -- was delayed by 1 year, but it was very visible. I think all the excuses and the reasons were added later on. It was quite disappointing. So for this fiscal year, what were the assumptions? And that's something I'd like to know. That's my first question.

Mr. Takahashi, maybe I can have your second question.

Yes, please. And my question is on to Aono-san and Saito-san, respectively. And for the retailing business, I think that has fared quite well, but tenant is coming and also in the non-retailing and also e-C is also growing. But what this specific area? What's the industry? What is the type of the goods in e-commerce? What is selling? Can you give us more details? Now based on that, for new fiscal year, is that going to continue with the same trend? Or is that going to have different business opportunities coming to the surface? Now with regards to FinTech this fiscal year, it is going to be 5% improvement of the operating income, and I think you have transactions improvement. And according to Mr. Kato's presentations, all the KPIs are going very well. However, operating income is only improving by 5%, which is not remarkable. Is there any background or factors that we don't know or realize? Because if it is going up and transactions going up by 2 digits, and it seems that operating income also should go up by 2 digits. But what's the reason why it's only 5%?

Now Takahashi-san, so let me explain and respond to your first question. It was short of the plan and we are very sorry. And as a factor behind that, in the FinTech, it was down by JPY 1 billion. It was about JPY 600 million in FinTech and JPY 300 million in the corporate eliminations. For the FinTech shortage, Travel and Entertainment was less than we expected in its transaction. And also, the commission of the merchants were less than we expected. And also the cash in commission and the rent guarantee was short of the plan. And in each area, JPY 300 million short, respectively. Now for the corporate elimination, digital human resources recruitment and hiring, there was a joint venture called Muture, and the recruitment activities was done and the recruitment and hiring was more than we originally expected. As you have rightly pointed out, in last fiscal year, plan was a stretched goal and plan, and therefore, in preparing for this fiscal year from February, FP&A was also ready and therefore, it was -- we had a very big analysis of why we were short of the plan. And we had the transaction of the merchants and also the fees and commissions were also analyzed. And we had a very certain unsecured numbers in our plan. And therefore, for this fiscal year, no, we are not going to repeat the situations of last year and 2 years ago of shorting -- the result short of the plan.

So why do you think it's going to be accurate? Is that because of the macro environment or is that the speed of the recovery? And you said that it's going to -- it was a 1-year delay, but you think that the real way is going to be going up? Are you going to be more optimistic about the optimistic macro environment? Or not only your situations, but what are the assumptions? And what are the background?

As I stated before, for the macro environment, the real wages are going up. That's what they said. However, for this fiscal year, the actuals are the basis of calculation. And the real wages are not reflected. And therefore, if there were no real -- or wages are going up and if there are more discretional consumption is done, it's going to be upside for us. And also in the second quarter, we have explained for the [indiscernible], there is enhancing the strategy to have the cards tailored to each individual's interests, and we can have an improvement in the revenue, but those are not finalized, and we do not reflect any upside potential. And therefore, we believe that we can achieve a plan for this fiscal year.

So let me explain. First of all, in terms of the tenant, revenue has expanded because the new tenants have been increasing with the rent that we are able to acquire those new tenants in by paying their rents. And in terms of the categories of its breakdown for the non-retailing, in the non-retailing, those are the stores that does not sell and that online, more experiential type of the stores, and therefore, online as well as offline. So for the online, those tenants are having the -- placing the real stores or physical stores, they want to work to do that with the Marui and the cosmetics and organic stores. And also in [ Namba ] Galaxy, which is their stores in Namba and those type of stores are increasing. Also, in terms of services, compared to before, it is different from compared to the type of the tenants are increasing. For example, they want to learn -- the customers who want to learn, there are schools, schools has been increasing and more than 60 tenants are now in -- is from school category, like English conversation or Japanese prep schools, but not only those types of schools, but also like a mahjong or the drone schools, casino schools, and also animation, illustration, teaching schools and those other things. 10 years ago, it was only 18% of those schools. As you can see here, there are 61%, and it has been expanded to the 61%, and that is why our revenues have been increasing. And also for the e-commerce, what kind of e-commerce are selling well? In the fashion, materials is 104%. So it has increased. But also nonfashion items such as linked with the event-type, non-linked with the animation materials as well as before pre-COVID-19, the fashion and apparel, shoes and bag, with these 3 items are dominant 90% pre-COVID. But in the last year, in 2024, March, it is 70-some percentage and then 100 more than other items have increased more than 120% increase compared to previous year. So in total, it is 110% compared to the previous year.

This is Saito speaking. Well, in your question -- as you have asked your question, in the past half of the year, that you may have some concerns, but we have increased the -- JPY 1.5 billion of the increase of the income. In the second half, increase of income of JPY 1.5 billion, we want to continue this trend, and the JPY 3 billion income increase can be expected in the future. But there are various factors impacting, but in this fiscal year, the biggest difference compared to the previous year is because we have made investment on this year on system investment, which we plan for this year because the FinTech is JPY 7 trillion or JPY 8 trillion of transactions. And then system, and we want to enhance our systems for the data centers and enhance the infrastructures. And those costs initially in the investment, between JPY 500 million to the JPY 1 billion infrastructure investment we need to make. And therefore, it would impact on the JPY 2 billion. That's why the income is still maintained at the level of the JPY 2 billion or so for this year. In that sense, as Kato-san has explained and the -- only looking at the cards data to each individual's interest, and from that position in the second half of the year, it is somewhat maybe paused those efforts, but a very challenging first half. But compared to that, in the -- it was outside such cost increase.

For the FinTech, you would be going -- you're not coming back to the growth trend and growth track, correct?

Yes. The next year target, as it has been explained, in the second half of this year, the market is still a little bit in a declining trend. But now those factors are already included in a very conservative top line plan is what we have today. So based on that, the JPY 1 billion increase of income is expected. And I will say it is okay. But now we have the sense that it is coming back now.

Now we're going to take the next question. Okasan Securities, Kanamori-san please.

I'm Kanamori of Okasan Securities. I have 2 questions or 2 requests. It is going to be -- or maybe some overlap with the previous question. In the third quarter, you had the financial results. And for the outlook of this fiscal year, you stated that in the fourth quarter, it is going to be a leap year and therefore, there are going to be more operating days, and therefore, the revenue is going to be solid in the FinTech. I think that's what you explained. And if it doesn't go as expected, you can have cost control. And therefore, the income target can be achieved sufficiently. In the third quarter, you are quite confident in communicating. Everybody asked to know whether it's going to be okay or not, but Kato-san and all the executives and management said that it can be achieved. Now this time, once again, in the third quarter, the up and down of operating income of the revenues as well as the cost compared in the FinTech, I think it is short. And I think the revenue was not achieving the target. I think cost was quite well controlled or maybe according to the plan. However, top line did not achieve the plan. I think there are many factors behind that, but I think this is a top line shortage issue. But I think it is going to be a repetition of the previous questions. But COVID and some other reasons can be listed. What's the biggest reason? What's the biggest reason in the past 3 months? What was the differences? Why would you not be able to achieve the plan? Can you repeat that point once again?

In the FinTech, the top line revenue after the third quarter was not as expected achieving that plan and you're looking for the explanations. Now firstly, for the commission of the merchants. In the third quarter, compared with our expectation, it's down by JPY 400 million. This was a leap year. And because of that, we expected that it's going to be an improvement in preparing the plan. And compared to the January and March, February was better because of the leap year, but the base number, as I explained, as the industry as a whole, was very sluggish, it was low level. We didn't really -- we couldn't expect and forecast at this low level. And that has been the major reason why we did not forecast the merchant commissions right. In addition, the rent guarantee service. In the PowerPoint presentation, the major alliance with the major players was explained. And with regard to this area, of course, the Alliance and the corporation has started. However, actually, we are going to have the business, and starting the business was delayed by more than half a month, 15 days. We wanted to have that ready before the peak season of March. However, it was not offered in the March peak season. It was delayed. But it has already started. But starting from the beginning of this year, it has contributed and we are going to have the positive benefit. However, because it was not ready before the March, it had a negative impact from the forecast. So those are the 2 major reasons.

Based on that, I'd like to have a second question. Once again, with your new plan for new fiscal year, somewhat -- environment is difficult and that is reflected in your plan. If -- I don't want to think about the if situations. But if the top line revenue and transaction linked and transaction non-linked, I think it was sort of the plan in the previous fiscal year. But if because of some other events, if the revenue is not reaching your plan this year again, what is going to be done for the cost control? How much buffer and cushion do you have in controlling the cost? In the previous year, the top line went down and the revenue was short of the plan. And the cost was not reduced in proportion to the reduction of the top line revenue. And the balance of the reduction of the revenue and the cost control was not in proportional, but you are going to have JPY 1 billion or JPY 5 billion or JPY 1 billion or [ JPY 0.5 billion ] for the system, IT system investments. But this is news to me. Every time, every quarter, I think you have a new event. This is really troubling me. Maybe my intention is that for the revenue increase or decrease, the cost cannot be -- can be managed, right, in proportion to the revenue changes. In the past 1 year, I think the cost of control is not done in proportion to the changes of the revenues. So what is your ideas in doing the cost control?

For this fiscal year, for example, if you look at the cost changes, point expenses. In the first half, it was more than we originally expected in expenses. In the first half, in the prepaid charging points, we never expected that it is going to be such a big expansion of the prepaid point charge. But during the 3 months, point program review was done as countermeasures and therefore, it has leveled off in the second half. And after that, I think it is now more linked to the transaction volume. Now basically, whatever we control, we had a good control. However, there was unexpected situations and events, and we are trying to have quick countermeasures, undertake actions. Now with regards to Kanamori-san's questions, I can say as follows. In the case of FinTech, 70% is a variable cost. So the cost control-wise, the variable cost has to be changed structurally to control the cost, and there's a difficulty in that. But as point expenses, I think the variable cost -- variable portion is going to be reduced on a continuous basis. So the SG&A control, as in the past, is going to be done with a good control according to our understanding.

Going forward, I would like to ask you. As a result, I mean, you were short of the plan but you're also saying that the long-term view is given, but the accumulation of short-term view is going to be the long term. And if you continue to be short of plan on a short-term basis, I think the credibility of the medium-term management plans will be in question. So that's what I would like to say.

Next question, please, from Tsuda-san from Daiwa Securities, please.

Well, I've just participated from the middle. So maybe I have missed to hear the first part. But my first question, on your expenses last fiscal year, in the third quarter last year, the SG&A is about JPY 63 billion and now JPY 1.1 billion improvement. The 8.4% increase are because of the JPY 1.1 billion increase of that. So I'm sure there's been some natural decline in terms of human resource expense. But in FinTech, how the FinTech transaction volume because the larger population is large so that would become less. But you have increased 7.6% and 8.4% this time, the increase of the SG&A. So is it because of the other factors impacting on that increase? So in the third quarter, the JPY 1.1 billion increase of the -- what is the reason for such increase? That is my question in the third quarter. And also in the second question, in the repayment of the interest rate in the -- and there will be some of the [ lower ] participation for those provision balance, was the JPY 8.4 billion that's been declined by about -- some decline, JPY 4 billion decline of that in the middle. Does it going to damage your operating income or not in the -- during the period? In the third quarter and the fourth quarter, it has declined. Is it okay that you don't have to increase the provision amount in here, not increasing. But if the payment speed of the return of the payment interest rate, if it's a decline, the pace of that repayment, then is it going to be impacted by that? Well, I'd like to ask you a question. What you're saying, SG&A? Are you talking about the consolidated basis SG&A expense? In a consolidated basis rather than -- we are looking at this in segment by segment. So in terms of expense increase in the corporate eliminations, in the digital human resource recruitment, we are -- we seem to have found a good person, then we definitely have to hire that person. And that is why our cost of the HR resource has increased, but just about JPY 1.1 billion per segment, you have done the explanation per segment and also budget for that. But even if you achieve in your segment, but if you have the corporate eliminations, in corporate-wide, otherwise, you're not really increasing the income, IT and services, accounting -- of course, the accounting income of the consolidated income was not too bad. But what is happening on a consolidated basis is that you have been maybe impacted. So in consolidation of the other businesses, that to be -- so that you can thoroughly cover all the consolidation. So how do you analyze? My purpose of the question is on the consolidation basis.